Retailers Report Sales Declines in February

By Anne D'innocenzio

NEW YORK -- Tighter inventory control and milder weather helped retailers in February as business at many merchants was not as bad as in January. Wal-Mart's (WMT Quote) gains far outpaced expectations -- but many stores, especially at the higher end, still struggled.

The month showed a widening rift between moderately priced stores and luxury chains like Saks (SKS Quote). In the results released Thursday, mall-based clothing chains including Wet Seal (WTSLA Quote), Stage Stores Inc. and American Eagle Outfitters (AEG Quote) still saw sales slump, but the declines weren't as steep as Wall Street expected. At teen retailer The Buckle Inc., the same-store gain was more than double what Wall Street expected.

Same-store sales are sales at stores open at least a year and are a key measure of a retailer's health.

Nevertheless, analysts were quick to say that February's figures are unlikely to mark the beginning of a recovery. Consumers are still grappling with massive job cuts, tight credit and plummeting stock portfolios. The fear is that the economy could deteriorate even more as more people lose their jobs and are forced to slash spending even further.

The retail sales reports came as the Labor Department said that the number of new jobless claims and the total number of people receiving unemployment benefits both dropped unexpectedly last week -- though they remain high. In fact, economists surveyed by Thomson/IFR expect data out Friday to show that unemployment rose to 7.9% in February from 7.6% in January as companies kept slashing jobs.