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CHICAGO (Reuters) –
Most U.S. retailers posted better-than-expected February sales as leaner inventories resulted in more sales at full price, but record-setting snow in much the eastern part of the country curbed gains.
February also benefited from weak comparisons with the year-earlier month, when consumers reined in spending during the height of the recession, shopping only for deeply discounted merchandise.
Even retailers in sectors that have struggled in the past year, like department stores, were able to beat expectations. Macy's (M.N) said sales at stores open at least a year increased 3.7 percent, and Dillard's (DDS.N) reported a 2 percent rise.
Macy's same-store sales would have been up 5 percent without the snow, Chief Executive Officer Terry Lundgren said in a statement.
"Retailers have really done a great job of limiting their inventories, so they weren't stuck with a lot of stuff that they had to drastically mark down," said Ken Perkins, president of Retail Metrics.
Fourteen of the 19 retailers that have so far reported beat analysts' expectations, according to Thomson Reuters data.
The results bode well for March sales, which will also benefit from an earlier Easter than last year, Perkins said.
But the U.S. economic recovery is still tentative. U.S. consumer confidence sagged to a 10-month low in February amid worries about jobs and gridlock in Washington, which could also cap any rebound in the retail sector.
February is typically the slowest sales month for retailers, with the holidays and January clearance over and spring merchandise moving into their stores.
SUCCESS DESPITE SNOW
Clothing retailer Abercrombie & Fitch Co (ANF.N) also did better than expected in February. It posted a 5 percent increase in same-store sales instead of the 6.9 percent decline analysts on average expected, according to Thomson Reuters data.
Gap same-store sales rose 3 percent, compared with expectations of a 1.8 percent increase.
Abercrombie shares rose 9 percent to $39.50 in premarket trading, while Macy's was up 1.6 percent at $20.35 and Gap gained 2.9 percent to $22.40.
Since the beginning of February, the Standard & Poor's Retail Index (.RLX) has risen 6.4 percent, compared with a 2.7 percent increase for the S&P 500 (.SPX)
Sales of denim were strong at teen clothing retailers like Buckle Inc (BKE.N) and Wet Seal (WTSLA.O), helping another sector that was expected to lag.
Limited Brands Inc (LTD.N), owner of Victoria's Secret and Bath & Body Works, posted a slightly better-than-expected 10 percent rise in same-store sales, with increases at all of its chains.
Snowfall at times shut down cities like Philadelphia, Baltimore and Washington. Even in Manhattan, heavy storms on February 10 and February 25 made it difficult to get around. That may have limited traffic in stores, but the higher selling prices lifted sales, analysts said.
Monthly sales data provide a snapshot at certain retailers, but are less reliable as a measure of the economy as a whole, since industry leader Wal-Mart Stores Inc (WMT.N) and other major companies like Best Buy Co Inc (BBY.N) and Amazon.com (AMZN.O) do not report the monthly figures.
Analysts on average forecast a 2.9 percent increase in same-store sales for 28 retailers that report those figures each month, according to Thomson Reuters data.
The forecast had dropped from a 3.2 percent increase predicted last week and compares with a 4.7 percent decline in 2009.
On Wednesday, both Costco Wholesale Corp (COST.O) and BJ's Wholesale Club Inc (BJ.N) said the weather had hurt their results, although strong gasoline sales helped those companies beat Wall Street expectations.
Drugstore operator Walgreen Co (WAG.N), one of the largest retailers that still reports monthly, said same-store sales of general merchandise fell 0.6 percent in February.
(Additional reporting by Jessica Wohl, Martinne Geller, Nicole Maestri and Phil Wahba; Editing by Lisa Von Ahn)
