WRAPUP 2-U.S. chain store sales rise modestly as jobs, weather weigh

Thu Apr 11, 2013 10:13am EDT

* Analysts expect 1.8 pct rise in sales for index
    * TJX, Costco miss estimates; Ross Stores, L Brands beat


    By Phil Wahba
    April 11 (Reuters) - Several top U.S. retailers, including
Costco Wholesale Corp and T.J. Maxx parent TJX Cos Inc
, reported  weaker-than-expected March sales as cold
weather and lingering concerns about the job market chilled
shoppers' enthusiasm.
    The U.S. labor market recovery showed signs of losing
momentum in March as employers hired at the weakest pace in nine
months, raising concerns about the impact on consumer spending.
Many parts of the country also experienced the worst of winter
in February and March, later than normal, leading shoppers to
hold off on purchases of spring merchandise.
    "Anyone who thinks the consumer will come swinging out of
the gate is fooling themselves," said Alison Jatlow Levy, retail
strategist at consulting firm Kurt Salmon.
    Costco reported weak international results, but fared a bit
better in the United States, where strong sales of small
appliances, jewelry and fresh food offset the effect of lower
gasoline prices. Sales at stores open at least a year were up 4
percent, less than the 5.2 percent jump analysts
expected. 
    TJX reported a 2 percent decline in March same-store sales,
deeper than the 1 percent drop analysts were projecting. But the
company said business improved as the weather warmed up, and
Chief Executive Officer Carol Meyrowitz said April "was off to a
good start."
    
    POCKETS OF STRENGTH
    Analysts expect 13 top U.S. retailers, including TJX Cos and
Gap Inc, to post a 1.8 percent rise in same-store sales
for March, according to Thomson Reuters, down from an increase
of 2.9 percent a year earlier.
    Gap Inc will report its results after the markets close. 
    
   
    
    There were at least some bright spots in the month, the
economy and weather notwithstanding.
    Victoria's Secret parent L Brands Inc reported
higher-than-expected sales at all of its chains. Companywide,
same-store sales rose 3 percent, while Wall Street expected them
to be flat, according to Thomson Reuters data.
    Low-priced retailer Ross Stores Inc, which has less
exposure to the colder regions of North American than larger
rival TJX, posted an unexpected gain in same-store sales. It now
expects its quarterly profit to come in slightly above its
earlier range of $1.00 to $1.04 per share.
    Zumiez Inc and Buckle Inc, which cater to
younger shoppers who are particularly exposed to the vagaries of
the economy, both reported stronger-than-expected numbers.
American Apparel Inc said its March same-store sales
were up 8 percent.
    Still, many retailers were hampered by the cold start to
March, prompting many shoppers to put off buying warmer-weather
clothing.
    Also, Easter fell on March 31 this year, compared with April
8 last year. With colder temperatures and wintry weather leading
up to the holiday, shoppers may have held off on buying new
spring clothing.
    Low-priced specialty clothing chain Cato Corp,
regional department store operator Stein Mart Inc and
discount general merchandise retailer Fred's Inc all
blamed weather and Easter's timing for steeper-than-expected
drops in March same-store sales.
    Last week, Rite Aid Corp said its same-store sales
fell 2 percent, but sales of general merchandise, a closer proxy
to consumer discretionary spending, rose 3.8 percent.
    Larger rival Walgreen Co reported a modest 0.7
percent same-store sales gain, with a better showing for general
merchandise, which beat expectations.
    Excluding Walgreen and Rite Aid, whose results are heavily
skewed by prescriptions sales, Wall Street expects a gain of 2.2
percent in March same-store sales, down from a rise of 7.1
percent last year.