CNBC's Brennan: Early Easter Likely to Boost Retailers' March Sales
An early Easter is expected to boost retailers' March sales this year but could cut into April results, CNBC's Margaret Brennan reports.
Consumers are expected to spend $14 billion on holiday-related items and spring apparel this year, or an average $135 per person, which is up 11% from a year earlier, according to the National Retail Federation.
Spring Break is also helping. With the Easter holiday falling sooner on the calendar this year, school vacations are also earlier. Those events are bringing out recreational shoppers and generating sales of full-priced spring and summer weather apparel. Brennan says.
Buying that usually happens in April happened in March this year. The International Council of Shopping Centers reports that year over year, March sales of apparel and accessories sales picked up.
“March is going to be the biggest month in the quarter from a volume standpoint because of the shift earlier,” according to CIBC’s Retail Director Dorothy Lakner.
CIBC is bullish on the teen sector in particular retailers like Zumiez and American Eagle. Lakner is also betting that parents shop at children’s retailers like Gymboree (CIBC is overweight the stock) in order to buy their kids new Easter outfits and family vacation garb.
Shoppers between the ages of 25-34 will spend the most money at $147 each. That demographic will spend $3 per person more than buyers in the 45-54 year old group. Wall Street will find out just where that money was spent when retailers report same-store sales next week.
Citigroup analyst Deborah Weinswig expects the strongest comparative same-store sales will come from high-end retailers.
“Saks will lead the charge we’re expecting a 10-12% same store sales figure out of them,” says Weinswig.
Weinswig says that across the board, the retailers she follows are seeing stronger sales than expected thanks to the earlier Easter and Spring breaks. She also says that the fashion cycle shift in terms of color and style is also fueling apparel sales.
So far Weinswig says the cracks in the subprime mortgage market and fluctuations in gas prices have not slowed traffic or sales at apparel retailers.
But what is good news for March thanks to Easter, will come at a loss of sales for April.
“Retailers could see big disparities between the guidance for March and April’s guidance,” Weisenweig said. Despite March’s strength, Weisenweig expects to see a selloff in retail stocks next Thursday when retailers report same store sales.
“Retailers will be very conservative in guidance fo the month of April.” she said.