DOW JONES NEWSWIRES
Wal-Mart Stores Inc. (WMT) reported March same-store sales below
analysts' expectations, and numerous other retailers missed
downbeat estimates as consumer spending continues to drop.
Following a strong February and a March that was impacted by
Easter moving back to April this year, Wal-Mart expects earnings
and same-store sales for its fiscal first quarter coming in at the
high end of its forecast.
Easter selling is expected to be muted this year because of the
economic downturn, and analysts expect the later Easter to be
negative for March comparisons since people weren't doing their
Easter shopping in March. However, they said some retailers could
benefit from the extra shopping day in March. Last Easter, which
fell March 23, was the earliest in 95 years.
The world's largest retailer posted a 1.4% increase in U.S.
same-store sales last month, excluding gasoline sales, with the
namesake chain posting a 0.6% increase and Sam's Club seeing 6.2%
growth. March's results were driven by the health and wellness,
home and grocery segments.
Wal-Mart Vice Chairman Eduardo Castro-Wright said the company
expects Easter to drive April sales performance.
Shares were down 4.2% at $50.40 in recent premarket trading. The
stock was up 11% in the last month as of Wednesday's close.
The growth at Sam's Club was also seen at rival Costco Wholesale
Corp. (COST), which reported a 4% same-store-sales increase
excluding gasoline and currency fluctuations.
Discounter Target Corp. (TGT) also beat expectations but still
saw same-store sales drop 6.3% as customers continue to be
cautious, the company said.
Meanwhile, TJX Corp. (TJX) posted a surprise 2% gain and J.C.
Penney & Co. (JCP) beat views with a 7.2% decrease; both
companies updated their fiscal first-quarter outlooks. TJX now
expects earnings to be at or slightly above the high end of its
February forecast, while J.C. Penney anticipates a sharply narrower
loss than it had. Shares of TJX gained 3.1% to $27.52, while shares
of J.C. Penney rose some 5% to $23.80 in premarket action.
Ross Stores Inc. (ROST) also raised its quarterly earnings view
as it posted a surprise 3% same-store sales gain and said April
should see 3% to 5% growth.
Same-store sales were pegged to fall industrywide again in
March, despite last year's weak results, after a brief respite in
February as Wal-Mart's results drove the industry average
break-even. Excluding Wal-Mart, the projected slight declines for
last month could reach 5%.
The troubles reflect the weakened state of consumer confidence,
which edged up slightly in March after hitting an all-time low in
February. Lynn Franco, who runs the Conference Board's Consumer
Research Center, said consumers don't foresee a turnaround in
economic conditions over the next six months.
Among other retailers, Children's Place Retail Stores Inc.
(PLCE) posted a surprise 2% drop in March same-store sales. Others
who missed analysts' views included teen retailers Zumiez Inc.
(ZUMZ), which posted a larger-than-expected 18% drop, and Wet Seal
Inc. (WTSLA), which reported an 11% fall.
Another teen retailer, Abercrombie & Fitch Co. (ANF), missed
estimates by 10 percentage points, posting a 34% tumble; these were
the lowest estimates projected for any company. The company has
been steadfast about refusing to cut prices, saying such a move
would devalue its brand.
High-flyer Buckle Inc. (BKE) again soared above its peers,
reporting a 15% jump, beating analysts' expectations of a 13% gain.
The company has posted double-digit growth in same-store sales for
20 straight months.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com