U.S. retailers benefit from warmer April as sales bounce back
By Phil Wahba
NEW YORK (Reuters) - Spring was in full swing for some U.S. retailers, with shoppers spending again in April after the weather warmed up.
A number of large U.S. retailers, including Costco Wholesale Corp (COST.O: Quote) and Victoria's Secret parent L Brands Inc (LB.N: Quote), reported April comparable sales above expectations, helped in part by a later Easter that pushed sales from March, and the end of a harsh winter that had kept many shoppers at home.
A group of 10 retailers - which does not include such giants as Wal-Mart Stores Inc (WMT.N: Quote), Target Corp (TGT.N: Quote) and Best Buy Co (BBY.N: Quote) - reported a 6.4 percent increase in April comparable sales, better than the 4.1 percent rise analysts had expected, according to Thomson Reuters' same-store sales index.
"The April performance was strong and suggested that pent-up demand helped," said Michael Niemira, chief economist at the International Council of Shopping Centers.
There were hopeful signs for retailers after months of heavy discounting that slammed sales and profit margins in winter.
L Brands, whose shares rose 4.8 percent, raised its profit forecast and said it had been able to scale back promotions. Its comparable sales rose 8 percent.
Gap Inc (GPS.N: Quote) also said pressure on its gross margin is abating. Gap reported a 9 percent increase, led by its low-priced Old Navy chain, and the apparel company gave a profit forecast that surpassed Wall Street expectations, sending its shares up 5 percent in after-hours trading.
Costco reported a 5 percent increase, better than the 3.2 percent analysts had projected, and its shares rose 2.5 percent. Continued...