Have retail sales turned the corner?
Many chains reported that same-store sales were merely awful instead of cataclysmic. The major stock indexes rallied on the new indicating that investors are beginning to believe predictions that the economy may turn around late this year or early next year.
Leading the way was Wal-Mart Stores Inc. (WMT), which said U.S. comparable store sales rose 5.9 percent during the April due to strong demand for Easter merchandise. The biggest retailer has benefited as consumers "trade down" to the chain from pricier rivals. Overall, net sales rose 2.4 percent to $29.853 billion.
"Walmart U.S. comparable store sales in April continued to show the underlying strength of our business," said Eduardo Castro-Wright, vice chairman, Wal-Mart Stores, Inc., in a press release. "We gained new customers, improved our market share position and found that when customers had more money to spend, they spent it more often at Walmart."
Wal-Mart also forecasted sales for the fiscal quarter ending April 30 of $93 billion, a tad below the $96 billion forecast by analysts surveyed by Thomson Reuters. The monthly sales performance surpassed analysts' expectations, according to Reuters. It will also be the last monthly sales it reports.
Other retailers that Reuters noted beating expectations include Children's Place Retail Stores Inc. (PLCE) and teen retailer The Buckle Inc. (BKE), women's accessories seller The Wet Seal Inc. (WTSLA) and snowboarding gear provider Zumiez Inc. (ZUMZ). Hip clothing retailer Aeropostale Inc. (ARO) also reported stronger-than-expected results.
Costco Wholesale Corp. (COST), once a darling of Wall Street, was an exception. The Issaquah, Washington-based company reported that net sales in April were $5.18 billion, a decrease of six percent from $5.54 billion in the same four-week period last year. Comparable same-store sales slumped 8 percent. Wall Street apparently feared worse and investors sent shares of the retailer in pre-market trading.
Wall Street still isn't expecting great things from the retail sector.
"Retail Metrics, working from a compilation of analysts' estimates, said comparable-store sales probably rose 0.1 percent in April,"according to Bloomberg News. "Excluding Wal-Mart and drugstore chains, sales may have dropped 5 percent."