Friday, May 11, 2001

Cash registers rang gaily in April

Analysts watch whether trend develops

By Anne D'Innocenzio
The Associated Press

        NEW YORK — Most major retailers reported better-than-expected sales for April, as consumers, enticed by warmer weather, bought up lawn mowers and shorts.

        However, industry observers were reluctant to call the spending uptick the beginning of a long-term recovery, as consumers continue to struggle with rising energy prices as well as a deepening economic malaise.

        “April's results proved that a recovery is possible. May will have to prove it,” said C. Britt Beemer, chairman of America's Research Group, a Charleston, S.C. market research firm. “There still remain many economic fears in the minds of consumers today.”

   April same-store sales reported by the five leading retailers (sales compare the current year's sales with those of the previous year):
   • Wal-Mart Stores, up 6.5 percent.
   • Sears, Roebuck and Co., up 1.3 percent (domestic stores only).
   • Kmart, up 1.1 percent.
   • Target, up 1 percent.
   • J.C. Penney Co., up 3.2 percent (J.C. Penney stores only).
        Strong performances from discounters and value-oriented chains, particularly Wal-Mart Stores Inc. and Kohl's Corp., indicated that economic worries were keeping consumers price-conscious.

        Wal-Mart, the world's largest retailer and the industry's bellwether, turned in a better-than-expected 6.5 percent gain in sales at stores open at least a year, known as same-store sales. That was above analysts' expectations for a 3 to 5 percent gain.

        Kohl's delivered a 12.7 percent increase in same-store sales — well above analysts' projections.

        Locally, Federated Department Stores reported that same-store sales rose 0.8 percent in April. That gain came in at the low end of the company's expectation, but was aided by strong sales in the last week of the month, chief executive James Zimmerman said.

        At Dayton-based Elder-Beerman Stores, same-store sales fell 8 percent.

        Same-store sales are considered the best indicator of a retailer's health.

        Department stores, particularly May Department Stores Inc., and Dillard's Inc., remained weak, but the category showed some improvement. J.C. Penney Co., which has been struggling, and Saks Inc. posted results that beat Wall Street expectations.

        Specialty stores turned in a mixed performance, with Limited Stores Inc. and jeweler Zale Corp. reporting sales declines, while Talbots Inc. and teen retailer Abercrombie & Fitch reported robust gains.

        Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd., noted that the real test will be in the next several weeks to see if the uptick in spending holds.

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