Retail Sales Triumph Over Nasty Weather (COST, TGT, BJ, BIG, WMT, LTD, GPS, AEO, DDS, M, JCP)

All that snow in January didn’t keep shoppers at home, apparently, as retailers posted a 4.2% increase in same-store sales for the month. That topped estimates that had started at 3.1% growth before falling to 2.7% as analysts didn’t believe that shoppers would brave the cold and snow.

In the big-box stores, January same-store sales varied. Costco Wholesale Corp. (NASDAQ: COST) sales rose 6%, excluding gasoline and currency fluctuations, while analysts were expecting a 5% jump. Target Corp. (NYSE: TGT) reported sales rose 1.7%, compared with expectations of 1.9%. Target noted that sales were weaker than expected in some parts of the south and northeast US.

BJ’s Wholesale Club Inc. (NYSE: BJ) had a particularly tough month because so many of its stores are in the northeast and Mid-Atlantic states, which were especially hard hit by bad weather. BJ’s sales rose just 0.3%, excluding gasoline, compared with expectations of 0.8% growth. The company also announced that it would explore strategic alternatives, including a sale of itself. Wal-Mart Stores Inc. (NYSE: WMT) does not report monthly sales.

Discount retailer Big Lots Inc. (NYSE: BIG) reported flat same-store sales, at the bottom end of its own prediction that sales would be flat or up by 2%.

The results at clothing retailers varied wildly. Limited Brands Inc. (NYSE: LTD) reported same-store sales rose 24% in January. Analysts had been expecting a rise of 6.7%. For the full year, Limited reported net sales rose more than $1 billion, from $8.63 billion to $9.61 billion.

Same-store sales at Gap Inc. (NYSE: GPS) rose 1%, compared with analysts’ consensus estimates of a decline of -3.1%. The company also said that it expects to report 2010 full-year EPS of $1.85-$1.86, up from previous guidance of $1.77-$1.82. Expectations had been for EPS of $1.81.

Teen clothier American Eagle Outfitters Inc. (NYSE: AEO) reported same-store sales fell -6% in January, better than the -8.3% drop expected by analysts. American Eagle will no longer report monthly sales data.

Department store results were mixed. Dillard’s Inc. (NYSE: DDS) reported same-store sales rose by 6%, compared with estimates of a 2% increase. Macy’s Inc.  (NYSE:M)  said sales rose 2.6%, better than expectations of 2.1%.

J.C. Penney Co., Inc. (NYSE: JCP) reported that sales fell by -1.2%, while analysts had expected a rise of 1.8%. But Penney’s raised its EPS estimate for the fourth quarter from $0.90-$1.00, to $1.06-$1.09, well above analysts’ EPS estimates of $0.97.

In general, the expected weather effects did not have the expected impact on sales. Markdowns were common, but there was less merchandise to clear out this year because retailers kept a closer eye on inventories going into the holiday season.

Paul Ausick