NEW YORK – Cooler temperatures and a later Easter gave consumers little incentive to shop last month and left retailers with tepid sales for the second month in a row.
As the nation's merchants began reporting their monthly results early Thursday, Limited Brands, furniture retailer Bombay Co. (BBA) and Sharper Image Corp. (SHRP) were among the disappointments. A bright spot was wholesale club operator Costco Wholesale Corp. (COST), which reported sales results that beat Wall Street expectations.
"So far, it looks like consumers didn't shop in the month of March," said Jharonne Martis, an analyst at Thomson Financial. "Basically, the results were mixed to disappointing."
Martis noted that based on 32 merchants that had reported results so far, 34 percent beat estimates, while 66 percent missed expectations.
The tempered sales reports followed a disappointing February and a robust January as consumers, armed with gift cards, shopped with gusto.
While temporary factors like Easter's late arrival and cool weather helped to limit spending, analysts also said consumers are contending with higher interest rates, which makes financing debt more expensive, and higher gasoline prices. One positive factor has been solid gains in the job market, which helped consumer confidence rebound in March to a near four-year high.
Costco Wholesale Corp.'s same-store sales, or sales at stores opened at least a year, rose 7 percent. The results beat the 5.9 percent estimate from analysts surveyed by Thomson Financial.
Limited Brands Inc. had a modest 2 percent gain in same-store sales, below Wall Street's 2.7 percent estimate.
Federated Department Stores (FD), which acquired May Department Stores Co. last year, saw its same-store sales unchanged in March from a year ago. Analysts had expected a 0.3 percent decline. Same-store sales include only Macy's and Bloomingdale's locations. It also forecast a same-store sales decline of 2.5 percent to 3.5 percent in April, reflecting a late Mother's Day.
Sharper Image posted a 29 percent drop in same-store sales, worse than the 20.2 percent decline analysts expected.
Furniture retailer Bombay struggled with a 1.7 percent decline in same-store sales, worse than the 1.3 percent gain analysts projected.
On Wednesday, American Eagle Outfitters Inc. (AEOS) said same-store sales rose 3 percent, less than the 3.8 percent forecast.
Hot Topic Inc. (HOTT) also had disappointing results, posting a 12.7 percent decline in same-store sales. Analysts expected an 8.7 percent drop. As a result, the company reduced its earnings outlook for the first quarter.