April Same-Store Sales A Mixed Bag In The Early Going

Retailers are delivering mixed sales for April, with Limited Brands Inc. (LTD) once again a standout while Costco Wholesale Corp. (COST) fell short of expectations for a second straight month.

The month was expected to show some slowdown after an early Easter set up a powerful showing in March, but April was also hit by colder weather in the last half of the month and gasoline prices that ratcheted higher. Retailers were also up against some big numbers from a year ago because Easter fell much later in April, supplying solid demand virtually throughout the month.

Given last year's later Easter, "it's tough to compare the numbers we're getting today," said Madison Riley managing director at Kurt Salmon. "My sense is we're generally seeing solid gains because the consumer is feeling better, and that could be a good indicator for the summer."

Costco's U.S. same-store sales excluding fuel rose 4%, when analysts were expecting 4.9%. In March, the mass merchant, which has been lowering prices to combat competition, reported a 5% gain in the U.S. excluding gas, when 5.7% was expected. "While a slowing contribution from (customer) traffic growth has been more than offset by average transaction increases over the past year or so, that appears to have reversed this quarter," said Robert Carroll, retail analyst at UBS.

Limited Brands, operator of Victoria's Secret and Bath & Body Works, narrowed first-quarter guidance to the high end of its projection after issuing April same-store sales that beat expectations, coming in with a 6% gain, when a 4% rise was predicted.

Stage Stores Inc. (SSI) posted a 1% drop in same-store sales when analyst were looking for a 4.8% decline. The department store chain said it saw comparable-store sales increases in its cosmetics, home and gifts, junior's, misses sportswear and petites categories during the month. Geographically, the Mid Atlantic, Midwest, Northeast, South Central and Southwest regions all had comparable store sales gains.

"We expected April to be challenging given the negative impact of the Easter calendar shift and the timing shift of our Mother's Day event to May this year from April last year," Chief Executive Michael Glazer said. "However, April results were better than anticipated and, as a result, we exceeded our comparable store sales expectations for the quarter."

Among teen retailers, Zumiez Inc. (ZUMZ) reported a 10.1% rise in same-store sales when 6.8% was expected. The gain came on top of 17.5% growth in April a year ago.

Wet Seal Inc. (WTSLA) posted a 9.6% drop in comparable-store sales when a 9% decline was expected. And Buckle Inc. (BKE) same-store sales gained 1%, when a 0.9 rise was projected.

April same-store sales are expected to rise 3% for the 18 retailers that report figures, according to analysts polled by Thomson Reuters. The 3% compares with 11.1% a year ago when Easter fell on April 24 and is on the bottom of the range that retailers have been reporting so far this year. For March and April combined, to show the shift of the Easter holiday to early April this year, retailers are expected to report a 5.4% gain. The growth is down from a 6.4% rise over the same two months last year.

-By Karen Talley, Dow Jones Newswires; 212-416-2196; [e-mail]