After a sluggish holiday season, retail business seemed to be picking up in second half of February. One bright note in a disappointing retail landscape this morning: it looks like traffic did turn around a bit in the second half of last month, with L Brands, Cato, Zumiez all said sales had improved a bit in the second half of February.
L Brands said business improved around Valentine's Day; separately, Cato said sales "were negatively impacted by winter storms the first two weeks of the month. However, that impact was offset by strong selling in the last two weeks of the month driven by warmer weather and tax refund spending."
In the words of Zumiez CEO Rick Brooks: "Sales trends improved for the month driven in part by increased traffic as we cleared excess inventory carried over from the holiday season."
Otherwise, retail was a disappointment. Costco misses. Children's Place saw a sales miss on a highly promotional environment. Staples misses on revenue and will close 200 stores by the end of the year.
The company tried to put the best spin on grim news. "With nearly half of our sales generated online today, we're meeting the changing needs of business customers and taking aggressive action to reduce costs and improve efficiency," said Staples CEO Ron Sargent.
The key theme here is ongoing margin pressure. Costco is seeing margin pressure during the holiday season, because they had to compete with the likes of Wal-Mart and others. Same store sales numbers for the 20 or so companies that still report were up 2.6 percent, roughly in line with expectations, according to RetailMetrics.
One things for sure: promotions will pick up if the cold weather continues. Walk the malls, because spring (and even summer) merchandise is already out. You can see patio furniture at BJ's. Shorts and t-shirts and bathing suits are all over the place.