Warm weather, Easter shopping and a growing sense of consumer confidence helped the nation's retailers ring up strong sales in March, easily surpassing analysts' estimates.
It was a warm March for retailers, too
Many retailers posted double-digit sales gains, including Target, up 10.3 percent. But the long-term outlook remains murky.
April 9, 2010 at 2:31AM
The nation's biggest chain stores posted a 9 percent jump in same-store sales compared with a year ago, the strongest gain since March 1999, according to the International Council of Shopping Centers.
Several retailers, including Minneapolis-based Target Corp., raised their earnings forecasts.
Caution remained a watchword amid the glowing numbers, however, as comparisons to last year's widespread losses were relatively easy and still-high unemployment continues to put a chill on consumer spending.
"The key to the long term is: How do you get these 15 million people employed again?" said David Brennan, co-director Institute for Retailing Excellence at the University of St. Thomas. Depressed wages and shorter work weeks remain a drag, he noted.
Target joined at least 15 national retailers posting double-digit gains in same-store sales, a key financial measure of sales among stores open a year or more. Sales at Target increased 10.3 percent, driven by what CEO Gregg Steinhafel described in a statement as "particular strength" in apparel sales.
A thaw in discretionary spending, including clothes, is a hopeful sign. Target predicted its combined sales in March and April will increase 3 to 5 percent. The retailer said it expects first-quarter earnings now to rise 10 cents or more above its previous 74 cent estimate.
Target said sales of shoes and women's apparel were especially strong, and that staples such as food, health care and beauty items continue to outsell housewares and home decor.
"Target is in much better position," Brennan said. "That's partly because of things Target did internally, but also the marketplace. The price-sensitive customers are now coming back, and we'll see more and more of that going forward."
Department stores, which suffered deep losses during the recession, showed strong gains. Macy's was up 10.8 percent, with incrases at both Macy's and Bloomingdales. Online sales shot up more than 40 percent.
Kohl's Corp., based in Menomonee Falls, Wis., posted one of the month's biggest gains, soaring 22.5 percent from higher store traffic. Teen retailer Aeropostale posted a record sales increase of 19 percent.
At Macy's same-store sales rose 10.8 percent, ahead of the nearly 8 percent gain analysts were expecting. The Cincinnati-based department-store chain said online sales jumped 40 percent as consumers clamored for spring fashion.
Luxury operators as a group gained nearly 23 percent in the month, according to MasterCard Spending Pulse, which tracks retail spending of all types, including cash. E-commerce was up more than 18 percent.
Michael McNamara, vice president of research and analysis for SpendingPulse said in a statement that with inventory in check, retailers didn't have to resort to discounting to drive traffic during the Easter shopping season.
Ken Perkins, an analyst with Retail Metrics Inc., noted this was the seventh straight month of increases in his data, which tracks 29 chain stores.
"The Easter bunny," he wrote in a report, "delivered overflowing baskets to retailers."
Jackie Crosby • 612-673-7335
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