The coldest February since 1979 caused U.S. retailers' sales to grow at the slowest pace in 11 months as consumers delayed purchases of spring merchandise.
Wal-Mart Stores Inc., the world's biggest retailer, said sales at stores open at least 12 months rose 0.9 percent, less than the company's forecast of 1 percent to 2 percent. Luxury stores and retailers with designer clothes, including Target Corp., the second-largest U.S. discount chain, fared better, with sales surpassing analysts' estimates.
Total U.S. same-store sales rose 2.4 percent, the smallest gain since March 2006, the International Council of Shopping Centers said based on results from 51 retailers. The majority of retailers missed estimates after cold weather cut demand for shorts, dresses and spring merchandise, while a snowy Valentine's Day in the U.S. Northeast kept some shoppers home.
``We hate to hear weather as an excuse, but I think it was pretty legitimate this month,'' said Lori Wachs, who helps manage $100 billion at Philadelphia-based Delaware Investments, including retail shares. Retailers ``are going to have a lot of ground to make up in March.''
This is another piece of bad economic news this week. We had a drop in durable goods and productivity and higher labor costs. The Beige Book was slightly optimistic, but noted it had concerns with housing. It also said nothing had change on the inflation front, implying rates aren't coming down anytime soon.
While this report isn't horrible because sales are still positive, its weakness may imply the consumer is slowing down his retail purchases.