The nation's leading retailers reported mixed sales for April, and financial analysts said Thursday that the continued high level of consumer debt is still putting a damper on sales.
Stores are not benefiting yet from the lower mortgage rates and cheaper gasoline prices that have put more money in consumers' pockets, but those trends should encourage more spending later in the year, analysts said.
Sears, Roebuck & Co., the nation's largest retailer, said its sales for the four weeks ended May 3 rose 1.9% from the same period a year ago. K mart, ranked second, recorded a 2.8% gain.
Sears Chairman Edward Brennan said relatively strong sales increases were reported in home fashions and appliances last month.
Sales were up 7.8% at No. 3 J. C. Penney and 8.8% at No. 4 Dayton Hudson, which owns the Target and Mervyn's chains.
Wal-Mart Stores, the fast-growing discount chain and the nation's fifth-largest retailer, said its sales spurted 39%.
Carter Hawley Hale Stores of Los Angeles, parent of the Broadway and Neiman-Marcus chains, reported that its sales rose 4.4%--aided by a 12.6% jump by its specialty stores. Chairman and Chief Executive Philip M. Hawley said April was marked by a "modest" increase in sales of items for the home, particularly furniture and housewares.
"For another month in a row, I've got to say sales were mixed," said Jeffrey Edelman, an analyst with the investment firm of Dean Witter Reynolds. "Even if adjusted for the calendar change and unseasonable (warm) weather in the Midwest and Northeast, sales are still on the soft side."
Because Easter fell earlier this year, retailers and analysts had said that only a look at the combined March-April period would give a true reading of spring business.
Bernard K. Fauber, K mart's chairman, said the company was pleased with its combined March-April business, which he called in line with projections. March sales were up 8.2%.
Jeffrey Feiner, an analyst with Merrill Lynch, said: "When you put the numbers combined for two months, (they) were still sluggish and still below managements' budget levels.
"Despite lower gasoline prices and the benefits from refinancing of homes, continued high installment-debt levels have impinged spending at the retail store level," Feiner said.
However, those two positive factors could give retailers a boost in the second half of the year, Feiner said.
Edelman, agreeing that lower mortgage rates and cheaper gas should help retailers later, also said the companies should benefit from a slowdown in car buying.
In the meantime, not only are retailers' sales trends mixed but their first-quarter profits will be, too, Feiner said. Retailers generally operate on a fiscal year that begins in February.
Federated Department Stores, based in Cincinnati, said its latest sales, excluding supermarkets, increased 3.6%. F. W. Woolworth of New York reported an 8.8% gain for the month.
May Department Stores of St. Louis said its four-week sales jumped 11.8%, while Montgomery Ward, No. 9, had a 1.8% decline in April.
MAJOR RETAILERS' SALES IN APRIL
In millions Year % of dollars 1986 ago change Sears 2,142 2,101 +1.9 K mart 1,780 1,730 +2.8 J.C. Penney 903 838 +7.8 Federated* 583 563 +3.6 Dayton Hudson 607 558 +8.8 Wal-Mart Stores 874 628 +39.0 Woolworth 464 426 +8.8 Montgomery Ward 282 290 -1.8 May Dept. Stores 389 348 +11.8 Assoc. Dry Goods 317 298 +6.6 Carter Hawley Hale 292 279 +4.4
*Excludes supermarket sales. Excludes foreign sales.