Retail

Looking Ahead to March Retail Sales Reports

Many retailers will be reporting March same-store sales later this week, and the outlook is not pretty. According to research firm Retail Metrics, same-store sales will rise just 1.6% year-over-year in March.

Cold weather slowed sales of spring apparel forcing retailers to take deeper markdowns in order to move spring merchandise. Many retailers have already warned on earnings, and the unplanned release of an internal memo from Wal-Mart Stores Inc. (NYSE: WMT) have prepared investors for far-from-robust sales reports.

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The bright spot is discounters, led by Costco Wholesale Corp. (NASDAQ: COST) and PriceSmart Inc. (NASDAQ: PSMT), which as a group are expected to post same-store sales growth of 5.8%, compared with growth of 6.4% in March of 2012.

Department stores are expected to be flat this year, compared with growth of 6% last year. Nordstrom Inc. (NYSE: JWN) and Macy’s Inc. (NYSE: M) are expected to post the best growth, 4.5% and 3.8%, respectively. J.C. Penney Co. Inc. (NYSE: JCP) is expected to show a downturn of 9.2%.

Teen apparel sales are forecast to be 2.9% lower than a year ago, while apparel stores and specialty apparel sales are forecast to be down 1.5% and 1.4%. Drug stores, including Walmart, are forecast to show a drop in sales of 0.5% for March.

In its early forecast for April sales, Retail Metrics says that the current month should be “much better” than March, driven by “pent-up demand for spring apparel and seasonal goods.” But the book on March is closed with pretty low expectations.