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Recently, the Conference Board’s consumer confidence index increased in February to 70.8, its highest level in a year and up from 61.5 in January. Despite high unemployment rates and record rising gasoline prices, Americans appear more upbeat. As a result, several retailers are reporting strong sales numbers for February.
Based on 18 major retailers, same-store sales at locations open more than a year increased 6.4 percent in February, beating estimates of 4.8 percent. In comparison, last year’s increase was 4.7 percent. The extended Presidents Day weekend and Valentine’s Day paired with warmer weather was given credit for the increase. “It is easier to consider purchasing tanks and dresses when it is snowless and 50 degrees out,” said Howard Tubin, retail analyst at RBC Capital Markets.
Target Corp. (NYSE:TGT) and Costco Wholesale Corp. (NASDAQ:COST) both reported single digit same-store sales growth. Target sales grew 7 percent on expectations of 5.2 percent, while Costco sales increased 7 percent, when 6.5 percent was expected. “February sales were well above our expectations, due to stronger-than-expected customer traffic combined with a solid increase in transaction size,” said Chief Executive Gregg Steinhafel. Macy’s Inc. (NYSE:M) and TJX Companies (NYSE:TJX) also reported higher than expected sales growth.
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Limited Brands Inc. (NYSE:LTD), which especially benefits from Valentine’s Day shopping with its Victoria’s Secret line, reported an 8 percent pop in same-store sales, based on 6.2 percent estimates. The National Retail Federation said the average person celebrating Valentine’s Day spent $126.03, up 8.5% from last year’s $116.21 and the highest in the survey’s 10-year history.
Gap Inc. (NYSE:GPS) was one of the biggest surprises this week. Shares surged more than 7 percent on Thursday after the company reported a 4 percent rise in same-store sales, compared to a 3 percent drop last year and estimates for a 1.4 percent drop. Customers “responded well to our spring product,” Chief Executive Glenn Murphy said. Buckle Inc. (NYSE:BKE) also reported impressive sales growth that caused shares to gain nearly 7 percent.
J.C. Penney Company, Inc. (NYSE:JCP) did not announce same-store sales, because the company will no longer be giving month-to-month reports. J.C. Penney is currently undergoing a multi-year transformation led by former Apple Inc. (NASDAQ:AAPL) executive Ron Johnson. By not reporting on a monthly basis, the company most likely hopes to ease cost concerns regarding the changes taking place at stores. However, Cleveland Research believes the retailer experienced weak sales in February and a loss of market share.
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