Weather becomes the Estimation of U.S. Retail on February Sales

Sales at U.S. retailers in February rose at their smallest pace in 11 months after colder weather damped demand for spring merchandise.

Wal-Mart Stores Inc., the world's biggest retailer, said sales at stores open at least 12 months rose 0.9 percent, less than the company's forecast of 1 percent to 2 percent. Sales at Costco Wholesale Corp., the largest U.S. wholesale club; and Federated Department Stores Inc. trailed analysts' estimates.

Total U.S. same-store sales rose 2.4 percent, the smallest gain since March 2006, the International Council of Shopping Centers said based on results from 51 retailers. The coldest February since 1979 hurt demand for shorts, dresses and spring merchandise, while a snowy Valentine's Day in the U.S. Northeast kept some shoppers home.

``We hate to hear weather as an excuse, but I think it was pretty legitimate this month,'' said Lori Wachs, who helps manage $100 billion at Philadelphia-based Delaware Investments, including retail shares. Retailers ``are going to have a lot of ground to make up in March.''

New York had its sixth coldest February since 1949, while Chicago had its fourth coldest February in 78 years, according to weather consulting firm Planalytics Inc., which is based in Wayne, Pennsylvania.

Wal-Mart shares dropped 51 cents, or 1.1 percent, to $47.42 as of 9:48 a.m. in New York Stock Exchange composite trading. Costco fell 42 cents to $55.70 and Federated shares rose 29 cents to $44.09.

ICSC Forecast

ICSC had expected February sales to rise 2.5 percent to 3 percent. ICSC's chief economist Michael Niemira said sales will gain 3 percent this year, the slowest annual pace in at least three years.

``We had a weather impact that's certainly affected the pace,'' he said. ``Weather hurt a lot of apparel retailers.''

February is the second smallest sales month of the year, representing about 6.2 percent of total, Niemira said. January is the smallest sales month. Retailers typically clear out their winter stock of coats and sweaters in January and by February have outfitted stores with spring merchandise.

Costco sales rose 4 percent, compared with an estimate for a 5.1 percent gain. Federated sales advanced 1.2 percent, compared with an expected increase of 2.6 percent.

Gap Inc., the largest U.S. apparel chain, said sales dropped 4 percent. Analysts estimated a decline of 4.7 percent. Limited Brands Inc. sales rose 3 percent, missing estimates for a 3.7 percent increase after Valentine's Day weather hurt sales at Victoria's Secret and Bath & Body Works.

Slowest Since 2003

Retail sales growth in the week ended March 3 was the slowest since July 2003 due to the cold weather, the ICSC, which is based in New York, said earlier this week.

Two major U.S. blizzards, one in New York and one in the Midwest, increased February's snowfall totals 60 percent more than last year, according to the Bethlehem, Pennsylvania-based Weather Trends International.

Both teen and specialty apparel retailers' sales growth last month trailed those of department stores and discounters, according to Swampscott, Massachusetts-based Retail Metrics LLC.

Luxury department stores exceeded estimates. Seattle-based Nordstrom Inc. said comparable sales surged 9.1 percent, beating analysts' forecast for a 5.7 percent increase. Saks Inc. based in Birmingham, Alabama, yesterday said its sales soared 25 percent, more than triple what analysts estimated. Neiman Marcus Group Inc., based in Dallas, said sales gained 6.7 percent.

source:www.bloomberg.com