Retail Sales Slide Further, Except at Wal-Mart

By STEPHANIE ROSENBLOOM

The nation’s retailers reported sales results for February that were as bleak as those of recent months — yet they were also slightly better than Wall Street was expecting, and a tentative indicator that economic deceleration may be slowing.

Retailing analysts cautioned against reading too much into the February figures, predicting that coming months would continue to be difficult for stores as consumers settled into more austere lifestyles.

Wal-Mart Stores once again proved itself the chain best able to capitalize on the new frugality. At stores open at least a year, a barometer of retail health known as same-store sales, Wal-Mart exceeded analysts’ expectations, reporting a 5.1 percent sales increase in February (not including fuel), compared with a 2.7 percent increase for the period a year ago.

The company said its strong sales were driven by its grocery, health and wellness and entertainment categories, and it noted that more customers were streaming through its doors.

“We believe falling gas prices significantly boosted household disposable income in February and therefore allowed for both more trips and more spending toward discretionary categories,” Wal-Mart said in announcing its results.

On the heels of that news, Wal-Mart said Thursday that it would increase its annual dividend 15 percent, to $1.09 a share, up from the 95 cents a share paid during its last fiscal year.

“The strength of our operations and the resulting strong financial position allow us to increase our dividend payout to shareholders again this year,” Michael T. Duke, Wal-Mart’s president and chief executive, said in a statement.

Thanks mainly to Wal-Mart’s results, the retail industry reported a decline of only 0.1 percent in February compared with a year ago, according to the Goldman Sachs retail composite index.

Another report, from the research firm Retail Metrics, showed a 0.7 percent sales gain in February compared with the period a year ago, and said that without Wal-Mart, retail sales would have fallen 4.1 percent.

As Ken Perkins, president of Retail Metrics, noted in the report Thursday morning, “it’s still ugly,” but Wal-Mart “dressed up” the month nicely.

Whatever the statistics, they were an improvement from recent months when the industry reported sales declines of 2 to 3 percent.

“Flat is the new up,” said Bill Dreher, senior retailing analyst with Deutsche Bank Securities. “If you’re only doing a zero percent increase, congratulations. You’re a winner.”

Michael P. Niemira, chief economist and director of research for the International Council of Shopping Centers, an industry group, said in a statement Thursday that “the last four months show an increasingly less negative performance for the industry.”

The council said same-store sales for some 35 chains it looks at were down 0.1 percent in February compared with a year ago.

Retailers and industry analysts said that in February stores got a lift from pent-up consumer demand, better weather and some new spring merchandise.

Still, most stores suffered sales declines. And analysts pointed out that their expectations for February sales had been low — so beating them was no great feat.

“Sales trends are not as bad as they were in January but they’re kind of at a level where they were in October, November, December,” said Jeff Black, a director at Barclays Capital Equity Research. “We haven’t improved off of that base.”

The worst sales declines came from Abercrombie & Fitch, the teenage-apparel retailer, which posted a whopping 30 percent drop.

Indeed, clothing retailers continue to be hurt the most, especially at the high end. Same-store sales sank 26 percent at Saks, 24.2 percent at Neiman Marcus stores and Bergdorf Goodman and 15.4 percent at Nordstrom, compared with a year ago.

Other department and big-box stores also had declines, including Dillard’s (down 13 percent), Stein Mart (down 12.2 percent), J. C. Penney (down 8.8 percent) and Macy’s and Bon-Ton Stores (both down 8.5 percent).

Sales fell at mall chains too, dropping 13.4 percent at Zumiez, 12 percent at Gap, 7 percent at both American Eagle Outfitters and Limited Brands and 6.6 percent at Wet Seal.

Over all, discount stores were the only retail categories that had sales increases in February, according to analysts surveyed by Thomson Reuters.

Same-store sales at BJ’s Wholesale Club increased 8.2 percent, not including fuel. The company said customer traffic increased about 7 percent and the average transaction amount ticked up about 1 percent. Sales of food increased 10 percent.

Sales at Costco were up 5 percent, not including fuel.

Ross Stores, the discount clothing chain, had a 1 percent sales increase compared with the period a year ago. Michael A. Balmuth, the chief executive, said in a news release that Ross’s “name-brand bargains” drove its better-than-expected sales.

Not every discount chain had sales growth, though the declines in this category were far less than in others. Sales were flat at TJX, which owns TJMaxx stores, and at Children’s Place, which sells affordable children’s clothing. At Kohl’s, sales fell 1.6 percent.

At Target, sales continued to lag behind rival Wal-Mart, falling 4.1 percent. Gregg W. Steinhafel, the company’s president and chief executive, said in a statement that Target’s results “continue to reflect the significant economic challenges facing our guests.”

As in previous months, a few mall retailers that cater to teenagers posted impressive double-digit increases. In fact, Aéropostale said it enjoyed record sales in February, reporting an 11 percent increase. Same-store sales at Buckle increased 21 percent. Sales at the niche retailer Hot Topic jumped 10.8 percent, much more than analysts expected.

But even though several retailers met or exceeded their management’s expectations, investors were largely unimpressed, sending shares of some chains down 10 percent on Thursday.

As Mr. Dreher put it: “The market’s losing patience with this continued underperformance.”

The International Council of Shopping Centers expects March same-store sales to be flat or to decline 1 percent on a year-over-year basis.