An Early Easter Benefits Some but Not All Retailers in March



Clothing and accessories stores performance

After almost flat sales in February and declines in December and January, clothing and clothing accessory stores posted a 1.2% month-over-month gain in March 2015 retail sales. Cato Corp (CATO) and L Brands (LB) respectively posted strong same-store sales growth of 12% and 9% in the five weeks ended April 4, 2015. The Gap (GPS) reported a 2% increase in same-store sales for the five weeks ended April 5, 2015.

Sales were boosted by an early Easter, which fell in early April this year instead of in mid-April in 2014. LB estimates an early Easter positively impacted sales by 3% to 4%.

Yet, sales figures for apparel retailers reporting monthly same-store sales have been mixed. The Buckle (BKE) reported a 0.5% decline in same-store sales for the five-week period ended April 4, 2015.

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Sporting goods, hobby, book and music stores

This category accounted for ~7.4% of total retail sales in March 2015. After posting a monthly increase of 2.6% in February, its growth rate declined to 0.2% in March. Zumiez (ZUMZ), which retails action sportswear, footwear, and equipment, reported same-store sales growth of 5.5% in the five weeks ended April 5, 2015.

The stock prices of major sporting goods retailers Foot Locker (FL) and Dick’s Sporting Goods (DKS) declined by 1.5% and 2.0%, respectively, on April 14—the day the US retail sales report for March was released.

Department stores gain

General merchandise store sales accounted for 12.5% of March retail sales. Sales for the category were up by 0.6% month-over-month and 0.3% year-over-year. The category includes sales at department stores such as Nordstrom (JWN), Dillard’s (DDS), and Macy’s (M). Same-store sales for Stein Mart (SMRT) surged in March. The off-price retailer reported 11.2% growth in same-store sales for the five-week period ended April 4, 2015.

An early Easter proves unfavorable for Costco

Costco (COST), on the other hand, which is included in the general merchandise stores category, reported flat or 0% growth in US same-store sales growth in the five weeks leading up to April 5. Excluding the impact of gasoline price deflation, US store comps rose by 4%. The retailer cited an early Easter, which reduced the year-over-year comparison by a day. Costco projects an adverse impact of 1% to 1.5% on total store comps—both domestic and international—as a result of this factor.

COST, GPS, LB, and CATO together constitute 3.9% of the SPDR S&P Retail ETF (XRT).


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