Gap, Target same-store sales top estimates amid warmer weather
CARS sit parked in front of Target Corp. signage displayed outside of a store in Minneapolis, Minnesota
BLOOMBERG NEWS FILE PHOTO ARIANA LINDQUIST
By Ashley Lutz Bloomberg News
NEW YORK - Gap Inc. and Target Corp. posted February same-store sales that topped analysts’ estimates as unseasonably warm weather boosted purchases of spring merchandise.
Sales at Gap, the largest U.S. apparel chain, climbed 4 percent, beating the average projection for a 1.4 percent drop from analysts surveyed by Retail Metrics Inc. Target, the second-largest U.S. discount retailer, posted a 7 percent increase in same-store sales, topping the 5 percent estimate.
Warmer weather helped retailers who aggressively rolled out new products, Eric Beder, an analyst at Brean Murray Carret & Co. in New York, said in a report before results were announced. December and January were the warmest in six years, with mild temperatures continuing into February, according to Planalytics, a weather data provider.
“Warm weather could have led to a fairly stellar February,” Joel Bines, head of retail practice at AlixPartners in Dallas, said in a telephone interview before the results. “All indications point to a strong Valentine’s Day and the retail world benefiting from pent-up demand.”
Gap, based in San Francisco, rose 10 percent to $25.70 at 8:12 a.m. in in New York. Minneapolis-based Target climbed 1.3 percent to $57.45.
Same-store sales for the more than 20 companies tracked by Swampscott, Mass.-based researcher Retail Metrics were estimated to rise 3.5 percent. Full results will be available later today.
Most chains count locations open at least a year to tabulate same-store sales. The revenue is as key indicator of a retailer’s growth because new and closed sites are excluded.