Retailers' sales offer glimmer of hope

By Martinne Geller

NEW YORK (Reuters) - Sales at U.S. retailers declined less than expected in March in a sign that shoppers may be regaining confidence to open their wallets after more than a year of recession.

Of the U.S. retailers that reported March sales at stores open at least a year, more than half topped Wall Street estimates, and a handful even raised their quarterly earnings outlooks on Thursday.

According to Thomson Reuters' revenue-weighted same-store sales index, overall sales fell 1.8 percent, double the expected decline, due largely to weaker-than-expected sales growth at Wal-Mart Stores Inc. Excluding Wal-Mart, sales fell 5 percent, slightly better than the 5.2 percent drop that analysts expected.

"The numbers are still soft, but given the deluge of negative news we have seen in the retail space over the last several months, it's got to be somewhat encouraging," said Ken Perkins, president of Retail Metrics Inc. "It looks like there is a little bit of an uptick, some pent-up demand ... for some discretionary spending."

Yet Perkins cautioned against reading too much into the results. "It is difficult to foresee that really rallying and spiking in the near term," he said.

The International Council of Shopping Centers (ICSC) said it expected overall U.S. same-store sales to rise 1 to 2 percent in April and be flat to up 1 percent in May.

"We suspect that as this year progresses, it will get increasingly better," said Michael Niemira, ICSC's chief economist. "Especially toward the end of the year when you have very easy comparisons."

But for now, the March results pleased investors. The Standard & Poor's Retail Index climbed 4.6 percent, outpacing a 3.8 percent gain in the wider S&P 500 Index.