Late Easter may have nipped sales in the bud


April 10, 1992|By Michael Dresser | Michael Dresser,Staff Writer

A late Easter and a cold March brought a parade of chilly sales reports from the nation's major retailers yesterday, but analysts discounted last month's figures as potentially misleading.

Clothing store chains posted especially discouraging numbers. The Gap, a perennial high-flier, skidded to a 3 percent sales decline at stores that were also open a year ago. By that same closely watched indicator -- comparable-store sales -- The Limited was down 8 percent and Joppa-based Merry-Go-Round was down 12 percent.

Department store numbers were only slightly better. St. Louis-based May Department Stores showed a 4.7 percent drop in comparable store sales, while Neiman Marcus recorded a 4.6 percent decline.

Even discounters, which have prospered amid the recession as consumers became obsessed with bargains, showed lackluster results. Kmart, the nation's No. 2 retailer, was off 0.7 percent in comparable-store sales. No. 1 Wal-Mart, which routinely racks up double-digit gains, was up only 6 percent.

The analysts' reaction: So what? To them, drawing a conclusion about the state of the economy from the March figures alone was like forecasting World Series based on spring training results. "You have to take it with a whole shaker of salt, not a few grains," said Guy W. Ford, vice president of Richmond-based Scott & Stringfellow.

Last year, Easter came early; this year it comes late -- presumably pushing sales of spring outfits into April. If March is cold, as it was this year over much of the country, consumers put off purchases of swimsuits and garden tools. And the Persian Gulf war, which was still distorting the retail market last spring, continues to be a wild card affecting comparisons.

The flip side of March's negative distortion is that April's figures could be just as misleading in the other direction.

"You really have to look at March-April combined to get a sense of what's going on," said Paul Bienstock, an analyst at Moran & Associates in Greenwich, Conn.

Christopher Vroom, a retail analyst with Alex. Brown & Sons, agreed that the March figures were of limited value, but he did find some clues in the numbers he had seen.

Value-oriented "power" retailers such as Home Depot and Staples "generated pretty strong results," Mr. Vroom said. The results from more traditional retailers were "modestly below what we were looking for. . . . We still sense that it's a tough retail environment," Mr. Vroom said.

According to a composite index of 11 major retailers' comparable-store sales compiled by Dean Witter Reynolds Inc., chain-store sales rose a modest 1.3 percent last month compared with March 1991. That pace is considerably slower that the gains registered in January and February, which were each up 8 percent.

There was at least one notable success story among the nation's largest chains, however. Dallas-based J. C. Penney, the nation's fourth-largest retailer, posted a comparable-store gain of 9.5 percent. Company spokesman Duncan Muir attributed the gains lower prices and promotions surrounding the company's 90th anniversary.

The two major Maryland-based retailers that reported yesterday showed opposite results. Hechinger Corp., the Landover-based home improvement chain, posted a 3 percent gain in comparable-store sales in March, despite cold weather that hurt sales of lawn and garden items.

Merry-Go-Round's 12 percent decline in March continued a brutal string of comparable-store declines in every month since December. The youth-oriented chain, which has been hurt by a shift in fashion toward basic denim clothing, has been facing difficult comparisons because its business was booming last winter and spring.

Still, Mr. Bienstock said, there was a glimmer of hope that Merry-Go-Round's slide might be ending. He said company executives told analysts that although sales were down in early March, the last week of the reporting period that ended April 4 was up 5 percent. Sales were even up at the company's troubled Cignal division, he said. "I think we're starting to see the turn come," Mr. Bienstock said.

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