Top U.S. store chains from Costco Wholesale to Gap Inc posted disappointing April same-store sales, suggesting that Wall Street's hopes for a consumer rebound may be getting ahead of the pace of recovery.
Eleven out of 17 retailers that posted sales results at stores open at least a year came in short of analyst expectations, according to a tally by Thomson Reuters. An additional 11 store chains were due to report.
The lackluster results pushed down shares of many retailers, including Costco, Gap, Aeropostale and Target in premarket trading.
Nobody has told American consumers that the recession is over although some officials have rosy predictions of growing consumer spending, consumer trend expert Britt Beemer said in a note. We're seeing a lot of people on the edge of financial distress.
The results came a week after data showed that the U.S. economy expanded at a 3.2 percent annual rate in the first quarter as consumers increased spending at the fastest pace in three years.
But that may yet translate into mixed results for U.S. businesses, as people are more selective about where they spend, analysts say. In addition, a fresh report on jobless claims showed a slightly smaller-than-expected drop in unemployment filings, suggesting a more gradual recovery.
An early Easter prompted many U.S. consumers to move up their spring shopping to March, thereby stealing a good chunk of sales from April. Many industry experts look at the combined two-month results for a better read of the consumer sentiment.
Some retailers, including Limited and Macy's , also warned that a late Memorial Day could depress May sales while boosting June results.
Following a record 9.1 percent rise in same-store sales in March, analysts tweaked their April estimate to a modest 1.7 percent rise, compared with a drop of 2.7 percent last year.
An April increase would mark the eighth consecutive monthly sales rise after a year's worth of declines in the recession.
SIGNS OF MOMENTUM
Limited Brands Inc reported a 4 percent rise in April same-store sales, meeting analyst expectations. The company also forecast same-store sales to be flat to up in the low single digits in May.
Macy's reported a 1.1 percent increase in same-store sales, exceeding its own and analyst forecasts. For March-April combined, same-store sales were up 6.2 percent.
Discount chain Target said the combined March-April same-store sales increase of 3 percent was better than any monthly increase since April 2008.
Top U.S. warehouse club operator Costco reported an 11 percent rise in April same-store sales, boosted partly by higher gasoline prices. But the results narrowly missed the analysts' estimate calling for an 11.2 percent rise.
Clothing and home-goods retailer Urban Outfitters Inc reported a stronger-than-expected 25 percent rise in first-quarter revenue as it benefited from pent-up demand and better fashions. Its same-store sales for the quarter rose 11 percent.
On Wednesday, top U.S. drugstore chain Walgreen Co said same-store sales slipped 0.2 percent in April, slightly better than the 0.3 percent decline expected by three analysts, according to Thomson Reuters data. Same-store sales rose 1 percent in March and April combined.
As expected, teen retailers Hot Topic and Zumiez posted weaker-than-expected same-store sales in the month as many kids had already finished shopping ahead of Easter, or had returned to schools.
Hot Topic, however, narrowed its first-quarter loss forecast on improved merchandise mix.
Analysts were expecting same-store sales in the March-to-April combined period to rise 5.4 percent, up from a 4 percent gain in February and a 3.3 percent rise in January.
(Additional reporting by Brad Dorfman, Ben Klayman, Jessica Wohl, Martinne Geller, Nivedita Bhattacharjee; Editing by Michele Gershberg, Maureen Bavdek, Dave Zimmerman)