Inside This Issue - News
Retailers post strong same-store sales in March
April 16th, 2012
NEW YORK – Warm weather and an early Easter helped boost U.S. retail sales in March. Same-store sales for the month rose 4.1% at the 22 retailers tracked by the International Council of Shopping Centers.
"Similar to prior months, retailers selling to the high-end consumer performed strongest," notes William Blair & Co. analyst Mark Miller. "Target’s comparable-store sales exceeded expectations by the widest margin, owing to a continued positive comp in hard lines and acceleration in the apparel and food comps."
Target Corp. reported a 7.3% comparable-store sales increase for the five weeks ended April 2. Total sales rose 7.9% to about $6.43 billion.
"March sales were well above our expectations, reflecting a healthy underlying trend combined with the benefit of an earlier Easter and favorable weather this year," said chairman, president and chief executive officer Gregg Steinhafel. "We’re now planning for a revised first quarter comparable-store increase of 5% to 6%, reflecting a low- to mid-single-digit increase in our April comparable-store sales."
Costco Wholesale Corp. also reported a healthy same-store sales gain in March, although the increase fell short of analysts’ expectations. Costco reported net sales of $9.13 billion for the month, up 10% from the prior-year period. Sales at clubs open at least a year rose 6% in March, below the 6.7% that was predicted by analysts.
Excluding the effects of higher gasoline prices and the impact of foreign currencies, the same-store sales figure was up 5% in the U.S. and 9% overseas, for a companywide increase of 6%.
Fred’s Inc. reported that its total sales for March increased 3% to $194 million, while comparable-store sales were flat (versus an increase of 0.7% in the corresponding period last year).
"March was a solid month, meeting the sales and financial forecast that we expressed in our recent year-end conference call," said Fred’s CEO Bruce Efird. "As one would expect with warming weather, customers focused on seasonal product areas, and our Core 5 departments of pet, household supplies and pharmacy continued to do well. As we also recently noted, sales in our newer stores and pharmacies continued to perform ahead of our expectations in March.
"Our real estate team remains confident in its ability to hit our accelerated pace for new store openings this year."
Duckwall-ALCO Stores Inc. announced that its sales from continuing operations increased 4% to $45 million for the five-week period. Same-store sales, excluding fuel, increased 2.3%.
"March sales benefited from warmer temperatures that drove an early spring season and contributed to store increases in areas that included outdoor living, sporting goods and horticulture," said president and chief executive officer Rich Wilson. "We also continue to see increases in the household commodities and home divisions, driven primarily by increases in food, beauty care, furniture, plastic storage and seasonal appliances."
Rite Aid Corp. is another retailer that posted increases for the month. Same-store sales at the drug chain were up 3.6% compared to the prior-year period. Pharmacy same-store sales were up 3.2%, while prescription counts at comparable stores were up 2.6%.
Walgreen Co., meanwhile, saw its performance hindered by the fact that it is no longer part of the Express Scripts Inc. pharmacy network. March pharmacy sales were down 8.4% compared with the prior-year period, while comparable-store pharmacy sales decreased 11.1%.
The chain’s total sales in March decreased 4.3% to $6.02 billion. Total front-end sales were up 2.5% compared to March 2011, while comparable front-end sales were up 1.2%. Customer traffic in comparable stores decreased 1%, while the basket size increased 2.2%.
"We continued to see growth in our front-end business, and with Easter falling on April 8 this year we anticipate that much of our Easter sales will be reflected in our April results," said Walgreens executive vice president and chief financial officer Wade Miquelon. "In addition, our new advertising circular strategy has helped drive profitable sales."
Other indicators also point to a stronger environment for retailers. The National Retail Federation notes that import cargo volume at the nation’s major retailer container ports is expected to increase 3.2%, with year over year gains continuing through the end of summer.
"Retailers are continuing to watch rising gas prices, but job gains and other indicators show the economy is strengthening," NRF vice president for supply chain and customs policy Jonathan Gold said. "All this should improve customer confidence and lead to increased spending."