It's warming up to be a good year for retailers. Sales data was particularly bright for Target
Discount retailer Target enjoyed stronger-than-expected sales. March comps were up 7.3% ahead of estimates for an increase of just 5.7% for the month. CEO Gregg Steinhafel thanked the early arrival of Easter and unseasonably warm weather for the sales boost. I think Target will continue to surprise analysts with strong performance in the months ahead, which is why the stock has long been one of my top picks in Motley Fool CAPS.
The real shocker was Gap's 8% gain, which nearly doubled estimates of 4.6% according to research from Retail Metrics. This is even more impressive considering that the country's largest apparel chain reported a 10% decline in same-store sales a year ago. Another leader, although less surprising than Gap, was Macy's, with a 7.3% spike in same-store sales for the month. Analysts had expected just 4.8% for the department-store chain.
Let's look at the monthly performance for five of the leading retailers for the March period.
March 2012 Sales
Source: Retail Sails.
Discounter Kohl's came in strong, with comps increasing 3.6%, compared with a 6.5% decline the previous year. The retailer continues to open new stores and should be able to maintain its momentum going forward. Meanwhile, although Costco tops the chart in terms of monthly sales, its March numbers fell short of analysts' expectations. The wholesaler missed forecasts for same-store sales of 6.5%, instead posting a mild gain of 6% for the period. I expect Costco to gain speed moving into the summer months, despite the company's slow start.
It's shaping up to be a promising year for retail stocks, and investors are taking notice. Add these stocks to MyWatchlist, The Motley Fool's free tool, so that you can track and monitor their performance in the months ahead.