5 retailers thriving in the recession

By Catherine Holahan

Few retailers have proved resistant to this recession. Even big-box discounters such as Wal-Mart Stores (WMT, news, msgs), Target (TGT, news, msgs) and Costco Wholesale (COST, news, msgs) saw weaker sales last month.

Wal-Mart's same-store sales, announced today, were disappointing. The largest U.S. retailer posted a 1.4% sales increase, excluding fuel sales, for the five weeks ending April 3. Though a sales jump is a rare positive for retailers nowadays, analysts had expected a 3.2% increase from Wal-Mart.

Since the recession began, Wal-Mart has thrived by drawing newly thrifty customers away from their regular stores with its relatively low prices. Now it seems that some of Wal-Mart's customers may be shopping at even cheaper stores. That's bad news for retailers generally because it indicates that shoppers have become even more budget conscious.

But amid all the bad news announced this week, there were a handful of stores that posted surprisingly strong March results. Here are five that caught our attention.

Aeropostale

Teen-apparel retailer Aeropostale (ARO, news, msgs) saw sales at existing stores jump 3% in March. That number missed analysts' expectations -- they were betting on 3.9% -- but it looked downright robust in comparison with other teen clothing shops. Teen retailer Wet Seal (WTSLA, news, msgs), for example, posted an 11.4% decline in same-store sales for the same period.

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Aeropostale's overall March performance was even more impressive than its ability to maintain sales growth at its existing stores. The company has grown sales 17% this year and improved its margins. Aeropostale's stock jumped more than 10% by midafternoon today.

Dollar General

Where do people go when they can't afford Wal-Mart?

Apparently Dollar General. The privately held owner of more than 8,400 discount stores says sales are stronger than ever. It's hiring, and it plans to open 450 stores this year.

Family Dollar

Family Dollar Stores (FDO, news, msgs) is another deep discounter that seems to grow stronger the longer this recession drags on, as more strapped shoppers trade down from discount retailers to bargain-bin shops.

The chain's profit jumped 33% in its fiscal second quarter, which ended March 1. Executives attributed the jump to more middle-income consumers coming in the door. Its same-store sales rose 6.4% from the same period a year earlier.

Hot Topic

Thank God for vampires. Sales of merchandise from the vampire romance film "Twilight" helped pump blood into this teen-apparel retailer. Hot Topic (HOTT, news, msgs) reported today that same-store sales grew 7.1% in March, compared with the same period last year.

It attributed the increase primarily to "Twilight" merchandise, including jewelry and T-shirts.

TJX

The owner of bargain stores such as TJ Maxx, Marshalls and HomeGoods saw its same-store sales increase 2% in March. TJX (TJX, news, msgs) executives said the increase exceeded expectations and showed that customers were looking for value.