The Commerce Department reported April’s U.S. retail sales data on Friday. Retail sales increased 1.3% in April to a seasonally adjusted $453.44 billion after an 0.3% decrease in March, which was the largest rise since March 2015.
The rise in sales gave confidence to retail sector that had weak performance in the first quarter of 2016. Several major retailers reported soft sales in the first quarter.
Macy's, Inc. (NYSE:M), the largest department chain, reported 5.6% decrease in same-store sales in the first quarter. It also estimated that the full-year sales of 2016 would drop 3% to 4%.
JC Penney Company Inc. (NYSE:JCP) reported its first quarter sales on Friday. Net sales dropped 1.6% from $2.86 billion in the same period of 2015 to $2.81 billion in 2016, which was well below analyst expectations of $2.92 billion. The company expected that the same-store sale would get a 3% to 4% increase this year.
Nordstrom, Inc. (NYSE:JWN), a fashion specialty retailer in the United States, said that its sales fell 1.7% in the first quarter, and would lower its profit expectation from $3.10-$3.35 to $2.50-$2.70 per share. The shares were down 14% after the weak results in pre-market trading Friday.
Kohl's Corporation (NYSE:KSS), a specialty department store, also reported its poor sales performance this week. The revenues were $3.972 billion in the first quarter, missing the expectation of $4.124 billion. Comparable store sales dropped 3.9%, compared with a rise of 1.4% in 2015.
“Recent claims of the demise of the U.S. consumer have been greatly exaggerated,” said Capital Economics economist Steve Murphy. Strong sales in April is a sign that economy was revived after a slow start in 2016.
According to the report, 11 of 13 categories showed increase in sales, except for building materials and garden equipment. The jump was led by three categories, automobiles, gasoline stations and online merchants such as Amazon.
Purchases of automobiles and parts rose 3.2% in March. Spending on gasoline station was up 2.2% due to the increase in gasoline price in April. Spending in the Internet and catalog segment increased 2.1%, which was the best performance since June 2014.
Core sales, which exclude categories as autos, gasoline stations and building materials, rose 0.9% in April, the best gain since March 2014. The increase in core sales would prompt economists to boost their second-quarter GDP expectation.
In addition, sales at electronics and appliance outlets increased 0.5%, and sales at restaurants and bars rose 0.3 percent. However, building materials and garden equipment stores fell 1.0 percent in April, the only two categories decreased in April.
“Our industry is in something of a rough patch…but the consumer seems to be doing OK.” Macy’s Chief Financial Officer Karen Hoguet said. “It is reasonable to conclude that the consumer will return to more aggressive discretionary spending at some point. Hopefully, sooner than later.”