April Same-store Sales Headed for a Fall (WAG, KSS, SKS, JCP, TJX, XRT)

US retailers will report April same-store sales results this week and the outlook calls for a substantial drop from March’s gain of 3.9% to an April rise of just 1.4%. The data comes from research firm Retail Metrics Inc.

The consensus estimate for a same-store sales gains is down -0.1% from a week ago as a result of lowered forecasts from Walgreen Co. (NYSE: WAG) and Kohl’s Corp. (NYSE: KSS). Other top retailers taking share price hits today include Saks Inc. (NYSE: SKS) down nearly -4%, J.C. Penney Co. Inc. (NYSE: JCP) down about -1%, and The TJX Companies Inc. (NYSE: TJX) down about -1.3%.

Other factors contributing to the lower expectations include the early Easter holiday which pulled sales into March, warm weather in Feburary and March, a late Mother’s day that will push marginal sales into May, and a very high comparison to an 8.7% same-store sales jump in April 2011.

Retail Metrics notes that “the state of the American consumer remains somewhat fragile:”

Unemployment is still entrenched north of 8%, gasoline prices near $4/gallon but looking to have peaked, consumer confidence mixed, … housing and home prices searching for a bottom, growing concerns over a third straight annual economic soft patch, and the weekly initial jobless claims four-week moving average having ticked up again last week.

The research firm also noted that of 19 retailers reporting first quarter results for fiscal quarters ending in March, 16 beat expectations and 15 posted higher year-over-year earnings growth. On the basis of those numbers, Research Metrics now expects first quarter retail earnings to rise 10%, up from an earlier forecast of 8.7%.

Combining the two months of March and April, same-store sales are expected to gain 2.8%, “well below” the average increase for the last 14 months of 4.7% growth. The 2012 growth is also lower than either 2010 (5.2%) or 2011 (4.6%). Some of this year’s drop is attributed to the much higher comparable sales in 2011, as we’ve already noted.

The SPDR S&P Retail ETF (AMEX: XRT) posted a new 52-week high this morning of $63.03 before giving some of the gain back to trade at $62.03 at about 12:30 p.m. The ETF has gained nearly 18% in the past 12 months though it is down slightly for the year-to-date.

Paul Ausick