Friday, May 14, 2010 | 10:53 a.m.
U.S. retailers reported earlier this month the smallest increase in monthly sales since November, with teen-clothing retailers Abercrombie & Fitch Co. and Aeropostale Inc. dragging down results.
April sales at 30 chains rose 0.8 percent, less than the 2 percent projected gain, researcher Retail Metrics Inc. said. Abercrombie’s sales at stores open at least year dropped 7 percent, more than the 1.8 percent decline projected by analysts. Aeropostale’s sales fell 5 percent, also trailing the average of analysts’ estimates compiled by Retail Metrics.
An earlier Easter this year pushed more holiday-related shopping into the previous month, tempering April spending. Sales growth should improve in May and accelerate with back-to- school purchases later this year as consumers emerge from the worst economic slump since the Great Depression, according to Howard Tubin, an analyst at RBC Capital Markets in New York.
“I don’t think it’s a sign of what’s to come,” said Tubin, referring to the April figures reported by retailers. “There’s been a renewed interest in fashion by the consumer.” Aeropostale’s combined sales for March and April grew 8 percent, better than a gain of 7 percent in February, Michael Cunningham, the retailer’s chief financial officer and president, said. The company increased merchandise profit margins by selling more items at full price last month than a year ago, he said.
“We knew it would be challenging because of Easter and coupled with that there were points in April where the weather was a bit colder,” Cunningham said. “I don’t think it’s a negative reflection on the consumer.”
Luxury retail chains and some discounters held up during April. Nordstrom Inc.’s sales jumped 7.5 percent, beating the analyst estimate of 6.1 percent. Neiman Marcus Group Inc. reported an 11 percent spurt. Saks Inc.’s sales grew 3.2 percent. Costco Wholesale Corp. and TJX Cos. both showed gains.
“The luxury shoppers are always going to continue to buy the latest fashion, and discount folks are always going to look for the best deal,” said Sherif Mityas, a partner at A.T. Kearney, a retail consulting firm, in Chicago.
For teen and specialty retailers, sustaining sales growth was difficultbecause middle-class shoppers are holding back on purchases after lastyear’s recession, Mityas said.
“They are going to buy, but not going to buy completely unleashed,” Mityas said. “Many feel they have more money in their wallet, but don’t necessarily need to spend it. There was a breath taken in April after spending some dollars in March.”
Gap Inc., the owner of Old Navy and Banana Republic, reported comparable store sales dropped 3 percent. Analysts had anticipated a 0.6 percent gain, according to Swampscott, Mass.-based Retail Metrics.
Ken Perkins, president of Retail Metrics, estimates about 3 percent growth in retailers’ same-store sales through the summer.
Confidence among U.S. consumers declined in April from the previous month, a Reuters/University of Michigan report released April 30 showed. That contrasted with a Conference Board survey that showed Americans’ sentiment in April increased to the highest level since September 2008 as respondents anticipated greater job availability.