Holiday Sales Were Up, But Low Prices Might Take Their Toll on Retailers

While 2011 holiday sales were up, it’s not safe to celebrate an economic comeback quite yet. FBR Capital Markets analyst Anna Andreeva points out that slashing prices to attract shoppers would certainly hurt profit margins of many retailers (NYSEARCA:XRT).

Barron’s quoted a note that Andreeva read, which said, “While traffic levels seemed strong, more than ever consumer shops were on sale, and inventory levels in the channel continue to look elevated. Despite easier comparisons, we think December, to date, has decelerated versus a very strong November for retailers (we think Black Friday was the peak, and mall traffic levels have been running in the negative 1% to negative 3% range since then).”

Andreeva also continued by noting that unseasonably warm weather has also hurt outerwear and sweater sales, particularly in the Northeast. She was concerned about the implications of a 70% after-Christmas sale at retailer Aeropostale (NYSE:ARO) and also thought Children’s Place (NASDAQ:PLCE) might be in the same margin-shrinking boat.  Who were the winners?  Andreeva seemed impressed by American Eagle Outfitters (NYSE:AEO) and Abercrombie and Fitch (NYSE:ANF).

Here’s how these hot retailers are reacting to incoming holiday sales data:

Buckle Inc. (NYSE:BKE): BKE shares recently traded at $40.78, up $0.33, or 0.82%. They have traded in a 52-week range of $33.97 to $47.97. Volume today was 115,822 shares versus a 3-month average volume of 501,778 shares. The company’s trailing P/E is 13.29, while trailing earnings are $3.07 per share.

Urban Outfitters Inc. (NASDAQ:URBN): URBN shares recently traded at $27.60, up $0.38, or 1.4%. They have traded in a 52-week range of $21.47 to $39.26. Volume today was 583,326 shares versus a 3-month average volume of 3,435,250 shares. The company’s trailing P/E is 20.35, while trailing earnings are $1.36 per share.

American Eagle Outfitters, Inc. (NYSE:AEO): AEO shares recently traded at $15.32, up $0.14, or 0.92%. They have traded in a 52-week range of $10.00 to $16.37. Volume today was 612,690 shares versus a 3-month average volume of 3,867,120 shares. The company’s trailing P/E is 15.99, while trailing earnings are $0.96 per share.

Aeropostale, Inc. (NYSE:ARO): ARO shares recently traded at $15.39, up $0.04, or 0.26%. They have traded in a 52-week range of $9.16 to $26.83. Volume today was 426,063 shares versus a 3-month average volume of 3,190,900 shares. The company’s trailing P/E is 10.17, while trailing earnings are $1.51 per share.

Pacific Sunwear of California Inc. (NASDAQ:PSUN): PSUN shares recently traded at $1.66,. They have traded in a 52-week range of $1.11 to $5.70. Volume today was 133,412 shares versus a 3-month average volume of 809,933 shares. The company’s trailing earnings are $-1.56 per share.

Gap Inc. (NYSE:GPS): GPS shares recently traded at $18.79, down $0.11, or 0.58%. They have traded in a 52-week range of $15.08 to $23.73. Volume today was 830,819 shares versus a 3-month average volume of 5,623,810 shares. The company’s trailing P/E is 10.82, while trailing earnings are $1.74 per share.

Zumiez, Inc. (NASDAQ:ZUMZ): ZUMZ shares recently traded at $28.16, up $0.27, or 0.97%. They have traded in a 52-week range of $15.85 to $30.90. Volume today was 78,618 shares versus a 3-month average volume of 494,803 shares. The company’s trailing P/E is 25.93, while trailing earnings are $1.09 per share.