California Apparel News

March retail sales beat Wall Street expectations with a 3.6 percent gain on a year-over-year basis, according to the International Council of Shopping Centers, a leading trade group for the mall industry, but things are still tough for retailers, economists and analysts said.

The past month’s business had everything going against it. The weather was still cold across much of America, so buying spring clothing was not on the forefront of consumers’ minds. The Easter holiday, which typically spurs spending, falls on April 20, so consumers did not do much Easter shopping in March.

(If Easter had taken place in March, 1 percentage point of monthly sales growth would have been added to the sales results for the month, said Michael Niemira, the ICSC’s chief economist. Expect the percentage point to be added to April retail-sales results. L Brands, the parent company of Victoria’s Secret, also noted that its same-store sales would have been higher by 2 or 3 percentage points if Easter fell a few weeks earlier.)

Adrienne Tennant of Janney Capital wrote in an April 10 research note that Wall Street had “severely low expectations” for March. Although some called March sales a rebound, Tennant wrote that many companies posted negative same-store-sales results during the month. Retail giant Gap Inc., for example, reported a same-store-sales decline of 6 percent. Glenn Murphy, Gap’s chairman and chief executive officer, called the month’s business “challenging” in a statement.

Tennant and many other analysts believe that Easter, pent-up demand and warmer weather will spur an increase in spending in April. ICSC forecast April retail sales will range from 3.5 percent to 4 percent on a year-over-year basis.

Levi Strauss & Co. reported results for its first financial quarter of 2014 on April 8. Its net revenues declined 1 percent to $1.13 billion for the quarter that ended Feb. 23. For its net income, which can be defined as the company’s bottom line, the company reported a 53 percent decline to $50 million for the recent quarter compared with the previous year.

The net income decline was due to “restructuring and other charges related to the launch of a global productivity initiative,” the company said. Levi’s recently announced it would lay off 800 workers, or 20 percent of its non-retailing and non-manufacturing workforce, to save $75 million to $100 million a year.

“We knew the first quarter would be challenging, but a heavier promotional environment and unusually bad weather made it even more difficult than we expected,” said Chip Bergh, Levi’s president and chief executive officer, in a statement. “While we anticipate the market environment to remain challenging for the next few quarters, we are staying focused on what’s within our control—product, commercially driven marketing and our cost structure—to drive long-term profitable growth.”