DOW JONES NEWSWIRES
Wal-Mart Stores Inc. (WMT) posted February same-store sales more
than double analysts' expectations, as a host of other retailers
exceeded 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 3% at $49.95 in recent premarket
trading.
Same-store sales were pegged to fall for a fifth-straight month.
But because of Wal-Mart's outperformance, the industry's average
may end up slightly in positive territory. Projections going in
pegged sales excluding Wal-Mart dropping about 5%.
But retail is far from out of the woods as its ongoing trouble
reflects the continuing slide in consumer confidence, which has set
a new record low each of the past three months, and the steep drops
in spending. Even deep discounts that had attracted shoppers
earlier this year were having limited impact before February.
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.
Troubles remained for Target Corp. (TGT), which had been
consistently underperforming, but the company beat analysts'
projections slightly with its 4.1% decline in same-store sales.
Department-store chains have been weak performers for some time,
and the trend continued in February. Macy's Inc. (M) and Saks Inc.
(SKS) posted weaker-than-expected results with drops of 8.5% and
26%, respectively.
Among other apparel 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.'s (GPS) own 12% decline, though, was smaller than
expectations.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com