Retailers Ring Up Robust Sales

Howard Davidowitz, chairman of retail consulting and investment banking firm Davidowitz & Associates, says April could be "very ugly."

"I think we're in for a very soft first quarter and March is very misleading," he says. "Retailers are having a free lunch in March and they're going to buy dinner in April."

The world's largest retailer, Wal-Mart(WMT Quote) warned of a tough April selling environment, which will make meeting its first-quarter profit guidance of 68 cents to 71 cents a share a "challenge."

The company's same-store sales climbed 4% for March, surpassing its forecast for a 1% to 2% rise. Wal-Mart expects April same-store sales to be flat to down 2%, reflecting the Easter shift. Because of the change, the company faces tough comparisons to the year-ago period.

On Wednesday, Wal-Mart rival Target(TGT Quote) reported a 12% jump in same-store sales, meeting expectations. But for April, Target sees a 2% to 4% decline in comps.

Elsewhere, Gap(GPS Quote) had a surprise turnaround in March. The clothing seller reported a 6% rise in same-store sales, easily beating analysts' forecast for a 1.1% decline for the month. The company, which has been struggling with a sales slump for more than two years, saw growth across all three of its brands.

Same-store sales rose 4% at Gap stores, 8% at Banana Republic and 10% at Old Navy. While the results were in part boosted by the Easter shift, the company also said it benefited from a spring clearance at Gap and Banana Republic, which hurt margins.