U.S retailers’ same-store sales topped analysts’ estimates this month as warm weather and lower gasoline prices boosted consumer spending.
Sales at Target Corp. (TGT), the second-largest U.S. discount retailer, climbed 4.4 percent, beating the average projection for a 3.3 percent gain from analysts surveyed by researcher Retail Metrics Inc. TJX Cos. (TJX), the owner of the T.J. Maxx and Marshalls retail chains, posted an 8 percent increase in same- store sales, topping the 5.1 percent estimate.
Shoppers hit the mall in large numbers this past weekend as retailers offered Memorial Day promotions and warm weather in the Northeast drove purchases of summer apparel. Same-store sales for the more than 20 retailers tracked by Swampscott, Massachusetts-based Retail Metrics rose 4 percent in May, beating estimates of a 1.8 percent increase.
“It shows a real resiliency of the consumer, and generally speaking, it’s a positive sign for the state of the retail economy,” Joel Bines, a Dallas-based managing director in the retail practice at AlixPartners, said in a telephone interview.
Confidence among U.S. consumers climbed in May to the highest level since October 2007, according to a Thomson Reuters/University of Michigan index, as gasoline prices retreated 7.6 percent from an 11-month high in April.
“Traffic trends have picked up as hot summer weather spread over the majority of the nation,” Adrienne Tennant, an analyst at Janney Montgomery Scott LLC in Washington, wrote in a note before today’s report.
Warmest Since 2007
The month of May in the U.S. this year was the warmest since 2007, with the hottest Memorial Day in more than 50 years, according to Planalytics, a weather data provider.
Bon-Ton Stores Inc. (BONT), the department-store operator that hired the former head of Lord & Taylor LLC as chief executive officer in January, rose after reporting same-store sales advanced 1.5 percent, compared with the average estimate for a 2 percent decline. The shares increased 13 percent to $5.26.
Ross Stores Inc. (ROST) posted an 8 percent increase in same-store sales, topping the 5.2 percent average of estimates.
Limited Brands Inc. (LTD), the Columbus, Ohio-based operator of the Victoria’s Secret lingerie chain, said sales advanced 6 percent, beating estimates for a 5.4 percent gain.
Department-store chain Kohl’s Corp. (KSS) tumbled 6.2 percent to $45.82 after reporting same-store sales that fell 4.2 percent, worse than the estimate for a 1.1 percent decline. The Menomonee Falls, Wisconsin-based company said second-quarter sales will be “modestly negative” as a result.
Gap Inc. (GPS) fell 0.6 percent to $26.50 after reporting a 2 percent gain in same-store sales that missed the estimate of a 3.3 percent increase.
Most chains count locations open at least a year to tabulate same-store sales. The revenue is a key indicator of a retailer’s growth because new and closed sites are excluded.
To contact the reporter on this story: Sapna Maheshwari in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Robin Ajello at email@example.com