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Author Topic: Retailers had good March, but warn of poor April  (Read 383 times)

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Offline Matthew

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Retailers had good March, but warn of poor April
« on: April 12, 2007, 04:29:18 PM »
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  • By Karen Jacobs Thu Apr 12, 9:20 AM ET

    ATLANTA (Reuters) - Retailers reported stronger-than-expected March sales on Thursday, helped by this year's earlier Easter holiday.

    But what the calendar gave retailers in March, it will probably take away in April as many chains warned that comparable-store sales results will suffer this month. Some retailers also noted continued softness in sales of home goods amid the weaker U.S. housing market.

    Wal-Mart Stores Inc. (NYSE:WMT - news), the world's largest retailer, posted a better-than-expected 4 percent rise in March sales at U.S. stores open at least a year, above the 1.9 percent increase analysts expected, according to a Reuters survey. Wal-Mart said sales were strong in food and pharmacy, but soft in home and apparel.

    The Bentonville, Arkansas, company said April sales would be flat to down 2 percent because of the earlier Easter and a strong April last year.

    Wal-Mart warned that meeting its quarterly earnings forecast of 68 cents to 71 cents per share from continuing operations would be difficult.

    "While the earnings guidance is still attainable, given the tough sales environment for the April period, it will be a challenge," Chief Financial Officer Tom Schoewe said in a statement.

    Easter fell on April 8 this year, compared with April 16 in 2006, so sales of holiday-related items came largely during retailers' March sales periods.

    Also, some chains said sales benefited from an extra week in the last fiscal year, which caused the March selling period to begin and end one week later than in 2006.

    On Wednesday, Wal-Mart rival Target Corp. (NYSE:TGT - news) said its March same-store sales rose 12 percent, in line with its expectations, but said April sales should fall 2 percent to 4 percent.

    Among department stores, J.C. Penney Co. (NYSE:JCP - news) said March comparable sales at its department stores rose 10.6 percent on strong demand for clothing, beating its own and Wall Street's forecasts. Dillard's Inc. (NYSE:DDS - news) also turned in stronger-than-expected sales, citing Easter shopping.

    But Federated Department Stores Inc. (NYSE:FD - news) stores, the parent of Macy's and Bloomingdale's, said same-store sales rose a lower-than-expected 2.3 percent. It had forecast an increase of at least 2.5 percent, while analysts had expected a 3.6 percent gain.

    Federated, which plans to change its corporate name to Macy's Inc. this year, said March sales suffered from continued weakness in home goods and cold weather before Easter.

    Most luxury retailers, including Nordstrom Inc. (NYSE:JWN - news), turned in better-than-expected sales as their consumers bought upscale goods despite rising gasoline prices. Nordstrom said March same-store sales were up 15 percent, compared with an 8.6 percent gain expected by analysts.

    Still, Nordstrom said the 2007 calendar shift would hurt April results, which it expects to run below the mid-single-digit percentage growth rate it had forecast for its first quarter.
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