FEBRUARY U.S. RETAIL SALES NOT SIGN OF UPTURN

  U.S. retailers posted stronger than
  expected sales in February, but not enough to prompt analysts
  to change their expectations of sluggish sales growth for the
  first half of 1987.
       "My feeling is that it (February) borrowed some of the
  business we normally see later in the quarter and the real
  strength of general merchandise sales will be in the second
  half of 1987," said Bear Stearns and Co analyst Monroe
  Greenstein.
      "I don't think March will be as strong because Easter falls
  in April this year," said Morgan Stanley analyst Walter Loeb.
     Analysts generally average the sales results of March and
  April to account for the variation of Easter's occurrence.
      Analyst Edward Johnson of Johnson Redbook Associates said
  sales for February rose between six and 6.5 pct, compared to a
  3.6 pct increase last year.
       Analysts noted that February is considered a small,
  transitory month between winter and spring.
      In addition, sales comparisons were boosted by an
  especially soft February last year which was adversely affected
  by severe weather.
      Apparel sales outshone other product groups in sales,
  according to retailers and analysts.
      "February's strong sales reflected a lot of fresh
  merchandise on the shelves and higher consumer income due to
  tax reductions," said Greenstein of Bear Stearns.
      Analysts expect apparel sales to remain good as sales of
  durable and houseware items grow softer due to the continuing
  high levels of consumer debt.
       May Department Stores Co &lt;MAY> and K Mart Corp &lt;KM> were
  among the strong performers, posting comparable store sales
  gains of 9.4 pct and 8.2 pct, respectively. May had an overall
  sales gain of 15.0 pct and K Mart had a 13.1 pct sales gain 
  last month.
      "Favorable consumer response to our merchandise programs
  continued to positively impact our sales comparisons. IN
  addition to the strong contribution by K Mart stores, all our
  specialty retailing companies had excellent February sales,"
  said K Mart chairman Bernard Fauber.
      Sears Roebuck and Co &lt;S> posted a 4.9 pct increase.
  "Domestic sales were led by better than average increases in
  apparel, home fashions and hardware and especially strong
  catalog sales," said Sears chairman Edward Brennan.
      Analysts were a little disappointed by J.C. Penney Co Inc
  &lt;JCP> which started out with especially strong sales early in
  the month. Penney posted a 5.5 pct increase on a comparitive
  store basis and a 5.3 pct gain in overall sales.
      Penney chairman William Howell said, "store sales were
  strongest during the early part of the month, while catalog
  demand was consistently strong throughout the period.
      Store sales activity varied throughout the country, ranging
  from good in the East to weak in the depressed southwest.
      Analysts also said gross profit margins were high as
  retailers were not overly promotional due to leaner inventories
  than a year ago.
      "February is not a big month seasonally but these numbers
  suggest a fairly good trend for consumer spending," said Drexel
  Burnham Lambert analyst Jeff Edelman.
      FEBRUARY SALES FOR MAJOR U.S. RETAILERS
      STORE          PCT      1987       1986
   SEARS             4.9      1.8 BILL   1.8 BILL
   K MART            13.1     1.5 BILL   1.3 BILL
   WAL-MART          44.0     885 MLN    615 MLN
   JC PENNEY         5.3      780 MLN    741 MLN
   FEDERATED         9.6      720 MLN    657 MLN
   MAY               15.0     632 MLN    550 MLN
   DAYTON HUDSON     19.5     602 MLN    504 MLN
   ZAYRE             25.7     327 MLN    260 MLN
   MONTGOMERY WARD   11.1     277 MLN    249 MLN
  

