U.K. retail sales rose at their strongest pace in five years in April thanks to the combination
of Easter, the royal wedding and warm weather. However, main retailers did not show such an increase in their trading quotes Tuesday.
The British Retail Consortium said Tuesday that sales in stores open at least a year rose 5.2% in April from the year-earlier month. That was the largest annual increase since April 2006, when sales rose 6.8%. Same-store sales fell 3.5% in March and fell by 2.3% in April 2010.Total sales, which include new stores, rose 6.9% from a year earlier in April, compared with a fall of 1.9% in March. In April 2010, which didn't include Easter, sales fell by 0.2%.
Across the Pond, retail stocks rose Tuesday after chain- store sales for the most recent week painted a picture of consumers willing to explore discretionary spending — including purchases in the furniture and electronics categories — beyond Mothers Day expenditures.
The S&P Retail Index rose 1.1% to 545.06, tracking the broader markets higher, after Microsoft Corp.’s announcement that it’s acquiring Internet video-phone-service provider Skype for $8.5 billion in cash. In comparison to the US benchmark index, the FashionUnited Top 100 closed the same day in 1,315.33 down by 9.99 points and dragged by flat European retailers.
Among the American decliners, American Eagle Outfitters Inc. dipped 0.7% to $14.47. The teen retailer’s stock was cut to neutral from buy at Janney Capital Markets. Analyst Adrienne Tennant said the company’s weakness is likely to persist into the second quarter and potentially the fall as its products are still not resonating with target customers.
“Despite the support of takeout chatter, ostensibly cheap valuation, and the positive changes that a new management can bring, given the lack of either of those two events as of yet, what has changed is that we choose to place our focus on our fundamental methodology and what we believe to be deteriorating performance,” she said, adding that same-store sales will continue to decline for several quarters.