Retailers report smaller sales declines in April

Consumers enticed by warmer weather and glimmers of hope for the economy bought a few more items in April, helping to lift sales results at established stores. Business remains weak, however, and many analysts expect a drawn-out recovery as layoffs keep increasing and other economic woes persist. Among the merchants that reported sales results Thursday, a number of mall-based clothing stores including Stage Stores Inc. and Wet Seal Inc. posted smaller declines than analysts had expected. The Children's Place Retail Stores Inc. and The Buckle Inc. even reported gains that were better than forecast. But warehouse store operator Costco Wholesale Corp. reported a deeper-than-expected same-store sales drop, hurt by the closing of its stores on Easter. Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones. "It looks as though the rate of decline is diminishing," said Ken Perkins, president of research firm RetailMetrics LLC. "There were a number of factors putting more money into people's pockets, but the macro headwinds are still significant." Retailers' business was helped by warmer weather, tax refunds, and a shift in the Easter holiday from mid-March last year to April this year. That shift hurt business in March but helped boost April results. Signs of an improving an economy — a stock market rally and better news about the housing market — have helped improve shoppers' confidence. Sentiment levels are still hovering near historic lows, however, as shoppers worry about job security, available credit and their shrunken retirement funds. Costco said its April same-store sales dropped 8 percent, more than the 6.8 drop that analysts surveyed by Thomson Reuters expected. Excluding lower gas prices and the stronger dollar, same-store sales were flat. But clothing stores that focus on teen customers did better. Wet Seal Inc. reported a 2.2 percent decline, much smaller than the 7 percent drop analysts had expected. The Buckle enjoyed an 18.2 percent gain in April, beating estimates for a 10.6 percent rise. Stage Stores posted a 1.5 percent decline, better than the 7 percent drop projected. The Children's Place had a 5 percent gain when expectations had been for sales to be flat.