March Retail Sales Seen Benefiting From Early Easter

Easter Sunday fell on March 27 this year – early in the season – and that is expected to demonstrate a beneficial effect on retail sales figures for the month. The Thomson Reuters Same Store Sales Index (SSS) forecast for March 2015 indicates a gain of 1.5%, better than the actual 1.0% increase a year ago. Excluding the drug store sector, the SSS growth rate falls to a 0.8% estimate; this is stronger than the 0.1% ex-drug result recorded in March 2015.

Easter fell in April last year, so the beginning of this year’s spring shopping arrived in March, expecting to benefit same store sales. Demand for the latest fashion trends is always strong in the weeks leading up to Easter, a time when retailers are still selling the season’s must-have items at full price.

Gap has the heaviest weighting in our apparel sector, and is bringing the overall group down with a -4.3% SSS estimates. Analysts polled by Thomson Reuters expect the Apparel sector as a whole to report a -2.0% SSS, compared to the 4.9% SSS recorded in March 2015. Excluding Gap, one of the heaviest-weighted components in the sector, Apparel is set to improve at 1.1%, below the 8.6% result posted in March 2015. L Brands has the strongest estimate in this group at 2.0%. On the flip side, teen retailers The Buckle and Zumiez have the weakest SSS estimates in the group at -6.7% and -5.3%, respectively.

March marks the second month of the retail industry’s first quarter and we have received a significant amount of negative guidance for that period. Consequently, analysts have been lowering first quarter comp estimates. Our Thomson Reuters Quarterly Same Store Sales Index, which consists of 80 retailers, is expected to post 1.4% growth for Q1 (vs. 1.6% in Q1 2015).

Exhibit 1.  March 2016 SSS estimates

Source: I/B/E/S estimates.  Note: Aggregate mean data is revenue weighted.

Exhibit 2.  Rite Aid is on Top, While The Buckle Is Expected to Post the Weakest SSS

Source: I/B/E/S estimates