NEW YORK - Wal-Mart Stores Inc. is reaping a bonanza from a US economy teetering on the brink of a recession.
Wal-Mart, the world's largest retailer, said yesterday that sales at stores open at least a year rose 2.6 percent in February, topping its estimate of as much as 2 percent. Sales at Gap Inc., J.C. Penney Co., and Nordstrom Inc. fell.
Wal-Mart and Costco Wholesale Corp. offer a gamut of products from groceries to DVDs at lower prices, attracting consumers contending with layoffs, $3-a-gallon gasoline, and a deteriorating housing market.
"We are seeing the consumer trading down," Fred Crawford, managing director at AlixPartners LLP, a Southfield, Mich.-based consulting firm, said. "You've got a large swing set in Middle America. In good times, they buy up into department store categories, and in tougher times, they buy down into mass categories."
Wal-Mart climbed 43 cents to $49.98 at 4 p.m. in composite trading on the New York Stock Exchange and was the only member of the Dow Jones industrial average to rise yesterday. Gap shares retreated 5.6 percent, while J.C. Penney fell 11 percent, the most in six years.
US retailers' same-store sales climbed 1.9 percent last month, based on the results of 39 chains, according to the International Council of Shopping Centers. Results exceeded the New York-based trade group's forecast of a gain of at most 1 percent because of Wal-Mart, said council economist Michael Niemira.
Sixty-one percent of retailers beat average analyst sales estimates, compared with a monthly average of 56 percent, Swampscott-based Retail Metrics LLC said.
Wal-Mart marked down prices on groceries, medicine, fitness equipment, and electronics by as much as 30 percent to attract customers squeezed by the worst housing recession in a quarter century. The Bentonville, Ark.-based retailer said March same-store sales may climb as much as 2 percent.
"They have really come back to focusing on price," John Lawrence, an analyst at Morgan Keegan Inc. in Atlanta, said yesterday. He rates Wal-Mart as "market perform."
US warehouse clubs also profited as penny-pinching consumers bought in bulk to save money and limited trips to other stores. Costco, the largest by sales, said yesterday that February same-store sales climbed 7 percent. BJ's Wholesale Club Inc. posted a same-store sales gain of 5.9 percent.
J.C. Penney, the third-largest department-store chain, said same-store sales dropped 6.7 percent. February results "reflect the continuation of a weak consumer spending environment," the company said on a conference call.
Gap, the largest US clothing retailer, said sales fell 6 percent, almost twice the average estimate, according to Retail Metrics LLC.
Limited Brands Inc., the owner of the Victoria's Secret lingerie chain, said February same-store sales retreated 9 percent. Kohl's Corp., the fourth-biggest US department-store chain, and Nordstrom, a luxury department-store chain, also reported declines.
Consumers worried about losing their jobs and higher costs for milk and cereal have curbed spending.
February tends to be the least important sales month in the first quarter for many retailers, comprising about 30 percent of discounters' quarterly revenue, according to Christine Augustine, a retail analyst at Bear Stearns Cos.
