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February Business Toughs Out Pressures
February was tough for retailers. Freezing temperatures and winter weather kept shoppers inside their homes. There was a labor slowdown at ports on the West Coast, and after receiving a break from high gas prices during the fall, prices at the pump started climbing in February.
Despite the added pressures, February business was not bad, said Adrienne Yih-Tennant, a high-profile retail analyst who works for Janney Capital. Retailers faced added economic pressures by keeping inventories light this month, she wrote in the first of two retail notes that she released on March 5. She also noted that consumers want to shop.
In her second March 5 research note, she said most of the retailers that she tracked posted sales above Wall Street’s expectations. “This suggests to us that consumers are in the mood to spend on apparel and bodes well for the core of the spring selling season in March/April,” she wrote.
Gap Inc. reported a 4 percent decline in its February same-store sales. It reported net sales of $918 million during the month, but it missed its expectations, said Ken Perkins, founder of market-research company Retail Metrics. He forecast that Gap Inc. was going to post an increase of 1.3 percent during February. In a March 5 newsletter, he stated that Gap Inc. posted negative monthly same-store sales in three of its last five quarters.
Sabrina Simmons, Gap Inc.’s chief financial officer, placed responsibility for the decline on typical business during February. “Recognizing that February is a relatively small sales month, we’re focused on the spring shopping months ahead and delivering on our full-year goals,” Simmons said.
Zumiez Inc., the action-sports retailer, reported a 6.9 percent increase in its same-store sales for February. Its net sales increased 11.6 percent to $ 54.0 million.
“February same-store sales well-exceeded expectations,” said Dave King, a retail analyst for Roth Capital Partners, wrote of Zumiez in a March 4 research note. “Overall sales also exceeded projections but were pressured somewhat by foreign exchange. Zumiez seems to be gaining market share amidst an improving teen retail backdrop, though we attribute part of the outperformance to a larger relative men’s offering.”
