Barclays on U.S. Department Stores/Broadlines: Review of February Sales

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Barclays on U.S. Department Stores/Broadlines: Review of February Sales

Barclays analyst says, "Overall, February results came in above our expectations, as the Barclays Capital Broadlines/Dept. Store Same Store Sales Index increased 5.6% versus our recently raised 4.7% estimate, compared with a 5.4% increase last year. On a two-year basis, our index increased 10.9%, the seventh sequential increase. However, the later Easter will likely break this trend in March. Most results came in at the high end or above our estimates, with only Target (NYSE: TGT) (+1.8% vs. our 2%-3% estimate) and Stage Stores (NYSE: SSI) (-7.2% vs. our 1%-3% estimate) coming in below. At Target, the home category remained challenging, declining low- to mid-single digits. The Department Stores regained their 2010 momentum as Macy's (NYSE: M) (+5.8%), Kohl's (NYSE: KSS) (+5.0%), and J.C. Penney (NYSE: JCP) (+6.4%) had solid February results, noting positive customer response to spring merchandise. The high end was also strong with Saks delivering an impressive 15.3% comp and Nordstrom (NYSE: JWN)continuing its momentum with a 7.3% comp, including a 9.6% increase at Nordstrom (formerly "multi-channel")."

"The Warehouse Clubs, which reported earnings and February sales yesterday, also had solid February results. Excluding gasoline, Costco (Nasdaq: COST)reported U.S. comps increased 4.0% and BJ's (NYSE: BJS) reported U.S. comps increased 2.4%."

"As we look to March, we are encouraged by the continued improvement over the past few months, on both a one-year and two-year basis. We also consider the impact of the calendar shift in the March-April period, as the pre-Easter period shifts into April (benefit) this year from March (detriment) last year. We expect this shift to have a meaningful negative impact on March sales, but be overall neutral to first quarter results. Overall, we expect the Barclays Capital Broadlines/Dept. Stores Same-Store Sales Index to decrease (2.1)% in March vs. an 11.3% increase last year and increase 11.3% in April vs. a 2.3% increase last year. For the combined March-April period, we expect a 3.9% increase in our Index."

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