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Cool weather, absence of Easter dampen April sales

By Anne D'Innocenzio

Associated Press

NEW YORK -- Unseasonably cool weather and Easter in March dampened retail sales in April, but several merchants raised their profit outlook Thursday noting that lean inventories reduced the need for heavy discounting.

"The only positive news is that the inventory picture looks good," said Kurt Barnard, president of Barnard's Retail Trend Report, based in Montclair, N.J. "And that will bode well when retailers report first-quarter earnings" next week.

Wal-Mart Stores Inc., along with other discounters and moderate-priced powerhouses like Kohl's Corp., continued to outperform the industry last month. Department stores, with a few notable exceptions such as J.C. Penney Co. Inc., again languished.

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Apparel chains, hit hard by the damp and cold weather that stymied demand for shorts and this season's peasant tops, saw sales slide 11.6 percent, according to Bank of Tokyo-Mitsubishi Ltd.

Gap Inc. again posted a sharp decrease in sales at stores open at least a year, known as same-store sales. But the decline wasn't as steep as Wall Street expected. Same-store sales are considered the best indicator of a retailer's health.

"This month had two double whammies: weather and the absence of Easter," said Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi.

The Bank of Tokyo-Mitsubishi's same-store sales tally of 78 chains, measured a gain of only 1.6 percent for April. That is about half of Niemira's original forecast for a 3.5 percent gain.

Whether April's lackluster performance marks a significant change in consumer spending from the rebound the industry saw from January through March remains to be seen.

"I feel this is just a weather story at this point," Niemira said. "When you are in between holidays, you are weather dependent."

May sales should be more telling, he said.

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