Friday, March 5, 2010

Retailers see best month in 2 years

Retailers' slow but steady recovery gained more ground in February, with the nation's merchants posting their best sales results in more than two years.
Among Nashville-area companies on the upswing was Genesco, the shoe and hat retail chain with a national reach. Its fourth-quarter profits rose 11 percent, beating Wall Street forecasts. The stock rose nearly 7 percent on Thursday, to close up $1.80 per share at $27.61 on the New York Stock Exchange.

Genesco officials said that same-store sales — sales at stores open at least a year — could rise as much as 2 percent to 3 percent in the year ahead.

Nationally, despite severe snowstorms in the East and lesser storms in the Midwest and South, consumers still turned up at shopping malls to buy spring merchandise and other goods, helping retail stores report a 4 percent year-over-year sales increase last month, according to a Thomson Reuters tally of
28 major chains.

It was the strongest gain since November 2007, a month before the recession began, and the sixth-consecutive month of increases.

With the exception of drugstores, every sector — including discounters, department stores and apparel sellers — did better than forecasts. Among individual retailers, more than three-fourths outperformed expectations, including Ross Stores Inc., Nordstrom and Abercrombie & Fitch.

"Given the snowstorms and barrage of negative economic data last week, it was a bit of a surprise how strong the sales were this month," said Ken Perkins, president of research company Retail Metrics Inc. "I think the retailers have to be pleasantly surprised and are hopeful that this is the tip of an increasing wave of consumer spending."

Still, many industry watchers caution that economic problems persist and could hamper consumer spending. Fresh U.S. unemployment data is due out today, for instance.

"Although some numbers are certainly very good, they're inflated or helped along by very weak sales a year ago," said Kamalesh Rao, director of economic research at SpendingPulse, an information service of MasterCard Advisors, which also tracks retail spending. "It's not quite firm footing; it's not quite robust growth."

Top retail performers included off-price seller Ross, which posted an 11 percent sales increase and upscale department store chain Nordstrom, with a 10.3 percent rise for the month. TJX Cos., which operates off-price chains T.J. Maxx and Marshalls, and apparel chain Limited, parent of the Victoria's Secret and Bath & Body Works brands, posted 10 percent gains.

Wal-Mart Stores Inc., the world's largest retailer, no longer reports sales data on a monthly basis.

Some chains, including department store chain Macy's Inc., said sales would have been better if weather conditions hadn't been so brutal.

Tennessean retail reporter Wendy Lee contributed to this story.

Real Estate Outlook: Increase in Housing StartsYear-end economic spurt shows signs of sputtering