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Retailers are recovering nicely from April's post-Easter slump, delivering solid same-store sales for May, with Limited Brands Inc. (LTD), Macy's Inc. (M) and Zumiez Inc. (ZUMZ) standing out.
Mother's Day falling in the middle of the month instead of its start like last year helped May sales, as did a sequential decline in gasoline prices month-over-month. Retailers are also showing resiliency, since many are up against significant comparable-store sales gains from last year.
"The reports show the economic and retail recovery is still ongoing," said Nancy Liu, retail strategist at Kurt Salmon. "But there are still uncertainties so the recovery will likely remain a slow one."
Limited Brands Inc. (LTD) posted a 6% rise in same-store sales, when 4.7% was projected. The owner of Victoria's Secret and Bath & Body Works has marked a string of analyst-topping comps.
Macy's Inc. (M) reported that same-store sales rose 4.2% in May, topping analysts' expectations for a 4% gain. "The momentum in our business continued in May, and came on top of a very strong month last year," Chief Executive Terry Lundgren said, noting that growth came from stores, online, and all geographic areas and categories.
Zumiez Inc. (ZUMZ) knocked it out of the park, posting a 13.7% jump in May same-store sales when analysts expected a 6.6% rise. The seller of skateboarding, surfing and snowboarding related apparel for young people said an increase in spending per transaction played a key role in the rise as customers paid higher prices.
The 18 retailers tracked by Thomson Reuters are expected to post a 3.6% rise in same-store sales, according to analysts it polled. The figure compares with 5.8% last year and a 2.2% gain in April. Retailers closed their books for May on Saturday, with subsequent sales for the month to be folded into their June same-store sales. Costco Wholesale Corp. (COST) reported same-store U.S. sales excluding gasoline rose 5%, beating expectations for 4.4%.
Stage Stores Inc. (SSI), which operates chains in generally smaller locales in the U.S. saw its same-store sales jump 8%, nearly quadruple what was expected, after no growth a year earlier. The gain was the best for the month at Stage Stores in a decade.
Some misses included Wet Seal Inc. (WTSLA), which marked an 8.8% decline in comparable-store sales when an 8.3% drop was expected. Softness in knit tops and screened tee shirts overshadowed growth in several other categories, said Chief Executive Susan McGalla.
"Through the remainder of the quarter, we will continue to shift our assortment toward strong performing categories, including woven tops, jeans, dresses and shoes, to better position Wet Seal for the back-to-school season," McGalla said.
Fellow teen retailer Buckle Inc. (BKE), a heavy seller of jeans, said comparable-store sales rose 0.2%. Analysts were expecting a 3.3% gain, making this the third month in a row the company has missed analysts' projections.
-By Karen Talley, Dow Jones Newswires; 212-416-2196; firstname.lastname@example.org