Feb. Retail Sales at Macy’s, Limited Surprise as Confidence Gains
FROM THE WIRES: Analysts estimated too low, as Macy's, for one rose 5.8%, compared to the projected 3.7%. At Victoria's Secret owner Limited, the actual 12% beat the 8.2% expected.
Sales at Macy’s Inc. and Victoria’s Secret owner Limited Brands Inc. surpassed analysts’ estimates in February as more confident U.S. shoppers embraced the arrival of warm-weather goods.
Same-store sales at Macy’s, the second-largest U.S. department store chain, rose 5.8 percent, compared with the 3.7 percent average gain from analysts’ estimates compiled by Retail Metrics Inc. Revenue at Limited advanced 12 percent, beating the 8.2 percent projection.
Confidence among U.S. consumers rose last month to the highest level in three years, according to a Thomson Reuters/University of Michigan index, as a drop in unemployment helped overcome concern over rising food and fuel costs. Customers also returned to stores that were closed for several days in January because of snowstorms.
“It’s a combination of pent-up demand for spring merchandise and the macro picture is improving,” said Ken Perkins, president of researcher Retail Metrics. “The jobs market is turning a corner. The result of that is consumers are experiencing more confidence in their ability to spend.”
Employment increased by 217,000 last month, more than forecast, according to a private report based on payrolls released yesterday by ADP Employer Services. The median estimate in the Bloomberg News survey for the Labor Department’s report tomorrow calls for a 190,000 gain, after employment increased by 36,000 in January.
18th Straight Gain
Retail Metrics, based in Swampscott, Massachusetts, estimated an increase of 3.8 percent in U.S. same-store sales for the 27 chains it tracks. That would mark the 18th straight monthly gain from September 2009. Overall results will be released later today.
Macy’s, based in Cincinnati, rose 30 cents to $23.88 at 8:17 a.m. before the open of the New York Stock Exchange. Limited, based in Columbus, Ohio, advanced 26 cents to $32.40.
Most chains count locations open at least a year to tabulate same-store sales. This revenue is a key indicator of a retailer’s growth because new and closed sites are excluded.
Same-store sales at Costco Wholesale Corp., the largest U.S. membership warehouse club, rose 5 percent, excluding changes in gasoline prices and currency exchange rates, the Issaquah, Washington-based company reported yesterday.
Analysts’ estimates for same-store sales rose throughout the month, increasing from 3 percent to 3.8 percent, according to Retail Metrics, as companies such as J.C. Penney Co. and Limited indicated strong February sales. Retailers as a group have surpassed analysts’ estimates in four of the past six months. In February 2010, same-store sales tracked by Retail Metrics climbed 4.1 percent.
“They are up against more difficult compares and estimates have been rising, so there is the potential for a letdown,” Perkins said.
--With assistance from Timothy Homan in Washington. Editors: Cecile Daurat, James Callan
To contact the reporter on this story: Matthew Townsend in New York at email@example.com
To contact the editor responsible for this story: Robin Ajello at firstname.lastname@example.org