DOW JONES NEWSWIRES
Wal-Mart Stores Inc. (WMT) posted February same-store sales more
than double analysts' expectations, as a host of other retailers
have been exceeding downbeat estimates amid the continued slide in
consumer spending.
The company regained its footing after sales growth slowed
somewhat the prior two months. Wal-Mart has been benefitting from
the slumping sales seen by other retailers as consumers trade down
and do more bargain shopping.
The world's largest retailer reported a 5.1% increase in U.S.
same-store sales last month, excluding gasoline sales, with the
namesake chain posting a 5% increase and Sam's Club seeing 5.9%
growth. The company said last month it would no longer provide
monthly sales forecasts.
February's results were driven by the grocery, entertainment and
health-and-wellness segments.
"We believe falling gas prices significantly boosted household
disposable income in February and therefore allowed for both more
trips and more spending towards discretionary categories," said
Vice-Chairman Eduardo Castro-Wright said.
Wal-Mart's shares were up 2.4% at $49.65 in recent premarket
trading.
Separate indexes from Thomson Reuters and Retail Metrics are
expected to fall for the fifth-straight month in February.
Excluding Wal-Mart, the projected declines of about 1% would be
nearly 5%. Thomson Reuters noted this week retailers face a tough
year-over-year comparison for the month, as last year's sales were
relatively strong.
The troubles reflect the continuing slide in consumer
confidence, which has set a new record low each of the past three
months, and the steep drops in consumer spending. Even deep
discounts that had attracted shoppers earlier this year seem to
have lost their effectiveness.
Retailers have been saying recently that they are making headway
in reducing their inventories. But there are likely to still be
margin questions because indications are that in many cases deep
discounting continued in February.
Among other retailers, Children's Place Retail Stores Inc.
(PLCE) beat analysts' views, saying same-store were flat from a
year earlier, boosted by Canadian results.
High-flier Buckle Inc. (BKE) again remained far above its peers,
reporting a 21% jump, widely beating analysts' expectations for a
9% gain. The company has posted double-digit growth in same-store
sales for 19 straight months.
Other teen retailers also posted results well above analysts'
expectations. Hot Topic Inc. (HOTT) late Wednesday beat analysts'
views by a wide margin, posting an 11% increase in same-store
sales. Even Wet Seal Inc. (WTSLA) and American Eagle Outfitters
Inc. (AEO), which posted drops of 6.6% and 7%, respectively,
handily beat estimates.
Apparel retailer Stein Mart Inc. (SMRT) missed analysts' views,
however, posting a 12% drop in same-store sales. The company said
the worst-performing businesses were ladies' career sportswear and
gifts. Gap Inc. (GPS) also fell short with its 12% decline.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com