Top retail chains posted a record rise in monthly same-store sales for March, helped by an early Easter holiday and an improving job market, in the strongest sign yet of revived consumer demand.
Sales at stores open at least a year rose 9.1 percent in March, the largest monthly jump since Thomson Reuters began tracking results in 2000 and ahead of Wall Street estimates of a 6.3 percent increase. More than 90 percent of 28 retailers tracked beat expectations.
Executives at retailers from department store operator Macy's
But analysts and economists focused on trends for the combined two-month period, saying underlying consumer spending was accelerating after six months of modest growth.
Michael Niemira, chief economist at the International Council of Shopping Centers, said same-store sales had risen 9 percent in March by his tally, and he predicted April would be flat to down 3 percent.
It does bode well that the underlying performance continues to show a healthy recovery, he said. I think we are seeing that sustained pickup. It won't be 9 percent. It may be 4 percent.
Analysts said retailers also received extra help from better weather, a recovering labor market and easy comparisons to 2009, when same-store sales fell 5 percent.
While department stores outperformed their peers with a 12.3 percent rise, discount retailers also enjoyed a strong March. Teen apparel chains, which suffered double-digit sales declines a year earlier, beat expectations.
The results were strong across all industry groups, said Ken Perkins, president of Retail Metrics. It was clearly broad-based strength and suggests to us that it just wasn't about the Easter holiday shift and the improved weather.
Retail shares tracked by the Standard & Poor's Retail Index <.RLX> finished the day up 1.3 percent on Thursday, helping lift the wider S&P 500 Index <.SPX> into positive territory despite worries about a potential default in Greece.
Easter sales were expected to hit $13 billion this year, far less than other holiday periods such as the weekend of Black Friday in November, when shoppers spent $41.2 billion, according to the National Retail Federation.
But industry experts see the holiday as an indicator of summer clothes shopping. Some questioned whether the even average growth was sustainable while U.S. unemployment remains high.
To just assume that this means the consumer is back and retail is going to return to its former glory is frankly inane, said Patricia Edwards, founder of wealth management firm Storehouse Partners. This is a little bit frugality fatigue.
Department stores saw the biggest gains in March but said April results would be far more modest.
Macy's said same-store sales rose 10.8 percent from a year earlier, well ahead of the 7.9 percent increase analysts had expected. It forecast flat results for April.
Rival chain Kohl's
Other retailers sounded similar warnings. TJX Cos Inc
Kohl's shares closed the day down 0.9 percent, while Macy's ended up 0.9 percent. Target gained as well, ending 3 percent higher after saying that earnings would come in ahead of Wall Street forecasts.
Retailers that reported March sales above Wall Street expectations also included Limited Brands Inc
Upscale department stores also fared well. Nordstrom Inc
But in a sign of how Wall Street expectations may be getting ahead of performance, Abercrombie & Fitch
(Additional reporting by Martinne Geller, Ben Klayman, Brad Dorfman, Jessica Wohl, Dhanya Skariachan, Alexandria Sage, Shradhha Sharma, Renju Jose and Viraj Nair; Editing by Michele Gershberg, Leslie Gevirtz and Matthew Lewis)