Retail sales figures from March started pouring in yesterday, and it looks like there are only a few winners. Gap (GPS 12.46%) saw comparable sales drop 1% in March. Buckle (BKE 11.45%) had flat sales, and even TJX (TJX 2.58%) had a 2% decline. The culprit -- if you feel obligated to look further than branding and management -- might be weather.
The weather mentality
Luckily, there are all sorts of interesting studies that people have done to indicate why we're prone to shop in one kind of weather and not in another. The unsurprising conclusion of this research is that we get thrown off easily. If it's supposed to be freezing cold and is, then we shop just fine. If it's supposed to be freezing cold but it's warm, we get flustered. It's like going to your favorite restaurant only to discover that they've changed the menu, and now it's all soy and things with tentacles.
So when March temperatures got stuck on "Arctic," shoppers pulled back. The kind of store they visited seemed to be unaffected. Gap and Buckle both have a heavy focus on jeans, but TJX's T.J. Maxx brand sells everything in equal measure, and it was one of the worst performers. The problem is one of expectations, and when consumer expectations aren't met, consumers lose their minds.
As an analyst from Retail Metrics told the Los Angeles Times, "The deck was stacked against both retailers and consumers alike." The only thing going in consumers' favor last month was the lower cost of fuel, which took a surprising turn in March. But that wasn't enough for retailers, and now investors seem to be suffering the consequences. Stupid weather.
The good news
The good news is that seasonal and weather-based trends are just that -- trends. A slowdown from a cold March isn't going to jeopardize TJX's plan to expand its store count by 50% in its current markets. It's not going to stop Buckle from paying out its yearly special dividend, and it's not going to put Gap off its continued international expansion plans.
While investors -- and this includes me -- jump all over the monthly sales figures from retailers, more and more companies are trying to even out their ride. Companies like Target and Macy's have realized that moving to a quarterly release schedule is better for everyone.
In the long run, that's probably a good guide for investors, as well. A solid investing thesis isn't going to go up in flames just because you can still skate on the local pond. As buy-and-hold investors, it's probably wise to let the weather happen, and worry more about the financials.