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With sales day becoming less relevant due to fewer companies reporting, there are still a handful callouts from today’s reports.  Overall, 16 of 22 (73%) companies reported better than expected results while just six fell shy of Street expectations.  Valentine’s Day was a success, which certainly puts some pause in questioning the propensity of the consumer to shop for purely discretionary goods.  Februrary marks the second month a row of accelerating results on one, two, and three year basis.  Despite the noteworthy strength, it’s important to realize that the bulk of the first quarter’s volume is still very back half weighted due to this year’s three week Easter shift.  As a reminder, most retailers will be reporting negative comps in March followed by sharply positive results in April (based solely on the calendar). 

As always, here the notable callouts from February sales results:

  • ROST noted that pack-a-way now stands at 47%, up a full 14% year over year.  Given the fact that costs are on the rise, especially for fall ’11, we suspect the increased pack-a-way will provide nice margin cushion this fall.
  • Almost every retailer noted that momentum throughout month improved each week, with the final week showing the greatest year over year growth.
  • Apparel was the clear standout for the month, with early positive momentum in spring sell-throughs.  Hardlines, especially electronics and media, remained relatively weak for the month.
  • Kohl’s noted strength across all categories during the month, with men’s, women’s, kid’s, footwear, and home all posting positive comps. 
  • For those focused on comparisons, JWN reported its 18th month in a row of increased transaction counts.  Average ticket also increased for the month.
  • Just days after JCP provided guidance for e-commerce sales to increase by low double digits for the year, the company reported its strongest monthly increase of 11.8% in a long time.  Clearly the near term data has given management confidence given the .com has not sustained double digit increase at any point over the past few years.
  • TGT fell short of Street expectations for the third month in a row with the reporting of 1.8% comp increase.  While the result is “in line” with management’s expectation, it still appears light relative to the incremental 200-400bps of comp expected from the company’s P-Fresh and 5% rewards program.
  • TGT will have one of the more pronounced Easter shifts, with same store sales planned down mid to high single digits in March followed by a mid-teens increase in April.  Overall results for the quarter are expected to increase low single digits as per management’s current view.
  • Gap downplayed its disappointing negative 3% comp by saying, “February is a relatively small month and we remain focused on our full-year goals”. 
  • The northeast and mid-atlantic were often cited as the best performing regions for most retailers.  Upon further digging, it should be noted that these regions were impacted by major snowfall last year, making comparisons very easy.
  • LTD noted a strong response to the company’s Valentine’s Day gifting assortment, which helped to drive a 15% increase in comp store sales. 
  • Macy’s reported a 30.9% increase in online sales, which marks an acceleration from prior months.

 Cupid Shoots 73% - SSS1

Eric Levine