May 8, 2008 / 12:32 PM / 10 years ago

WRAPUP 4-US shoppers went for bargains in April rebound

(Adds International Council of Shopping Centers data, paragraph 2)

By Justin Grant

NEW YORK, May 8 (Reuters) - U.S. retail sales rebounded in April after the worst March in 13 years, as warmer weather boosted demand for spring and summer apparel, while most discounters shined as cash-strapped consumers hunted for bargains.

April sales at U.S. chain stores open at least a year, a key retail measure known as same-store sales, rose 3.6 percent from the same month last year, according to the International Council of Shopping Centers.

Overall, 68 percent of U.S. retailers reported better-than-expected same-store sales, according to Thomson Reuters data.

April was the best month for retailers since November, said Ken Perkins, president of Retail Metrics Inc.

Warehouse club operators who give discounts to shoppers buying in bulk -- such as Wal-Mart Stores Inc’s (WMT.N) Sam’s Club, Costco Wholesale Corp (COST.O) and BJ’s Wholesale Club BJ.N -- performed well.

Many retailers have struggled in recent months as consumers pare spending on less essential items in light of soaring gasoline prices and grocery bills.

Crude oil prices have surged to more than $120 a barrel, keeping gasoline prices high. As of May 2, the average retail price for gasoline was a record $3.6245 a gallon.

“Discounters clearly stood head and shoulders above all comers,” Perkins said.

Wal-Mart, the world’s largest retailer, said sales at stores open at least a year rose 3.2 percent in April, excluding fuel sales -- topping the average analyst estimate of 2.1 percent growth, according to Reuters Estimates.

At its Sam’s Club warehouse segment, same-store sales advanced 6.6 percent.

In April, Reuters did a number of stories on paycheck spending, one of which can be found by clicking here [ID:nN02215936]

Costco, the nation’s largest warehouse club operator posted an 8 percent increase in April same-store sales, while total sales climbed 12 percent to $5.54 billion. Analysts, on average, had expected a 6 percent increase in same-store sales.

“We are, of course, benefiting from some inflation on the food side as a result of the recent run up in the cost of commodities and the continued run up in the price of oil and gasoline,” the company said.

BJ‘s, the No. 3 U.S. warehouse club operator, said April same-store sales rose 17.8 percent. Gasoline was responsible for 5.5 percent of that gain, BJ’s said.

Target Corp (TGT.N) was the lone damper in the category, missing Wall Street’s expectations for a second straight month. The discounter said April same-store sales rose 3.1 percent, missing the average analyst estimate of 4.5 percent.

EARLY EASTER, WARMER TEMPS

Some companies benefited from Easter falling in March, meaning retailers had an extra day of possible sales during April. The holiday -- which usually falls in April -- takes away one shopping day and reduces total sales for the month.

Warmer weather during the first half of the month drove a spike in demand for spring and summer apparel.

TJX Cos Inc (TJX.N), which operates the T.J. Maxx and Marshalls chains, credited warm weather with its 8 percent rise in April same-store sales. Analysts, on average had expected a 6.3 percent rise.

Fresh spring and summer fashions also brought teens out from their winter hibernation, as clothing retailer Aeropostale Inc ARO.N soared, posting a 25 percent increase in April same-store sales, nearly three times Wall Street’s average forecast.

    Analysts had expected 7.9 percent sales growth from the mall-based company.

    Aeropostale, which sells flip-flops and vintage-style T-shirts, also upped its first-quarter earnings forecast to 25 cents a share, from a prior range of 20 to 22 cents a share.

    “The apparel story is definitely a surprise to me. I had expected apparel would be weak because of the economic challenges,” said Russell Jones, retail director at Alix Partners.

    “It’s much more volatile than the discount segment in the sense that ... it’s easier to skip the apparel purchase than it is to skip the food purchase.”

    Struggling department store operator J.C. Penney Co (JCP.N) credited the weather for helping it top Wall Street’s expectations.

    The company said April sales at department stores open at least a year fell 1.7 percent, while analysts expected a 5.8 percent drop.

    American Eagle Outfitters Inc (AEO.N) also topped estimates, with same-store sales rising 2 percent. Analysts had expected a decrease of 0.6 percent.

    THE LAGGARDS

    By contrast, Pacific Sunwear of California Inc PSUN.O said same-store sales climbed 4 percent, missing Wall Street’s expectation of 5 percent growth.

    Limited Brands Inc LTD.N, the operator of the Victoria’s Secret and Bath & Body Works chains said April same-store sales fell by a wider-than-expected 5 percent. Analysts, on average, had expected a same-store sales decline of 2.5 percent.

    And at Gap Inc (GPS.N), same-store sales fell by a wider-than-expected 6 percent. Analysts, on average, had expected a decline of 2 percent.

    For a table giving more detail on April retail sales click on [ID:nBNG84062]. (Reporting by Justin Grant; editing by Dave Zimmerman and Tim Dobbyn)

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