NEW YORK – Retailers from discounter Target to department-store chain Macy’s reported better-than-expected sales in March in the latest sign that Americans are feeling better about the economy.
A combination of warm weather and high demand for spring fashions boosted revenue for the month, but analysts say there’s much more than higher temperatures at play. Americans initially cut back on spending during the recession and have continued to hold back in the slow recovery, but in recent months they’ve been feeling better about the economy as the stock market rises and unemployment falls.
“Retailers are benefiting from an improving employment and consumer confidence picture,” said Ken Perkins, president of Retail Metrics, a research firm.
Only a small group of retailers report monthly revenue figures, which only take into account revenue at stores open at least a year. Still, industry watchers say there’s a reason to be optimistic because the numbers offer a snapshot of consumer spending, which accounts for more than 70 percent of all economic activity.
Americans cut back on spending during the recession and have continued to hold back in the slow recovery. But in recent months, U.S. consumers have been seeing hope in some positive economic news. The stock market is up and unemployment is down.
Gap Inc., which owns Old Navy and Banana Republic and has been struggling recently, was one of the biggest success stories of the month. Revenue in stores open at least one year rose 8 percent, better than the 5.4 percent rise analysts polled by Thomson Reuters expected. That includes a 9 percent rise at namesake stores, an 11 percent rise at Old Navy and a 5 percent rise at Banana Republic.
“We delivered solid sales performance in March and are pleased with customer response to product across all brands,” said CEO Glenn Murphy.
Target Corp. and Macy’s also posted solid results and raised their forecasts.
Target reported revenue in stores open at last one year rose 7.3 percent, better than the 5.4 percent analysts expected. The company raised its fiscal first quarter guidance based on the strong results.
Macy’s reported the revenue figure rose 7.3 percent, beating expectations of a 4.8 percent rise. The company raised its forecast for revenue in stores open at least one year during the combined March and April period, to a 4.3 to 4.5 percent rise, from prior guidance of 3 to 3.5 percent rise.
But not everyone beat expectations. Costco Wholesale Corp.’s revenue at stores open at least a year climbed 6 percent in March, falling short of the 6.7 percent increase analysts expected. Stripping out higher gas prices and the negative impact of foreign currencies, revenue at stores in the U.S. increased 5 percent and climbed 9 percent internationally.
And the teen sector was a weak spot, with both The Buckle and Wet Seal missing analyst expectations.