Retailers Report Strong Sales

New York, NY, April 12, 2007--Consumers inspired by warmer weather and an early Easter returned to stores and malls in March, giving many retailers better-than-expected sales. The outlook for the coming months was uncertain, however, amid rising gasoline prices and the possibility of higher interest rates, and Wal-Mart  warned that it will be a challenge to meet its earnings target.

Even Wal-Mart, which has had disappointing sales in recent months, pleased Wall Street with better-than-expected results, although it called April's selling environment "tough."

"It looks like it is going to be a strong month," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "But there is definitely a lot of uncertainty in the economy going forward."

According to Thomson Financial, of the retailers that have reported so far, 23 merchants beat estimates, while seven missed projections.

The arrival of warmer weather following an unusually cold January and February helped retailers recover from a slow start to the spring selling season. An early Easter, which occurred eight days earlier than a year ago, also helped.

However, cooler weather in recent days has slowed sales of spring clothing.

Moreover, a slowing economy, particularly a weakening housing market, could challenge shoppers in the coming months. Gasoline and oil prices rose Wednesday after the government reported a steeper-than-expected decline in gasoline inventories, and there are predictions of $3-a-gallon gasoline by summer.

Wal-Mart posted a 4 percent gain in same-store sales, above the 1.6 percent estimate from Wall Street analysts surveyed by Thomson Financial. Same-store sales, or sales at stores open at least a year, are considered the standard for measuring a retailer's health

Tom Schoewe, Wal-Mart's chief financial officer, noted that the company has estimated first-quarter earnings of 68 to 71 cents per share. But, he warned in a statement, "while the earnings guidance is still attainable, given the tough sales environment for the April period, it will be a challenge."

Costco had a 6 percent gain in same-store sales, beating the 4.7 percent estimate

Penney had a 10.6 percent gain in same-store sales in its department store business, above the 7.5 percent estimate from Wall Street.

Nordstrom Inc.'s same-store sales rose 15 percent, well above the 8.2 perent estimate.

On Wednesday, Target Corp. reported same-store sales rose 12 percent, beating the Wall Street estimate for a 11.5 percent gain.

Federated Department said March same-store rose 2.3 percent missing analysts estimates of 3.3 percent.

Dillard's posted a same-store sales increase of 6 percent topping Wall Street analysts, who expected a same-store sales decline of 0.2 percent.