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Retail Sales Experience Warming Trend in May

June 02, 1995|From Associated Press

The nation's leading retailers reported Thursday that sales perked up somewhat as warmer weather returned in May, but store owners and industry analysts are cautious about the outlook for business in the coming months.

Some apparel retailers said sales of women's clothing, which have been disappointing for several years, showed signs of picking up.

But business was still choppy at many stores. Melville Corp. said its results reflect continued weakness in apparel sales at its Marshalls chain.

Terence McEvoy, an analyst with Janney Montgomery Scott Inc., said sales "started out sluggish and got better as it got warmer."

"We're keeping our fingers crossed," he said.

The improvement last month followed a disappointing first quarter and, for apparel retailers, a disappointing Christmas as well. But analysts cautioned against reading anything significant into the results. Consumers have been cutting back on purchases in response to the slowing economy and are not likely to go on any shopping sprees.

Still, May sales were gratifying for some retailers.

Business was better than expected at Federated Department Stores Inc., Chairman Allen Questrom said. However, the results could "represent a recovering 'bounce' from the first quarter's disappointing sales performance," he said.

Questrom said Federated's apparel sales strengthened modestly.

Salomon Bros.' retail index, the investment firm's barometer of sales performance, rose 4.2% after a 7% gain in April and a 0.3% decline in March. In May, 1994, the index rose 2.4%.

Wal-Mart Stores Inc., the nation's largest retailer, said sales from stores open at least a year, or "same-store sales," rose 5.6% from last May, while total sales were up 13.8%.

Same-store sales are considered the most accurate measure of a retailer's strength because they exclude the results of newer stores, where sales tend to be unusually high. Same-store sales also exclude results from stores closed over the past year.

Sears, Roebuck & Co. said same-store sales rose 3.5% and that overall sales were up 4.7%.

Kmart Corp. said same-store sales rose 4.3% and that overall business was up 5.6%.

Dayton Hudson Corp., owner of Target discount stores, Mervyn's clothing stores and three department store chains, said same-store sales rose 4.9% and overall business was up 10.6%.

J.C. Penney Co. said same-store sales at its flagship stores rose 4%, while total sales, including its drugstore and catalogue operations, rose 5.7%.

Broadway Stores Inc. reported that its total sales increased 6.6% and that same-store sales rose 2.1%.

Federated said its same-store sales rose 7% and that overall business rose 94.5%. The overall sales increase reflects Federated's acquisition of R.H. Macy & Co. in December.

May Department Stores Co. reported a 3.2% gain in same-store sales and a 9.1% overall increase.

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