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Nation's retailers report disappointing sales in March

Updated:
NEW YORK (AP) _ Cooler temperatures and a later Easter gave consumers little incentive to shop last month and left retailers with tepid sales for the second month in a row.

As the nation's merchants began reporting their March results early Thursday, Wal-Mart Stores Inc., Limited Brands, Gap Inc., Abercrombie & Fitch Co. and Sharper Image Corp. were among the disappointments. A bright spot was wholesale club operator Costco Wholesale Corp., which reported sales results that beat Wall Street expectations.

``So far, it looks like consumers didn't shop in the month of March,'' said Jharonne Martis, an analyst at Thomson Financial. ``Basically, the results were mixed to disappointing.''

Martis noted that based on 35 merchants that had reported results so far, 37 percent beat estimates, while 63 percent missed expectations.

The tempered sales reports followed a disappointing February. January was a robust month as consumers, armed with holiday gift cards, shopped with gusto.

While temporary factors like Easter's late arrival and cool weather helped limit spending, analysts also said consumers are contending with higher interest rates, which makes financing debt more expensive, and higher gasoline prices. One positive factor has been solid gains in the job market, which helped consumer confidence rebound in March to a near four-year high.

Wal-Mart posted a slim 1.4 percent gain in same-store sales,in line with the 1.2 percent estimate from analysts surveyed by Thomson Financial. Same-store sales are sales at stores open at least a year and are considered the best indicator of a retailer's performance.

Wal-Mart blamed a late Easter, which falls on April 16 and is three weeks later than last year, for depressing results. The retailer said it expects same-store sales gains to improve to 4 percent to 6 percent in April.

Because of the calendar shift, retailers and analysts look at March and April results combined to assess sales trends.

Costco Wholesale Corp.'s same-store sales, or sales at stores opened at least a year, rose 7 percent. The results beat the 5.9 percent estimate from analysts surveyed by Thomson Financial.

Federated Department Stores, which acquired May Department Stores Co. last year, saw its same-store sales unchanged from a year ago. Analysts had expected a 0.3 percent decline. Same-store sales include only Macy's and Bloomingdale's locations. It also forecast a same-store sales decline of 2.5 percent to 3.5 percent in April, reflecting a late Mother's Day.

Limited Brands Inc. had a modest 2 percent gain in same-store sales, below Wall Street's 2.7 percent estimate.

Gap, which continues to struggle to find the right merchandising formula, suffered a 13 percent drop in same-store sales last month, worse than the 7.3 percent decline Wall Street expected.

``Our March performance reflects the challenges we face to increase the frequency of customer visits to our stores,'' said Sabrina Simmons, senior vice president, treasury and investor relations, in a statement.

Sharper Image posted a 29 percent drop in same-store sales, worse than the 20.2 percent decline analysts expected.

Furniture retailer Bombay struggled with a 1.7 percent decline in same-store sales, worse than the 1.3 percent gain analysts projected.

Teen retailers, which have been on a winning streak, also saw business slow last month.

Abercrombie & Fitch said same-stores sales were unchanged in March from a year ago. Analysts had expected a 3.6 percent increase.

On Wednesday, American Eagle Outfitters Inc. said same-store sales rose 3 percent, less than the 3.8 percent forecast.

Hot Topic Inc. also had disappointing results, posting a 12.7 percent decline in same-store sales. Analysts expected an 8.7 percent drop. As a result, the company reduced its earnings outlook for the first quarter.
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