- The Washington Times - Thursday, February 3, 2005

NEW YORK (AP) — Consumers lured by clearance sales and a fresh assortment of spring apparel gave many of the nation’s retailers solid January sales despite late-month snowstorms in the Midwest and Northeast.

As merchants released their results yesterday, a diverse group of retailers had sales that beat Wall Street expectations, including clothing stores Abercrombie & Fitch and Talbots Inc., department store chain J.C. Penney Co. Inc. and discounter Target Corp.

The month provided some encouraging trends — stores including J.C. Penney, Talbots and Gap Inc. reported strong sales of regular-priced spring merchandise, indicating consumers are feeling better about spending.

“Solid sales of spring goods this early in the season indicate that consumers are feeling better,” said Ken Perkins, an analyst at Retail Metrics LLC, a research firm in Swampscott, Mass. “It also bodes well for the bottom line.”

Mr. Perkins predicted fourth-quarter earnings will be strong, although nervous retailers resorted to markdowns as shoppers procrastinated during December. “The heavy discounting that took place doesn’t seem to have taken a big bite out of the bottom line as one might have expected,” he said.

There were some disappointments during January, including an overall sales decline at Gap Inc. and a drop at May Department Stores Co., but the month generally was good.

The International Council of Shopping Centers-UBS preliminary sales tally of 70 retailers rose 3.7 percent in January, higher than the 2.5 percent forecast. The tally is based on same-store sales, which are sales at stores opened at least a year. They are considered the best indicator of a retailer’s health.

Analysts were worried about January’s results because of the severe weather at the end of the month, but Michael P. Niemira, chief economist at the International Council of Shopping Centers, said, “Stores are holding up.” January is the final and least important month in the retail-sales calendar, but nonetheless is an indicator of consumer spending.

Wal-Mart Stores Inc., the world’s largest retailer, reported a 2.5 percent increase in same-store sales, compared with a 2.6 percent estimate from analysts polled by Thomson First Call.

The discounter’s original forecast was for a 2 percent to 4 percent gain, but on Monday Wal-Mart estimated that same-store sales would be up 2.5 percent, hurt by the snowy weather in the Northeast and Midwest.

Wal-Mart and other retailers said January business also was affected by the timing of the Super Bowl, which is being held Sunday, after being played in January last year. That means sales of party items and snack foods will fall in February this year.

Rival Target had a 9.4 percent gain in same-store sales, above the 6.6 percent analyst estimate. Total sales rose 13.6 percent.


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