US retailers posted better-than-expected monthly sales results for a second straight month last month, giving fresh evidence that consumer spending is warming up with the spring weather.
Nearly two-thirds of the retailers that reported last month’s sales at stores open at least a year topped Wall Street estimates and a handful said their first-quarter results, which start landing next week, will be better than expected.
“Overall, you are seeing some signs of a return to discretionary purchases throughout different areas of retail,” said Barclays Capital analyst Robert Drbul.
He said the shift of Easter into April this year from March last year aided the comparisons, while lower gasoline prices and payroll taxes likely cushioned household budgets.
Thomson Reuters’ revenue-weighted same-store sales index showed that overall same-store sales rose 1.2 percent, surprising analysts who expected a drop of 0.2 percent.
Excluding Wal-Mart Stores Inc, sales fell 2.7 percent, still topping the 3.4 percent drop analysts expected.
Nonetheless, retail shares fell in afternoon trading, with the Standard & Poor’s Retail Index down almost 2 percent.
“It’s hard to really ... be terribly excited,” said Michael Niemira, chief economist with the International Council of Shopping Centers (ICSC), since the results only demonstrate a move from “extreme weakness” to “moderate weakness.”
Niemira added the ICSC expects same-store sales to be flat to down 1 percent for this month.
Retailers did not say whether the H1N1 flu drove demand for health-related items, nor whether fear of catching the virus kept US shoppers away from malls already seeing lighter traffic during the recession.
With the S&P Retail Index up 14 percent since the beginning of last month, Drbul struck a cautious tone, noting comparisons would get more difficult as money from tax rebates wanes and retailers cycle the boost from last year’s economic stimulus checks.
Wal-Mart’s US sales at stores open at least a year rose 5 percent, compared with analysts’ average estimate for a 2.9 percent increase, Thomson Reuters data showed. The world’s largest retailer cited demand for Easter merchandise, as well as discretionary items such as entertainment and home goods.
Target Corp, in the heat of a proxy battle with Pershing Square Capital Management, said its sales rose 0.3 percent, just below analysts’ view for a rise of 0.4 percent.
Still, Target said it now expects first-quarter profit to be “well above” US$0.52 per share, driven by better than expected results at its stores, where it has been keeping tight controls on inventory. Its shares rose about 2 percent.
Analysts, on average, were expecting Target to earn US$0.53 per share, Reuters Estimates showed.
Gap Inc posted a smaller-than-expected 4 percent same-store sales drop and plans to post a first-quarter profit of US$0.29 to US$0.30 per share, above analysts’ estimate of US$0.24. Gap said operating expenses should be about US$70 million less than a year ago and its shares rose about 3 percent.
Lazard Capital Markets analyst Todd Slater noted much of Gap’s strength stems from its lower-priced Old Navy chain improving its merchandise to attract cost-conscious shoppers.
“While trends at Old Navy are improving, we believe business momentum at Gap stores and Banana Republic continues to deteriorate,” Slater said.
Macy’s Inc forecast a first-quarter loss of US$0.19 to US$0.21 per share, better than the US$0.27 per share loss analysts expected. Still, Macy’s kept its profit view for this year intact because of continued economic uncertainty and its shares fell 5 percent.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique