Weather helps U.S. store sales; even Gap (NYSE: GPS) up

Orlando, FL 3/1/12 (StreetBeat) – Mild weather helped spur consumers to buy spring clothing in February, leading to broad sales gains at top U.S. chains, and even perennial laggard Gap Inc (NYSE: GPS) posted its first increase in eight months.

Top retailers such as discounter Target Corp, department store chain Macy's Inc and Victoria's Secret parent Limited Brands Inc reported same-store sales gains for February that handily beat Wall Street forecasts.

Gap same-store sales rose 4 percent, while analysts on average expected a 1.4 percent decline, according to Thomson Reuters data. Shares of the company, which benefited from a 12 percent jump at its Banana Republic chain, rose 9.9 percent in premarket trading.

Target, whose February same-store sales rose 7 percent last month, and Macy's, which reported a 4.6 percent gain, each forecast more increases for March.

But with gas prices on the rise, retailers cannot bank on more of the same-broad based gains in the coming months, and should instead gird themselves for an intense fight for shoppers, an analyst said.

"Retail is in a share-taking environment," said Joel Bines, managing director of consulting firm AlixPartners. "Shoppers will end up consolidating trips."

That could mean extra pressure on struggling retailers, especially those that don't offer enough merchandise to allow shoppers to buy items at one place.

As of Thursday, a gallon of gas in the United States cost $3.74, up 35 cents from a year ago, according to the American Automobile Association.

For now, some positive signs in the economy have trumped rising gasoline prices. The housing market appears to be stabilizing, and the unemployment rate fell to 8.3 percent in January from 9.1 percent in August. The University of Michigan's consumer confidence survey rose for the sixth straight month in February.

And the surging stock market, which this week hit its highest levels since May 2008, has been a boon for upscale chains like Saks Inc and Nordstrom Inc in recent months.

February sales at both chains breezed past Wall Street forecasts. Nordstrom's same-store sales rose 10.2 percent.

Other retailers that beat analysts' estimates on Thursday include off-price TJX Cos Inc, where same-store sales were up 9 percent, as well as teen-oriented The Buckle Inc and Zumiez Inc.

"We believe that very favorable weather patterns during the month helped boost demand for spring apparel," TJX Chief Executive Officer Carol Meyrowitz said in a statement.

It remains to be seen whether the boon to February will mean consumers have already completed their spring wardrobes, putting put pressure on March and April results. TJX, for example, forecast only a 1 percent to 3 percent increase for March and April same-store sales, combined.

Limited, which also owns Bath & Body Works, said on Thursday that sales at stores open at least a year rose 8 percent last month, above the analysts' average forecast of 6.2 percent.

On Wednesday, Costco Wholesale Corp said its same-store sales had risen 8 percent in February, outpacing the 7.6 percent increase that analysts expected, according to Thomson Reuters data. Much of the warehouse club chain's gains in the past year have come from shoppers seeking cheaper gasoline.

Wet Seal was one of the few chains to report a decline in sales, but the fall of 5.8 percent was less steep than expected. Fred's Inc reported an unexpected drop in sales.

Home decoration and furniture chain Pier 1 Imports Inc said its same-store sales for the full holiday quarter had risen 10.3 percent.

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Children's Place Sees Strong Holiday Quarter, Shares +14%

Orlando, FL 11/17/11 (StreetBeat) --Children's Place Retail Stores Inc (Nasdaq: PLCE) is eyeing a strong end to the year as it expects to keep a tight leash on its merchandise, helping it ride through a highly promotional holiday season with improved margins.

Shares of the company were up more than 14 percent at $51.46 on Thursday, recovering their losses since May when it had forecast a weak second quarter.

Children's Place, which competes with chains like Target Corp (NYSE: TGT) and Gap Inc's (NYSE: GPS) Old Navy, caters to households with a median annual dual income of about $70,000 -- or people who are still leaning on deals and discounts for their shopping.

"We have a stronger promotional strategy in place for fourth quarter versus last year," Chief Executive Jane Elfers said on a conference call with analysts. In the past, the company has made inventory and merchandise missteps that had often led the retailer to discount heavily at the end of each season to get rid of unsold merchandise, hurting margins. Elfers, who took charge of the company last year, has been working to correct those issues with revamped styles in clothes and deals. The company recently appointed former Pepsico Inc (NYSE: PEP) official Lori Tauber Marcus as its marketing chief.

"Barring a material weakening of the economy, we firmly believe that the significant progress we have made ... will result in positive comp sales growth, continued gross margin expansion and operating margin expansion in fiscal 2012," she said.

For the third quarter ended October 29, which takes into account sales during the back-to-school-season, the kids' clothes retailer saw gross margins expanding 110 basis points to 41.3 percent, and expects them to grow 30-50 basis points in the fiscal year.

Margins were helped by higher prices on products, but CEO Eflers said even with the new price tags, Children's Place is priced notably below the mall-based competition by about 30 percent, and in line with other value retailers.

The Secaucus, New Jersey-based company also expects to earn more than its earlier forecast this fiscal year.

For the third quarter, the company earned $33.7 million, or $1.33 a share, topping analyst estimates, according to Thomson Reuters I/B/E/S. Sales rose 7 percent to $484.1 million.

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