Business

Shoppers backed off a bit in April, but retail's 1st quarter looks good

NEW YORK — Americans eased back in April from their March shopping spree, partly because Easter came earlier. But the spring selling season is ending up respectable, an encouraging sign for the economy.

Discounters including Costco Wholesale as well as luxury retailers emerged as the biggest winners. Limited Brands and Macy's had solid gains. Teen merchants including American Eagle Outfitters and Abercrombie & Fitch continue to struggle with declines.

The figures are based on revenue at stores open at least a year and are considered a key indicator of a retailer's health because they exclude growth at stores that open or close during the year.

"Consumers took a breather in April," said Ken Perkins, president of RetailMetrics, a research firm. "But overall, retailers have to be pleased with the spring selling season."

Still, Perkins added that the consumer spending recovery is likely to be slow amid persistent high unemployment and tight credit.

Analysts had expected last month to see a slowdown because Easter had pumped up sales in March. But the results came in weaker than expected, with many retailers missing Wall Street estimates, according to Thomson Reuters. Analysts are studying the combined March and April receipts to get a better gauge of consumer spending. Cooler weather last month also played a hand in hurting sales of seasonal goods such as shorts.

According to the International Council of Shopping Centers Index of 30 retailers, the key measure was up 0.8 percent, compared with a 2.7 percent decline a year ago. That followed a 9 percent gain in March, the strongest since March 1999. For the March and April months combined, the index rose 4.9 percent, well above the average pace of 4.1 percent since January.

"The real takeaway is that profitability continued to improve on the healthy underlying demand," said Michael P. Niemira, chief economist at ICSC.

In fact, the month ended what's expected to be a decent first quarter for many retailers. A number of merchants, including Target Corp., Gap Inc., J.C. Penney Co. and Macy's Inc. all raised their earnings outlooks amid encouraging signs that they didn't have to discount aggressively because shoppers were buying full-priced merchandise.

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