NEW YORK ( TheStreet) - Retailers are blaming extended cold weather this past winter for a decline in first-quarter sales, which will be reflected in companies' quarterly earnings, the bulk of which will be announced in the following two weeks.
Large department stores and discount retailers including Macy's (M), Wal-Mart Stores (WMT - Get Report), JC Penney (JCP - Get Report), Kohl's (KSS) and Nordstrom (JWN) report later this the week. Best Buy (BBY - Get Report), Target (TGT - Get Report), Sears (SHLD) reporting next week.
According to the Thomson Reuters Quarterly Same Store Sales Index of 78 retailers, same-store sales are expected to show a paltry 0.8% growth for the first quarter compared with 3.4% growth in the same period a year ago. Excluding Walmart, growth is expected to be 1% compared to 3.7% for the first quarter of 2012.
The long and sometimes difficult winter pushed some first quarter consumer activity in the second quarter, said Bank of America Merrill Lynch analyst Lorraine Hutchinson in a May 1 research note. Hutchinson lowered her earnings estimates for JCPenney, Kohl's, and Saks but raised her forecast for Nordstrom.To offset lower first-quarter sales, large retailers sought to cut expenses while offering more promotions "Early in the quarter, we saw week after week of increased in promotions," says Brian Sozzi, CEO of Belus Capital Advisors. "They had to what they had to do to clear the stuff." Sozzi expects big retailers to generally report overall earnings in-line with consensus estimates. Both Target and JCPenney already warned investors of lower quarterly sales. Target signaled on April 16 that first-quarter comparable store sales would be flat, particularly from lower sales of seasonal and weather-sensitive products. The Minneapolis-based company, which reports on May 22, said first-quarter adjusted EPS would be below its previous forecast of $1.10-$1.20 per share. (GAAP earnings would also be 28 cents lower than adjusted EPS due a variety of things including the early retirement of debt and gains from the sale of its credit card portfolio, it said.)