NEW YORK ( TheStreet) - Winter blues seem to have gotten the best of consumers in March.
Retail sales for the month disappointed, according to data released Friday, with analysts attributing the miss to colder-than-expected weather, an earlier-than-usual Easter holiday and a general macro-economic malaise.
U.S. retail and food service sales fell by 0.4% in March compared to February on an adjusted basis, to $418.3 billion, according to the Commerce Department.
Economists were expecting sales for the retail sector to be flat for the month of March, according to Thomson Reuters.March retail sales fell by 2.8% when compared to the same time period in the prior year. Total sales for the January through March 2013 period were up 3.7% compared to 2012, the data said. Retail sales, excluding auto, fell 0.4%, according to the data. Thomson Reuters had also expected that number to be flat. "The fall off in spending is no surprise," said National Retail Federation Chief Economist Jack Kleinhenz, in a statement. "A colder-than-usual winter, an anemic employment picture and delays in tax refunds impacted consumer spending across the board in March. While we remain optimistic that retail sales will grow modestly this year, it seems like the economy is off to a shaky start as we enter the second quarter." That said, Kleinhenz pointed to improving housing prices and lower gas prices that could offset the financial impact on consumers of increased taxes and sequestration. Non-store retailers were up 13.5% from March 2012, while auto and other motor vehicle dealers rose 7.4% from last year, the Census says. The furniture and home sales category appeared to have the highest gain in retail sales last month, up 0.9% compared to February, while sales at gasoline stations declined the most, down 2.2%, the Commerce Department said. Analysts expect April sales to be better, given the warming weather, which motivate consumers to start shopping again. "Weather issues are short-lived, and while they likely negatively impacted March sales, we believe 'fashion newness' will spur incremental spending in April as the weather turns to spring," Janney Capital Markets analysts Adrienne Tennant and Gabriella Carbone write in a research note. That said, the analysts say stock selection will be critical. "We look for retailers that have company-specific drivers to expand margins and drive earnings, exhibit strong inventory control, still have upside opportunity to drive GMROI (gross margin return on investment), and that can benefit from the key fashion trends emerging this year," the note says. Abercrombie & Fitch (ANF - Get Report), Francesca's Holdings (=FRAN) and Urban Outfitters (URBN - Get Report) are three names the analysts specifically referred to as hitting on those trends. Shares of Zumiez (ZUMZ - Get Report), the action-sport apparel and accessory retailer, spiked as much as 16% on Thursday following its release of March same-store sales numbers that considerably beat the analyst estimates. Total sales for the first quarter rose 3.7% compared to the year-earlier period. The Commerce Department lowered its February sales growth from January to 1% from 1.1%. -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: firstname.lastname@example.org.
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