Compare this April's results for Walmart stores and Sam's Club with those in March and you can get a pretty good idea of how important the Easter shift was to retail results, and how Wall Street estimates aren't a great standard against which to weigh actual performance.
In April, comparable stores sales, those for stores open at least a year, at Walmart outlets gained 5.9 percent without counting fuel revenues while those at Sam's Club advanced by 0.3 percent. Overall, Wal-Mart's U.S. comp was five percent, well above the 2.9 percent average analyst estimate as reported by Reuters Thompson. Among the product categories that helped boost the overall comparable store sales number were Easter seasonal products, which posted a comp in the high single digits, the company stated.
Conversely, in March, Wal-Mart stores posted a comp of 0.6 percent without fuel while Sam's reported a comp of 6.2 percent.
Easter, which moved from late March last year to mid April this year, affects warehouse clubs differently than other retailers. Consumers shop warehouse clubs on a less frequent basis and further out in anticipation of an event than they do discount stores and supercenters. So, Sam's got its Easter goodies in March. A similar effect applied at Costco where U.S. comparable store sales were down two percent without fuel in April after gaining three percent in March.
When the March numbers came in soft, a lot of pundits announced that the relative strength retailing had shown early this year was illusory. Retailing's monthly dip indicated, they said, that it was buried in recessionary malaise and ought to be viewed as another indication that the economic downturn was bound to be longer and darker than anticipated. Wall Street must have anticipated the affects of the Easter shift, after all, and the failure of Wal-Mart and others to meet its estimates in March was the clincher to their arguments.
In this blog, we said let's wait until April to see what the trend is, given the Easter shift and all. So, it was no surprise here that retailing rebounded. We also said that analyst estimates are formulations that don't always incorporate extraordinary events very well, things like severe weather impacts, significant holiday shifts, even tax rebates. And, once again, the Wall Street estimates were off.
So, it kind of makes sense that Wal-Mart would pick this occasion to announced that it would stop reporting monthly sales. Wal-Mart said early this year that it would stop making monthly sales forecasts, and we applauded the company for it. Given the various outside impacts that can significantly affect retailing, monthly numbers don't necessarily inform, and they often seem to confuse. By relying on quarterly trends, investors and observers will get a clearer picture of how the retailer operates through a season, which is, after all, how it executes its business plan.