March sales stronger than expected
New York City — Shoppers surprised analysts in March by spending stronger than expected during the month, despite rising gas prices, cooler-than-normal temperatures and a late Easter. The Thomson Reuters Same-Store Sales Index rose 1.7% in March, beating estimates, which called for a decrease of 0.7%.
Same-store sales figures released Thursday by many of the nation’s retailers showed solid spending growth, with only a few exceptions. From Costco Wholesale Corp. to Limited Brands’ boost by a powerful Victoria’s Secret showing in March, a broad range of retailers posted better-than-expected revenue gains.
In the specialty apparel sector, Zumiez shone with a 15.1% overall sales gain to $41.2 million and a same-store sales increase of 8.9%, which more than doubled Wall Street’s expectations of a 4.1% rise. Limited Brands was also a big winner in March, recording a same-store sales rise of 13% overall, boosted by its Victoria’s Secret banner which posted a 19% same-store sales gain.
Gap didn’t fare as well, as same-store sales decreased 10%.
Other specialty apparel results included:
- Buckle posted an 8.4% increase in same-store sales.
- Hot Topic same-store sales decreased 5%, but beat expectations of a 6.2% decrease;
- Wet Seal same-store sales rose 4.7%;
- Bebe Stores edged down 0.7%; and
- Cato same-store sales dropped 9%.
Easter shift impacts warehouse clubs slightly
ISSAQUAH, Wash. and WESTBOROUGH, Mass.— The shifting of Easter to April this year impacted the warehouse club sector last month, as both Costco and BJ’s reported March comps that were negatively impacted by the calendar change. Without the benefit of Easter sales, both companies still managed to turn out respectable comps.
Costco reported net sales of $8.33 billion for the month of March, an increase of 17% from $7.15 billion during the similar period last year. According to the company, its March total and comparable sales performance benefitted by approximately 1% to 2% because of one additional sales day this year, partially offset by several days of pre-Easter sales strength a year ago. Costco added that this year’s five-week period included sales from the company’s Mexico joint venture, as the company began consolidating its Mexico operations on a prospective basis beginning with its 2011 fiscal year; without those sales the net sales increase would have been 14%.
Costco’s U.S. same-store sales for March increased 11%. Considering the impact of gasoline, U.S. comps were up 7%.
Over at BJ’s, the shift of Easter to the April reporting period this year impacted the company’s merchandise comparable-club sales by approximately 2%. The company reported that sales for March 2011 increased by 9.1% to $1.08 billion from $992.7 million in March 2010.
The company reported same-store sales for the month increased by 5.3%. Excluding fuel, same-store sales increased by approximately 1.3%. By comparison, BJ’s March 2010 merchandise same-store sales rose 7.3%, reflecting the positive impact of Easter sales.
According to BJ’s, March sales were strongest in such food categories as breakfast needs, coffee, cookies & crackers and prepared foods. While general merchandise sales were weaker in such areas as apparel, pre-recorded video, sporting goods, televisions and toys.
Costco operates 580 warehouses, including 424 in the United States and Puerto Rico, 80 in Canada, 22 in the United Kingdom, seven in Korea, six in Taiwan, eight in Japan, one in Australia and 32 in Mexico. It plans to open up to 14 additional new warehouses (including the relocation of a warehouse to a larger and better-located facility and the reopening of San Marcos, Calif. — previously closed for an onsite relocation) prior to the end of its 2011 fiscal year on Aug. 28. The Tamasakai, Japan warehouse, closed for repair of earthquake damage, is expected to reopen before the end of calendar year 2011.
BJ’s Wholesale Club operates 190 warehouse clubs in 15 states.
Home is where the profits are
Fourth-quarter sales at Bed Bath & Beyond grew 11.6% to $2.5 billion while profits grew 25% to $283 million for the period ended Feb. 26. On a per share basis, profits increased 30% to $1.12 in the fourth quarter, far surpassing the 97 cents consensus estimate of analysts. Equally impressive was the company’s 8.5% same-store sales increase as it occurred on top of a prior-year fourth-quarter comp increase of 11.5%.
The fourth-quarter showing propelled Bed Bath & Beyond to full-year sales of nearly $8.76 billion, an 11.9% increase from the prior year and profits of $791 million, an increase of nearly 32%. Full -year earnings per share increased 33% to $3.07 and full -year same-store sales grew 7.8% on top of a prior year increase of 4.4%.
At year end, the company operated a total of 1,139 stores, consisting of 982 Bed Bath & Beyond stores, 66 Christmas Tree Shops stores, 45 buybuy BABY stores and 46 stores under the names of Harmon or Harmon Face Values. In addition, the company is a partner in a joint venture which operates two Home & More stores in Mexico City.
This year, an additional 45 new stores are planned, and during a conference call company co-chairman Warren Eisenberg reaffirmed the belief that the United States and Canada can ultimately support in excess of 1,300 Bed Bath & Beyond stores and regional concepts, such as Christmas Tree Shops and buybuy BABY, have nationwide potential. In addition, the company expects to open more Harmon Face Value stores and selectively place health and beauty care offerings in all of its concepts.
New-store growth coupled with first-quarter and full-year same-store-sales growth expectations in the range of 2-4% have the company projecting that first-quarter earnings will be approximately 58 cents to 61 cents and for the full year earnings will increase by 10% to 15%.
“While a number of economic challenges persists, including higher commodity prices, relatively high unemployment, a sluggish housing market and fragile consumer confidence, our fundamental business strategy remains unchanged: to offer a broad assortment of merchandise at everyday low prices with superior customer service,” said Steve Temares, CEO of Bed Bath & Beyond.