El Nino Depresses Retail Sales

On Thursday, the nation's major retailers reported better-than-expected sales in February, with unseasonably warm weather through much of the country encouraging shoppers to begin buying spring merchandise early.

While sales overall were strong, a number of retailers said harsh El Nino-related weather depressed sales at some of their stores last month.

"For the most part, there were very robust sales last month," said Kurt Barnard, a retail consultant and president of Barnard's Retail Trend Report. "But El Nino undoubtedly hurt some retailers, especially those clustered in California."

February was the second month of strong sales for retailers. After a slow Christmas season, big discounts brought shoppers back to the stores in January, while warmer-than-normal temperatures helped drive sales last month.

Especially strong in February was demand for spring clothes, which boosted sales at specialty apparel retailers Gap Inc. and The Limited Inc. Even Kmart Corp., which has struggled with its apparel, said clothing sales were up for the month.

Sales also were healthy at discount stores, with Americans buying up goods for outdoor activities and yard work thanks to the warm weather. Wal-Mart Stores Inc. had one of its strongest months since the early 1990s.

"The warm weather got shoppers into the stores," said Jeffrey Feiner, managing director at Lehman Brothers Inc. "Many bought goods at full price, which will be good for retailers profits."

Among those hardest hit by rainy weather in California and snow storms in several states were Federated Department Stores Inc., Saks Fifth Avenue and the Mervyn's clothing division of Dayton Hudson Corp.

Wal-Mart, the nation's largest retailer, said its sales from stores open at least a year rose 6.7 percent from a year earlier, while total sales were up 9.8 percent.

Sales from stores open at least a year, known as same-store sales, are considered the most accurate measure of a retailer's strength. They exclude sales from stores that have been closed and from new stores, which often have disproportionately strong sales.

By Rachel Beck
©1998 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed