May retail sales topped expectations, survey finds

High- and low-end stores post healthy increases

June 03, 2005|By Becky Yerak | Becky Yerak,CHICAGO TRIBUNE

CHICAGO - Denim is bringing in a lot of green for Cache Inc.

The women's clothing retailer said yesterday that sales at stores open at least a year rose 10 percent, far exceeding expectations of analysts who forecast a 3 percent rise for the New York merchant.

"Denim fashions and the bohemian peasant look are pretty prevalent," said Thomas E. Reinckens, president of Cache, where denim prices range from $88 to $278. "We do have some white denim, but different shades of blue are still pretty strong."

Nearly two-thirds of the nation's leading merchants reported better-than-expected sales for the month of May, according to a survey released yesterday by Retail Metrics LLC, of Swampscott, Mass.

The survey found that 61 percent of the 68 retailers it monitored beat expectations for May; 37 percent missed. The remainder matched forecasts.

Among the other chains giving an assist to denim for the better numbers included New York & Co., where denim sells from $26 to $45; Chico's FAS Inc., known for its more forgivingly sized women's clothing; and teen retailer Abercrombie & Fitch Co.

Other story lines for May included the continuing strong performances of luxury chains and stronger sales growth at Target Corp. than at Wal-Mart Stores Inc.

But as many retailers outpaced expectations, there are troubling signs.

Same-store sales at U.S. retailers grew 2.9 percent, less than the 3.5 percent increase year-to-date, said Michael Niemira, chief economist for the International Council of Shopping Centers in New York.

Same store sales refers to results at stores open at least a year.

Niemira, who tracks 67 retailers, called the monthly numbers "uneventful" since luxury chains and teens remain among the strongest performers.

Sales at Wal-Mart Stores Inc. rose 2.5 percent, and its stock closed up 0.6 percent.

Business at rival Target Corp. increased 5.1 percent. Its stock rose 1.5 percent.

"Star Wars toys, video games and accessories, iPods and intimate apparel, driven by Mother's Day, and ladies' apparel in general were among the strong performers," said Target spokeswoman Cathy Wright.

Teen retailers Abercrombie & Fitch, American Eagle and Wet Seal all posted higher-than-expected numbers.

Abercrombie, whose chains also include the younger-skewing Hollister chain, reported strong sales of denim, fleece, polo shirts and printed T-shirts.

Wet Seal gets the prize for being the retailer to most blow the door off of analysts' expectations; Wall Street predicted a 24 percent increase, but Wet Seal delivered a 56.9 percent rise.

Wilsons the Leather Experts Inc. posted sales growth of 11 percent, exceeding estimates for 7.2 percent growth. It cited strong sales of NASCAR-themed jackets for men and women.

On the luxury end, Neiman Marcus and Nordstrom did better than expected. But catering to the well-heeled didn't assure a good month.

Saks Inc.'s Saks Fifth Avenue luxury chain eked out a 0.8 percent sales gain, but Wall Street expected a 3.7 percent increase.

Sales at Saks' mid-level department store chains, including Carson Pirie Scott, dropped 2.6 percent, while analysts expected a 0.2 percent uptick.

Laggards also included May Department Stores Co., whose sales fell a worse-than-anticipated 2.9 percent, and Federated Department Stores Inc., whose 0.8 percent gain was less than the expected 1.6 percent.

The Chicago Tribune is a Tribune Publishing newspaper.

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