April’s retail sales soared ahead of analysts’ expectations, providing a much-needed boost after a series of weak months [WAMN: 14-Mar-01].
The Goldman Sachs Retail Sales Index, which covers 39 stores open at least a year, jumped 3% last month, considerably more than the firm’s own expectations of 1.8%. It was a similar story at global investment bank Lehman Brothers, whose forecast of a 2.5% rise in its own sales index was dwarfed by the eventual increase of 3.7%.
Behind the figures lay a strong performance by discount stores, while the warm weather boosted demand for garden products and women’s clothing. However, growth at department stores continues to be sluggish
Commented George Strachan, a retail analyst at Goldman Sachs: “The discounters, especially Wal-Mart Stores [where sales grew 6.5%] and Costco Wholesale [with 6% growth], had stronger numbers than we expected, and the specialty-apparel segment we thought would do a lot worse.”
However, analysts described last month’s jump as an indicator of volatility rather than a sign of an improving economy. Nevertheless, year-on-year sales are expected to continue rising for most stores – “If the back half of the year brings tax and interest-rate cuts, consumer sentiment and consumers’ wallets will continue to improve, and so will sales,” explained Lehman Brothers analyst Jeffrey Feiner.
News source: Wall Street Journal