Retail Sales Continue Cheery Spring
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U.S. Economy
NEW YORK (Reuters) - Shoppers have not lost their ardor for new clothes and the latest electronics, according to May retail sales figures that beat most forecasts.
''At first glance, it appears to be a continuation of a very good spring particularly in apparel. They are off to a good start,'' said Jeffrey Stein, analyst at KeyCorp.'s McDonald Investments division.
Retailers Thursday reported sales figures for the four weeks ended Saturday, May 29. Most of the sales associated with the Memorial Day holiday will be included in June results.
Sales at Wal-Mart Stores Inc. (NYSE:WMT - news), the world's largest retailer, rose 14.3 percent to $11.83 billion. Sales in all Wal-Mart stores opened at least a year-- called same-store sales-- increased 7.7 percent for the month.
Electronics retailers were among the stronger performers in terms of same-store sales with Radio Shack parent Tandy Corp. (NYSE:TAN - news) posting a 17 percent increase and Best Buy Co. turning in a 13.3 percent increase.
Best Buy also said it expects to report earnings of 20 cents a share in the first quarter, which is 7 cents above analysts' estimates and an increase from 8 cents a share in last year's first quarter.
Kmart Corp. posted a 3.7 percent increase in May's same-store sales, while total sales increased 5.6 percent to $2.75 billion for the four weeks ended May 26.
''Kmart's sales pace for May was satisfactory given the timing of the holiday period and cooler weather mid-month which affected seasonal items,'' said Kmart Chairman, President and Chief Executive Floyd Hall.
''For purposes of comparison with the retail industry, Kmart's May fiscal period ended the Wednesday before Memorial Day, costing us approximately one percent to two percent in sales momentum, but giving the company a strong start to June,'' he said.
At Dayton Hudson Corp., the parent company of Target and Mervyn's, same-store sales increased 6.3 percent in May and total sales rose 10.9 percent. The Target discount division reported a same-store sales gain of 7.4 percent.
Department stores exceeded their internal sales plans.
Sears Roebuck and Co. reported a same-store sales increase of 1.9 percent, beating a forecast of 1.5 percent.
J.C. Penney Co. Inc. posted a 2.2 percent increase in same-store sales, beating expectations of a 2 percent drop for the month.
Federated Department Stores Inc. (NYSE:FD - news), the parent company of Bloomingdales and Macy's, reported a 4.1 percent increase in May same-store sales, topping forecasts of a 1.0 percent increase. May Department Stores Co. (NYSE:MAY - news) exceeded expectations of flat same store sales growth by posting a 7.7 percent increase at its chains, which include Lord & Taylor.
At the warehouse clubs, Costco Cos. Inc. and BJ's Wholesale Club Inc. showed same-store sales growth of 11 percent and 8.3 percent, respectively.
Gap Inc. turned in a strong May with an 8 percent increase in May's same-store sales. This increase comes on top of a 24 percent increase reported last May, which is one of its toughest comparisons from last year.
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