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Chain-Store Sales Expected to Decline 0.7% for March

As retailers gear up to report monthly same-store sales Thursday, analysts are expecting March to be a challenging month with the late arrival of Easter and rising gas prices.

Woman shopping for clothes
Yuri Arcurs | Photographer's Choice RF | Getty Images
Woman shopping for clothes

On average, analysts are expecting March sales at stores open for at least a year to post a 0.7 percent decline, compared to March 2010's 9 percent growth, according to the Same Store Sales Index from Thomson Reuters.

"The sentiment seems to be sour because of the calendar shift," Brian Sozzi, analyst at Wall Street Strategies. "I wouldn't be surprised if there was an upside in March," he added.

Sozzi expects that if there's an upside in March, it will be because of spring break.

"I typically look to spring break as the unofficial start and Easter as the start to spring," he said.

Still, much of the market chatter is likely to be about the late Easter as well as rising gasoline prices.

With Easter arriving later (April 24), April is expected to reap the retail spending March would normally experience, according to MasterCard Advisors’ SpendingPulse.

Retailers are also expected to talk about higher gasoline prices. However, Sozzi expects retailers might not feel the effect of gas prices until April.

"April is teed up potentially for disappointment with the lagging effect from higher gasoline prices," he said.

Weaker consumer confidence and cold weather could be other factors retailers point to, he added.

"Retailers reporting will use the excuse of weather," Sozzi said. "The consumer was out a little bit and more many retailers it was the last week of the month so that will help make March not as bad as many expected."

Looking ahead, Sozzi says he's expecting Costco to do well despite being the store being closed on Easter. He also noted teen retailer Zumiez for maintaining strong traffic and momentum behind the brand. Sozzi also picked Hot Topic because of compelling products such as the Charlie Sheen t-shirts and new album releases.

On Thursday investors will get a better picture of how many of the individual retailers fared during March when they issue their monthly same store sales reports.

According to data from Thomson Reuters, the discount store sector is expected to post the strongest results in March. Warehouse club Costco is seen reporting same-store sales growth of 5.5 percent, excluding gasoline sales. BJ's Wholesale is expected to post results of 0.5 percent, excluding gasoline sales. Meanwhile, Target's same store sales results are expected to decline 6.4 percent.

In the department store category, the high-end retailers such as Saksand JW Nordstrom are expected to report the strongest results.

Apparel retailers across the board are seen posting weaker results. On the flipside, Limited is seen on top with 1.5 percent same store sales estimates because of its Victoria Secret sales.

Below is a list of what analysts are expected for March same-store sales estimates.

March 2011 Same-Store Sales Estimates

Retailers
March 2011 Estimates
March 2010 Actuals
Costco 5.5% 5.0%
BJ's Wholesale 0.5% 7.3%
Target (6.4%) 10.3%
JC Penney (3.4%) 5.4%
Kohl's Department Store (7.9%) 22.5%
Dillards Department Store breakeven 9.0%
JW Nordstrom 0.7% 16.8%
Saks Department Store 0.8% 12.7%
Stage Stores (6.5%) 8.6%
Macy's (2.0%) 10.8%
Gap (7%) 11.0%
TJX (2.0%) 12.0%
Limited 1.5% 15.0%
Ross Stores (1.4%) 14.0%
Stein Mart (1.5%) 1%
Hot Topic (6.2%) (7.5%)
Wet Seal (1.7%) 6.3%
The Buckle (0.5%) 7.2%
Zumiez 4.1% 13.2%
Walgreen 1.9% 2.3%
Rite Aid -- (0.1%)
Source: Thomson Reuters; Figures in parenthesis are losses.

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