Related:
AEO,
ANF,
ARO,
GPS,
JCP,
JWN,
KSS,
LTD,
M,
ROST,
TGT,
TJX
The month of February provided much optimism for the retail segment, as U.S. retailers posted their best monthly sales performance since just before the recession started in 2007. Three-quarters of the 28 retailers in the Thomson Reuters index beat expectations, with the index’s same store sales up 4% in February, compared with expectations for a 2.9% rise. It seems that people are not too busy tending to their budget to go out to splash $200 on a pair of jeans at Nordstrom (JWN), or a set of jewelry at Tiffany (TIF) to please the loved ones. After all, Valentine’s Day falls in the month of February. It seems, too, that teenagers did not want to be left behind with the spending spree, helping boost sales at Abercrombie & Fitch, American Eagle Outfitters and Aeropostale. While some were quick to point out a recovery in consumer spending, others were more cautious in assessing how much of a recovery has been priced in retail stocks. First, while the positive comps growth of most retailers is pleasing, it came as a result of easy comparisons, with the base period comps down 4.7%. Second, tax refund checks are either making its way to tax-payers’ mailboxes, or have already made its way to cash registers at the shopping malls. With refund checks being sent out as early as the end of January, it is safe to assume that some of these checks contribute to the comps growth. Therefore, the question that remains is, when comparison normalizes and tax refund fades, what is the sustainable growth for the country’s retailers?