12 Apr Retailers faced a weather double-whammy in March
April 12–Retailers faced a weather double whammy in March that made it difficult to increase sales.
A March characterized by what Carol Meyerowitz, chief executive officer of the T.J. Maxx and Marshall’s chain, described as “extraordinarily cold weather” kept consumers from buying the shorts and spring clothes retailers rolled into stores beginning in February. And robust sales in March 2012, fueled by unusually warm temperatures that month, gave retailers a tough year-over-year comparison.
In March 2012, there were 7,500 record high temperatures set across the United States, according to the National Climatic Data Center. This March, more than 2,600 record cold temperatures were recorded, according to Accuweather.
Average sales at stores open at least a year rose a tepid 1.4 percent for 15 major retailers that release monthly sales results, according to the International Council of Shopping Centers. Excluding drug store sales, the average gain was 2.5 percent, the lowest increase since November 2012, when non-drug sales rose 1.7 percent.
The average increase for the month does not include major retailers such as Wal-Mart, Target and Macy’s, which do not report monthly results.
Retailers typically put out their spring merchandise after the January clearance sales, and count on good weather, or at least the promise of warmer days, to boost sales. But this year’s delayed spring left that merchandise sitting in the stores.
“It’s hard to think about buying shorts and T-shirts and things along those lines when it’s 35 degrees out,” said Ken Perkins, president of Retail Metrics Inc., a research firm that tracks retail results.
The weather last month, following as it did three years of unseasonably warm Marches, “made for an uphill battle” for retailers trying to grow sales. “This year the season got off to a very, very slow start as temperatures were below normal and snowfalls were above norms,” in parts of the Midwest and Northeast, Perkins said. The weather “certainly depressed spring apparel, lawn and garden, any seasonal merchandise sales,” he said.
Secaucus-based retailer The Children’s Place warned investors last month that its first-quarter sales were lagging 8 percent behind last year, as of March 26, because of the wintry March weather.
“The last two weeks have been painful” for sales, Children’s Place CEO Jane Elfers said in a conference call March 26.
“We had record heat last March, and starting with the second week of March this year, temperatures have fluctuated anywhere from 15 to 50 degrees colder than last year throughout the majority of our markets,” Elfers said.
The weak first-quarter results caused Children’s Place to predict earnings for the quarter and the full year will be significantly lower than last year’s results. The company forecast adjusted earnings per share for the first quarter of between 60 cents and 65 cents, compared with $1.14 for the first quarter of 2012.
TJX Cos., which included the T.J. Maxx and Marshall’s discount chains, reported a sales decrease of 2 percent, compared with March 2012. Ross Stores, the nation’s other leading discount chain and operator of the Dress for Less stores, reported a 2 percent sales increase at stores open at least a year.
Gap Inc. reported that its combined sales declined 1 percent in March, compared with 8 percent growth in March 2012. The company’s Banana Republic stores boosted sales 1 percent, while sales at Gap stores were flat, and sales at Old Navy stores were down 2 percent.
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