The jump in sales at stores open at least a year handily beat the 3.9 percent gain that was the average of analysts’ estimates, researcher Retail Metrics Inc. said Thursday. Combined March and April sales rose 4.8 percent from a year earlier.
The firm said retailers may not entirely be in the clear yet. Positive sales results would need to follow in May to confirm the trend, and discounts of as much as 50 percent may hurt retailers’ first-quarter earnings.
“We need to carry through with solid Mother’s Day and Memorial Day weekend sales leading to a solid May result before we would feel more comfortable the consumer is back,” Ken Perkins, president of the Swampscott, Massachusetts-based firm, said in a statement Thursday.
Cato Corp., a women’s apparel retailer based in Charlotte, North Carolina, posted the biggest increase with 18 percent. The company raised its profit forecast for the first quarter to as much as $1.05 share, up from a previous projection of a maximum of 95 cents. Shares of Cato rose 4.2 percent to $28.87 at 11:03 a.m. in New York.
L Brands Inc., owner of Victoria Secret, and teen apparel chain Zumiez Inc. reported 8 percent and 8.2 percent sales increases, respectively. Costco Wholesale Corp. saw sales advance 5 percent.
L Brands rose 4.9 percent to $56.01 while Zumiez added 13 percent to $28.
The aggregate monthly number excludes Gap Inc., which reports its sales after the market closes Thursday. It also is based on about a dozen chains that still report monthly sales figures.
The bulk of the more than 100 publicly held retailers tracked by analysts report only quarterly comparable-store sales. Those will rise 1 percent in the first quarter, analysts’ estimated before Thursday.
Retailers remained aggressive, with numerous apparel chains offering 30 percent to 40 percent off the entire store and a handful discounting by 50 percent, Perkins wrote in a May 1 report. Chains are sitting on inventories unsold after the cold winter and prolonged weak store traffic.
Analysts have reduced their estimates to reflect that overhang. When the year started, analysts estimated retailers’ first-quarter earnings would grow more than 13 percent, Retail Metrics said. That average had dropped to 7.5 percent on March 1 and, before Thursday’s sales reports, stood at 2.1 percent, the researcher said this week in an e-mail.
Retailers will report earnings for the February-April quarter starting next week.
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