Storms chill Wal-Mart, other retailers

By Nicole Maestri

CHICAGO (Reuters) - Retailers like Wal-Mart Stores Inc. (WMT.N) and Federated Department Stores FD.N reported weak February sales on Thursday, saying the month's cold temperatures and stormy weather hampered results.

But upscale department stores and Wal-Mart rival Target Corp. (TGT.N) bucked the trend, posting stronger-than-expected comparable-store sales figures, and some retailers said they expected the Easter holiday to help their March results.

The Standard and Poor's retail index .RLX rose 1.8 percent in late morning trading following the results.

"I think that the market was expecting weak comps so in a sense, any company that came in with good numbers was a relatively strong surprise," said Sarah Henry, an investment analyst at MFC Global Investment Management.

Analysts were forecasting lackluster February sales results after last month marked the coldest February since 1979, according to weather tracking firm Planalytics.

While frigid temperatures boosted U.S. retailer's sales in January, February's mix of cold temperatures and winter storms kept shoppers inside and hurt retailers that had already stocked their stores with spring merchandise.

Ken Perkins, president of Retail Metrics LLC, said 60 percent of retailers in Retail Metrics' index missed sales expectations.

"We had a few upside surprises, which was nice to see," he said, but added: "We have to categorize the sales as a whole as definitely on the soft side."

But leading up to the results, analysts also cautioned that February typically accounts for a small portion of retailers' overall sales.

"We think that investors should keep the month in its proper perspective -- as one of the least relevant of the year," wrote Deutsche Bank analyst Mike Baker in a research note on March 5.

WAL-MART DISAPPOINTS

Wal-Mart, the world's largest retailer, reported a lower-than-expected 0.9 percent rise in its February sales at its U.S. stores open at least a year. It also forecast a tepid gain of 1 percent to 2 percent for its March sales.

Wal-Mart, which has been struggling to reinvigorate its U.S. sales, said that during February it continued to see weakness in its home and apparel business, and the trend is expected to persist through the spring.

It also said its February sales were hurt by unfavorable weather.

But at rival Target, same-store sales rose 5.7 percent in February. That was at the high end of the company's forecast of a 4 to 6 percent gain, and it beat analyst expectations of a 5.1 percent rise.