Q4 Retail Sales Sag on Poor Showing From Wal-Mart; February Sales Up Slightly

The best that can be said for February same-store sales is that they won’t be as bad as January’s sales, which were down 1.3%. Among the small group of stores still reporting monthly sales, research firm Retail Metrics expects sales to come in 0.2% higher than January sales. Last February, same-store sales rose 1.2% year over year.

For the fourth fiscal quarter of 2015, same-store sales are currently 1.2% lower than they were in the fourth quarter of 2014. About half of the 119 stores tracked by Retail Metrics have reported earnings so far. Excluding a 9% sales decline at Wal-Mart Stores Inc. (NYSE: WMT), reported retail sales for the fourth-quarter are up 1.4%.

February, the first month of the first fiscal quarter for most retailers, is primarily a transition time from cold-weather gear to spring merchandise. Cooler weather finally arrived in the United States in January and carried over into February. That helped retailers move their winter merchandise out, but a clearance prices.

For the rest of the first quarter, March benefits from the early (March 27) Easter holiday and being a five-week month this year, and April is expected to experience its usual warm-weather bounce.
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Retail Metrics noted:

Long-term retail stand out L Brands raised its February same store sales range from low-single digits at the start of the month to mid-single digits when it reported 4Q15 earnings indicating that both Victoria’s Secret and Bath & Body Works were running up mid-single digits. L Brands mid-single digit comp is likely to be the February standout even though the group faces relatively easy comparisons for the month of just 1.2%. Expectations for other apparel retailers The Buckle, Zumiez, and The Gap are all negative. Costco, the most heavily weighted retailer in the monthly reporting index is also projected to report a slightly negative comp as it continues to face gas prices and strong dollar headwinds to its comp store sales growth.

Among stores reporting monthly same-store sales on Thursday, Costco Wholesale Corp. (NASDAQ: COST) is estimated to post a drop of 0.1%, compared with a 1% gain in February 2015, mostly due to the low price of gasoline. Excluding gas, Retail Metrics sees Costco posting a same-store sales gain of 3.8% in February.

Gap Stores Inc. (NYSE: GPS) is expected to report a drop of 1.7% in February compared with a drop of 4% in 2015. L Brands Inc. (NYSE: LB), which operates Victoria’s Secret, Pink, Bath & Body Works, La Senza and Henri Bendel stores, is estimated to post a same-store sales gain of 5%, down from a 6% gain in February 2015.