Rising Sales Add Up to Robust Start for Retail in 2012

By Adam Blair
The old song says to "Accentuate the positive" and "eliminate the negative." In March, for the first time in many months, retailers were actually able to follow this advice.

Among retailers that report monthly sales figures, virtually all showed increases in their same-store sales in March. Only one retailer, Wet Seal, had a same-store sales decrease that was larger than a fraction of a percentage point, at 7.8%.

Compare these results to January 2012, when RIS News' list of "Bottom 5" performers ranged from Wet Seal's 13% drop in same-store sales to a 3.5% decrease for Bon-Ton Stores. As a group, the Bottom 5 showed stronger performances in December 2011, with negative same-store sales ranging from only 3.7% for Wet Seal to a negligible drop of 0.3% for Duckwall-Alco.

There were other indications that March's rising tide was lifting all boats. The 20 retailers tracked by the Thompson Reuters retail composite index showed a 4.3% increase in same-store sales, better than the 3.5% analysts had expected. The International Council of Shopping Center's tally of 22 major retailers showed a 4.1% gain, matching the pace set in February.

While a single month's data isn't enough to indicate a complete rebound for retail, there are a number of indicators pointing to strong performance for the industry in 2012. March's "overall results were quite strong with Macy's, Target, Gap, Ross Stores and TJX really standing out from the crowd," according to analyst J. Philip Leichliter of J. Philip Group LLC.

"I believe this is a great signal that retailers will be taking a look at their plans for purchase for the entire balance of the year, especially the holiday period," Leichliter added. "Current plans have been rather conservative, however [retailers] don't want to get caught short and miss sales in the fourth quarter. All of the great work most retailers have done at controlling inventories and turn, as well as limiting discounted selling is now paying off, and you will see increasing profits and more bullish views of the next quarter."

Discussing the apparel sector, Deutsche Bank retail analyst Dave Weiner said "I believe that the industry is benefiting for the first time in many seasons from a trifecta of relatively clean inventories, seasonal demand, and decent full-price selling."

Following are the top retailers by same-store sales increases in March. Seven companies are listed due to ties in second and fourth place:

Zumiez                        14.1%
Ross Stores                 10%
TJX                             10%
Nordstrom                   8.6%
Gap                             8%
Limited Brands           8%
Target                          7.3%

For related content: Top 5 Winners and Losers of Q4

Top 5 and Bottom 5 Retailers in January

Top 5 and Bottom 5 Retailers in December