Same-store sales at U.S. retailers in April surpassed analysts’ estimates, led by Limited Brands Inc. and Macy’s Inc. (M), as consumers gained confidence in the U.S. economy’s recovery.
Limited, operator of the Victoria’s Secret chain, boosted sales 20 percent, almost double the average gain of analysts’ estimates compiled by Retail Metrics Inc., which tracks more than two dozen U.S. chains. Sales at Macy’s, the second-largest U.S. department store chain, rose 10.8 percent, also surpassing projections.
Confidence among U.S. consumers rose more than estimated in April as six straight months of job gains buoyed the spending that makes up about 70 percent of the economy. Retailers also benefited from the Easter holiday falling on April 24, 20 days later than a year ago.
“The story here is that the consumer is somewhat resilient despite rising gas prices and ongoing concerns about the labor market,” said Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics.
Overall, same-store sales rose 8.7 percent, compared with projections of a 7.7 percent gain for the chains tracked by Retail Metrics. That marked a 20th straight increase from September 2009. Retailers as a group posted a gain of 2.2 percent in March, surpassing projections for a drop of 0.5 percent.
Limited, based in Columbus, Ohio, rose 10 cents, or 0.3 percent, to $40.42 at 4 p.m. in New York Stock Exchange composite trading. Macy’s, based in Cincinnati, advanced 95 cents, or 3.7 percent, to $26.35.
Most chains count locations open at least a year to tabulate same-store sales. This revenue is a key indicator of a retailer’s growth because new and closed sites are excluded.
Sales at Macy’s rose 5.3 percent combined for March and April, surpassing its forecast of as much as 4.5 percent. Victoria’s Secret led the gains at Limited, posting an increase of 25 percent.
Clothier Gap Inc. (GPS) also surpassed estimates with an increase of 8 percent after analysts expected sales to be little changed. Revenue at the San Francisco-based company’s Old Navy chain led the gains, advancing 14 percent.
Old Navy’s gains showed consumers facing rising gas prices and high unemployment are still driven by promotions and value, said Edward Yruma, a New York-based retail analyst for Keybanc Capital Markets.
“The consumer is still clearly under pressure,” Yruma said. “Look at Gap, their most productive division was their most promotional.”
Gasoline prices in the U.S. last month surged to the highest level since July 2008 on concern that refinery outages in Texas may reduce U.S. inventories of the fuel.
Many parts of the U.S. also faced adverse weather last month, which J.C. Penney Co. cited for curbing sales and foot traffic. The third-largest department store chain’s revenue were below estimates, along with rival Kohl’s Co. and luxury retailers Saks Inc. (SKS) and Nordstrom Inc.
Teen retailer Aeropostale Inc. (ARO), which stopped reporting monthly sales earlier this year, posted a decline in same-store sales of 7 percent for the first quarter because it used more discounts than expected. That compared with estimates for a drop of 3.3 percent. The company also revised its first-quarter profit forecast to about 20 cents per share from as much as 38 cents.
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