February Retail Very Strong

Wal-Mart, J.C. Penney and Target lead the charge.
By Nat Worden ,

Updated from 9:27 a.m. EST

Consumers revved up spending in February, according to sales reports from retailers, and one industry observer said the unexpected strength could be a sign of improvement in the labor market.

The International Council of Shopping Centers, or ICSC, said same-store sales, or sales at stores open at least a year, rose at national chains by an average of 4.9%. That marks the strongest sales month since last May, when retailers posted an overall gain of 5.4%, and the results blew away ICSC's expectations for a gain of 3.3%.

"There was a confluence of factors helping to lift February sales," said Michael Niemira, the ICSC's chief economist and director of research. "Although it seems that not one factor in particular was overwhelmingly dominant, it was clear that some improvement in the labor markets may have been one of the contributing reasons."

The market is awaiting the government's monthly employment report for February, which is due out Friday. Economists expect nonfarm payrolls to have added 225,000 jobs and the unemployment rate to have held steady at 5.2%.

Big Box Numbers

Among companies reporting, the world's largest retailer,

Wal-Mart

(WMT) - Get Report

, said same-store sales for February surged 4.1% from a year ago.

The discount giant reported overall sales of $22.37 billion for the month, up 10.9% from a year ago. By segment, Wal-Mart Stores' overall sales rose 11.1% from a year ago to $15.13 billion, Sam's Club's overall sales rose 5.4% to $2.82 billion, and international sales rose 14.4% to $4.41 billion.

The company had previously previewed a same-store sales increase of 4% for the month. "For the March five-week period, we forecast comparative sales for the U.S. to be similar to or better than February," Wal-Mart said.

Despite its unexpected strength, Wal-Mart still played second fiddle to its chief competitor in the monthly sales department.

Target

(TGT) - Get Report

, the No. 2 U.S. discounter, posted a same-store sales gain of 9%, well above estimates.

Target said total sales from continuing operations for the month rose 16.1% to $3.38 billion. For March, it predicts a same-store sales gain in the range of 6% to 8%.

Among other retailers,

Gap

(GPS) - Get Report

posted a smaller-than-expected decline, with February same-store sales down 3%. The clothing chain operator said total sales declined slightly to $924 million for the month.

Kohl's

(KSS) - Get Report

, a midpriced department store, said its February same-store sales rose 6.1%, beating estimates. Its total sales added 20.4% from the year-earlier period to $712.7 million.

Sears

(S) - Get Report

, which is expected to finalize plans to be acquired by

Kmart

(KMRT)

this month, posted February same-store sales up 1.3%. Analysts were expecting a decline. Sears' total U.S. store revenue rose 2.2% to $1.78 billion.

Traffic Department

Federated Department Stores

(FD)

, which recently announced plans to acquire

May Department Stores

(MAY)

, said its same-store sales rose unexpectedly by 1.8% in February.

Elsewhere in department stores,

J.C. Penney

(JCP) - Get Report

beat expectations, reporting a same-store sales gain of 6.1% for February. That comes on top of a 12.1% gain in the same month last year.

J.C. Penney said sales of spring apparel and seasonal products exceeded expectations with good customer response to Valentine's Day and Presidents' Day promotional events. Internet sales increased 35% for the month. The company expects March comps to come in at the low- to mid-single digits.

Abercrombie & Fitch

(ANF) - Get Report

said February same-store sales rose 19%, blowing away estimates. It reported net sales of $159.9 million for the month, a 33% increase over last year's sales of $120.6 million.

AnnTaylor Stores

(ANN)

said its February same-store sales dropped 5.4%, but the results still beat Wall Street's expectations. The New York-based women's clothing retailer said total sales for the four weeks ended Feb. 26 rose to $109.8 million, up 6.7% from the same period last year.

Special Strength

Chico's

(CHS) - Get Report

said late Wednesday its same-store sales rose 9.2% for the month compared to last year, beating Wall Street's estimates. Its total sales rose 24.2% to $83.5 million.

Goth gear purveyor

Hot Topic

(HOTT)

said same-store sales rose unexpectedly in February despite a tough year-ago result. Comps were up 0.2% for the company, compared with expectations for a 2% decline.

Another teen apparel retailer,

American Eagle Outfitters

(AEOS)

, said its same-store sales jumped 32% for the month. Total sales rose 42% to $127 million.

Aeropostale

(ARO)

reported same-store sales rose 13.4% in February, beating estimates. Its total sales for the month rose 37.8% to $59.4 million.

Also in teen clothing,

Pacific Sunwear

(PSUN)

said Tuesday its February same-store sales rose 10.5%, while total sales jumped 22.7% to $83.1 million. Its PacSun stores logged a same-store sales gain of 10.7%, and d.e.m.o. stores recorded an increase of 9.1%.

At the high end of the retail spectrum,

Neiman Marcus

(NMG)

said Wednesday that its February same-store sales rose 7.7%, topping estimates. Its total sales for the month came to $275 million, up 6.5%.

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