Costco Same-Store Sales Top Estimate

Elena
10 May, 2007
New York City

The majority of them reported robust March same-store sales due largely to an early Easter, tipping off investors that their April sales would come below expectations. Among the first to report April same-store sales, Costco Wholesale posted a 7% increase, Claire

[R]8:15AM Retailers posted weaker-than-expected April sales.[/R]
Retailers attracted attention early Thursday with the release of April sales figures. The majority of them reported robust March same-store sales due largely to an early Easter, tipping off investors that their April sales would come below expectations. Among the first to report April same-store sales were Costco Wholesale, Claire’s Stores, Mothers Work, and Chico FAS.

Costco Wholesale ((COST)) posted 7% increase in its same-store sales in April, beating expectations of 6.3% growth. Costco said it benefited from one extra day of sales, which resulted in a 2% lift. In the four weeks to May 6, total sales rose 12% to $4.94 billion. Wal-Mart ((WMT)) posted a 3.5% decline in same-store sales, well below estimates of a 1.1% decrease. The world's biggest retailer said it expects May same-store sales to rise 1% to 2%.

Claire''s Stores, Inc. ((CLE)) said its April same-store sales fell 6%, missing estimates of same-store sales drop of 2%. Total sales for the four-week period rose 1% to $105 million.

Maternity clothing retailer Mothers Work ((MWRK)) said its April sales at stores open at least one year dropped 14.8%, missing analyst expectations of a decline by 12%. The retailer attributed the decline to the earlier timing of Easter. Total sales for the period slipped 9.9% to $52.3 million.

Gap ((GPS)) said its April same-store sales tumbled 16%, down from expectations of a decline of 7.1%. Total sales fell 11% in the period to $1.09 billion from $1.23 billion. Chico FAS Inc. ((CHS)) reported comparable sales drop of 7.3%, compared to the estimate for a loss of 0.6%. Total sales increased 9.8% to $148.7 million from $135.5 million.

J. C. Penney Company, Inc. ((JCP)) said its comparable department store sales fell 4.7%, compared to the initial guidance to be flat. Total department store sales decreased 2.7%. Limited Brands Inc. ((LTD)) said same-store sales slipped 1% in April, slightly below expectations of 0.6% decline. Total sales rose to $688 million from $653.2 million a year earlier.

Federated Department Stores ((FD)) posted same-store sales decline of 2.2%, missing its forecast for an increase of 2.5% to 4%. Analysts had been expecting a rise of 1.7%. Total sales dropped 2.1% to $1.84 billion.


[R]6:30AM European markets were little changed Thursday ahead of important rate decisions.[/R]

The U.K. FTSE 100 index edged down 0.1% at 6,545.80, the German DAX Xetra 30 index was up 0.1% at 7,483.90 and the French CAC-40 index traded 0.1% lower at 6,045.08. National benchmarks decreased in all of the 17 western European markets that were open except Denmark, Greece and Luxembourg.

Economic news

The Bank of England is expected to hike rates by a quarter point to 5.5% in an attempt to curb inflation, while the European Central Bank is expected to keep rates on hold at 3.75% while at the same time hinting at a June rate increase.

Advancers

Hammerson shares rallied 8.6% after reports that New York-based buyout firm Kohlberg Kravis Roberts & Co. and Vornado Realty Trust may bid for the U.K. owner of malls and offices.

Premiere shares advanced 2.6% after it reversed to a profit of 4.5 million euros in the first quarter of the year. Last year, it posted a loss of 18.3 million euros.

BMW climbed 2.6% after Goldman, Sachs & Co. added the shares of the world biggest luxury carmaker to its conviction buy list and lifted its price estimate.

Decliners

French bank Societe Generale plunged 2.5% after its first-quarter profit dropped 2% to 1.43 billion euros on a decline in retail and corporate and investment banking performance, a drop in equity portfolio income and the negative impact from marking-to-market interest rate swaps.

Rio Tinto, mining company, lost 2.4%. BHP Billiton, the world biggest mining company, declined 2.6%. E.ON dropped 1.1% and RWE declined 1.3 %.

Commodities

Crude oil was little changed on concern that supplies will be further disrupted in Nigeria. Crude oil for June delivery slipped to $61.45 a barrel in after-hours trading on the New York Mercantile Exchange. Brent crude oil for June settlement gained 42 cents, or 0.6%, to $65.62 a barrel in electronic trading on the ICE Futures exchange.

Gold and silver were virtually unchanged as the reopening of Newmont Mining Corp. Yanacocha gold mine in Peru reduced concern over supply. Gold for immediate delivery fell $1.10, or 0.2%, to $679.45 an ounce and silver for immediate delivery declined as much as 2 cents, or 0.2%, to $13.34 an ounce.

Currencies

The euro advanced slightly against the U.S. dollar on Thursday ahead of a meeting by the European Central Bank that is expected to see interest rates left unchanged at 3.75%. The euro bought $1.3541 in morning European trading, compared with the $1.3529 it bought in New York late Wednesday. The British pound slipped to $1.9904 from $1.9941 and traded at $1.9962 during Thursday session. The dollar rose to 120.27 Japanese yen from 120.02 yen the night before.