Wal-Mart, Target lead encouraging retail report

NEW YORK -- Consumers enticed by warmer weather and glimmers of hope for the economy bought more in April, helping boost sales results at established stores.

Wal-Mart reported a stronger-than-expected 5% rise in sales at U.S. stores open at least a year, helped by demand for Easter merchandise.

Target says same-store sales edged up 0.3% in April and it predicted first-quarter results will likely beat expectations.

Overall, however, business remains weak, and many analysts expect a drawn-out recovery as layoffs keep increasing and other economic woes persist.

Among the merchants that reported sales results Thursday, a number of mall-based clothing stores including Stage Stores and Wet Seal posted smaller declines than analysts had expected. The Children's Place Retail Stores and The Buckle reported gains that were better than forecast.

But warehouse store operator Costco reported a deeper-than-expected same-store sales drop, hurt by the closing of its stores on Easter.

Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

"It looks as though the rate of decline is diminishing," said Ken Perkins, president of research firm RetailMetrics. "There were a number of factors putting more money into people's pockets, but the macro headwinds are still significant."

Retailers' business was helped by warmer weather, tax refunds, and a shift in the Easter holiday from mid-March last year to April this year. That shift hurt business in March but helped boost April results. Signs of an improving an economy — a stock market rally and better news about the housing market — have helped improve shoppers' confidence.

Sentiment still hovers near historic lows, however, as shoppers worry about job security, available credit and their shrunken retirement funds.

Costco said its April same-store sales dropped 8%, more than the 6.8% drop analysts expected. Excluding lower gasoline prices and the stronger dollar, same-store sales were flat.