Retailers report mixed sales results in February

NEW YORK (AP) _ Retail sales slowed last month as the reappearance of winter weather after a warm January chilled consumers' interest in spring apparel. <br/><br/>As the nation's retailers began

Thursday, March 2nd 2006, 8:39 am

By: News On 6

NEW YORK (AP) _ Retail sales slowed last month as the reappearance of winter weather after a warm January chilled consumers' interest in spring apparel.

As the nation's retailers began reporting their February results early Thursday, merchants with solid sales gains included Wal-Mart Stores Inc., Costco Wholesale Corp., Limited Brands Inc., Bombay Co. and Nordstrom Inc. Disappointments included Bebe Stores Inc., Gap Inc. and Talbots Inc.

``So far, the results look mixed,'' said analyst Jharonne Martis at Thomson Financial. ``It's not that consumers have stopped shopping; it is just that they're slowing down.''

The tempered sales reports followed surprisingly robust gains in January, when shoppers armed with holiday gift cards and inspired by mild weather shopped for clearance and spring merchandise. Analysts believe the January spree took away business from February.

Economic factors also held sales back last month. After consumer confidence rose to a three and a half year high in January, consumers' sentiment fell more than expected in February, hurt by concerns about the strength of the job market. Shoppers are also facing higher heating bills, a slowing housing market and rising interest rates.

Another worrisome issue is that consumers' personal savings rate remained in the negative territory in January. That means Americans continue to spend beyond their after-tax incomes, which forced them to dip into savings or increase their borrowing.

While February is one of the least important months of the year, it is critical for setting the mood for spring selling.

Wal-Mart reported a 3.2 percent increase in same-store sales, or sales at stores open at least a year. Same-store sales are considered the best indicator of a retailer's health.

The results from the world's largest retailer were in line with the 3.1 percent estimate from analysts surveyed by Thomson Financial.

Costco had a 7 percent increase in same-store sales, better than the 6.5 percent analysts' estimate.

Nordstrom reported a 4.9 percent same-store increase, surpassing the 3.5 percent estimate.

Penney had a 2.3 percent increase in same-store sales in its department store division, better than analysts' 1.2 percent projection.

Limited reported a 5 percent same-store sales gain, higher than the 3.8 percent forecast.

Gap, which has been struggling with coming up with the right merchandising mix, stumbled again, suffering an 11 percent drop in same-store sales, much worse than the 6.8 percent analysts expected.

Talbots said its same-store sales fell 6 percent, well below the 0.3 percent decline analysts expected. Arnold B Zetcher, chairman, president and CEO, said in a statement sales results were ``significantly impacted'' by the major snowstorm in the Northeast in mid-February.

Bebe had a 1.6 percent gain in same-store sales, below the 4.6 percent estimate.

Bombay reported a 4.2 percent increase in same-store sales, surpassing the 2.5 forecast.

On Wednesday, Hot Topic Inc. reported a 8.4 percent drop in same-store sales, worse than the 4.5 percent decline expected by Wall Street.