Retail sales show strength in April, led by Gap, L. Brands and Costco
New York — Many retailers reported better than expected sales in April, helped by warmer weather and a later-than-usual Easter. Gap Inc., L Brands, Costco Wholesale Club, The Buckle, Stein Mart and Zumiez all came in ahead of analysts estimates.
At Gap Inc., same-store rose a better-than-expected 9% in April. By banner, sales were up 3% at Gap stores, 7% at Banana Republic and 18% at Old Navy. Analysts had expected Gap’s total same-store sales to inch up 0.1%.
“We are pleased with our execution overall in April, especially at Old Navy,” said Glenn Murphy, chairman and CEO, Gap.
For the first quarter of fiscal year 2014, Gap’s net sales rose 1% to $3.77 billion.
L Brands raised its first-quarter earnings forecast on strong sales in April at its Victoria’s Secret and Bath & Body Works stores. For the four weeks ended May 4, L Brands’ same-store sales rose 8%. Total revenue increased 9% to $7.17.6 million in April.
Costco Wholesale Corp. reported a 5% increase in same-store sales, despite being closed on Easter Sunday, beating projections. Its international business was even stronger at a 7% increase. Net sales for the month totaled $8.56 billion.
In other same-store sales results for April:
Stein Mart Inc. posted a 8.9% increase in same-store sales, better than the 3% rise analysts expected.
Total sales for April came in at $108.1 million, compared with sales of $99.3 million in April 2013.
Zumiez Inc. had a same-store sales increase of 8.2%, surpassing estimates of a 1% increase. Total sales for the month were $50.6 million, up 17.6% over April of 2013.
The Buckle Inc. reported a 0.8% increase in same-store sales, compared to analysts’ projections of a 0.8% drop. Net sales rose 2.4% and totaled $75.6 million for the month.
Cato updates Q1 estimate following April sales surge
Although specialty retailer Cato had a rough March thanks to the shift of Easter from late March last year to mid-April this year, April was a whole other story.
The company reported sales of $93.5 million for the four weeks ended May 3, a 21% jump from sales of $77 million for the four weeks ended May 4, 2013. Same-store sales increased 18% for the month.
"April sales and the combined sales for March and April were above expectations," stated chairman, president and CEO John Cato. "We now expect first quarter earnings per diluted share will be in the range of $1.03 to $1.05 versus $1.05 last year and up from our previous guidance of $.89 to $.95.
The company will release first quarter results Tuesday, May 20.
During the month, the company opened four stores and closed two stores. New stores opened in Slidell, La., Easton, Md., Bay City, Mich., and Mitchell, S.D. As of May 3, the company operated 1,324 stores in 32 states, compared to 1,307 stores in 31 states as of May 4, 2013.
The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories operating three concepts: Cato, Versona and It’s Fashion.
Sprouts Farmers Market profits in first quarter
Sprouts Farmers Market’s president and CEO Doug Sanders credited the company’s focus on offering healthy food at affordable prices for 28 consecutive quarters of positive same-store sales growth as well as record first quarter results that outperformed its targets.
"During the first quarter, Sprouts’ net sales increased 26%, generating additional leverage and resulting in a 49% improvement of EBITDA growth. Given our strong business momentum and impressive first quarter results we are increasing our annual guidance, and feel confident in achieving our growth plans," said a confident Sanders.
The company’s net sales in the quarter increased 26% to $722.6 million, driven by a 12.8% increase in same store sales growth and strong performance in new stores opened, including its first new store in the Kansas City market.
Gross profit for the quarter increased 29% to $223.9 million, resulting in a gross profit margin of 31% of sales, or an increase of 70 basis points compared to the same period in 2013. The improvement in gross profit margin was primarily driven by leveraging occupancy, utilities and buying costs. The company also experienced higher merchandise margins in produce from strong product quality and availability, and lower merchandise costs from vendor discounts in certain departments. These increases were offset by promotional activities.
During the quarter, the company opened four new stores: two in California and one each in Kansas and Oklahoma. It also relocated its El Paso, Texas, store. One additional store in Nevada has been opened in the second quarter to date, bringing new store openings in 2014 to five for a total of 172 stores in nine states as of May 7. The company expects to open 23-24 stores for the year.
Looking ahead, the company is raising its per-share adjusted earnings estimate by five cents and now expects 63 cents to 65 cents. It also increased its projection for net sales growth by two percentage points and now expects an increase of between 18% and 20%. The company also raised its same-store-growth estimate by 1.5 percentage point to between 8.5% and 9.5%