US retailers benefit from warmer April as sales bounce back
Later Easter pushed sales from March, and harsh winter that had kept many shoppers at home ends
Spring was in full swing for some US retailers, with shoppers spending again in April after the weather warmed up.
A number of large US retailers, including Costco Wholesale and Victoria’s Secret parent L Brands, reported April comparable sales above expectations, helped in part by a later Easter that pushed sales from March, and the end of a harsh winter that had kept many shoppers at home.
A group of nine retailers - which does not include giants like Wal-Mart Stores Inc, Target Corp and Best Buy Co - reported a 5.6 per cent increase in April comparable sales, better than the 4.1 per cent rise analysts expected, according to Thomson Reuters’ same-store sales index.
“The April performance was strong and suggested that pent-up demand helped,” said Michael Niemira, chief economist at the International Council of Shopping Centers.
Clothing stores Gapand American Apparel will report sales results after US markets close.
There were hopeful signs for retailers after months of heavy discounting that slammed sales and profit margins in winter.
L Brands, whose shares rose 4.5 per cent, raised its profit forecast and said it had been able to scale back promotions. Its comparable sales rose 8 per cent.
Costco reported a 5 per cent increase, better than the 3.2 per cent analysts projected, and its shares rose 2 per cent.
The S&P Retail Index rose 0.7 per cent.
Despite the strong showing, some analysts said there was still reason for caution.
“You can’t put too much credence into these numbers when you have a big bounce from delayed purchases,” said Craig Johnson, president of consulting firm Customer Growth Partners.
Mr Johnson warned against reading too much into the improving unemployment numbers, given the slow growth in low-wage jobs and the rise in the number of people dropping out of the workforce.
Several other retailers reported large jumps in April results, reflecting shoppers’ continuing appetite for bargains.
Discount apparel retail Stein Mart Inc said comparable sales rose 8.9 per cent, while rival Cato reported an 18 per cent jump and raised its profit forecast.
Youth retailers The Buckle and Zumiez also reported better than expected April sales.
All four stocks were higher in morning trading. (Reuters)