What Has Retailers Smiling This Morning?
It would seem retailers have benefited from rising consumer confidence, as many have reported February sales numbers today that beat expectations. Victoria’s Secret parent Limited Brands (NYSE:LTD) is one of those companies, reporting an 8 percent jump in sales last month, compared to a year earlier. Analysts’ average forecast was for a 6.2 percent gain, according to data compiled by Thomson Reuters.
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Six retailers have already reported results that beat expectations this morning, including Stage Stores (NYSE:SSI), The Buckle (NYSE:BKE), and Zumiez (NASDAQ:ZUMZ). Analysts attribute improved same-store sales figures to higher consumer confidence, and predict same-store sales will be up 3.4 percent for the 21 companies tracked by Thomson Reuters’ same-store sales index. Other chains, including Macy’s (NYSE:M), Kohl’s (NYSE:KSS), and Target (NYSE:TGT), won’t report until later on Thursday morning.
But the rising price of gasoline could soon dampen consumer spending. As of Thursday, the average cost of a gallon of gas in the United States was up to $3.74, about 34 cents more than a year earlier, according to the American Automobile Association. Though Costco (NASDAQ:COST) said Wednesday that same-store sales were up 8 percent in February, outpacing the 7.6 percent rise analysts had expected, much of the warehouse club chain’s gains have been the result of shoppers seeking cheaper gasoline.
Still, the national unemployment rate has continued to decline month after month, and recent data has shown improvements in the housing sector. U.S. stock markets have rallied since the beginning of the year, reaching the highest levels this week since the May 2008 financial meltdown. The rally has proved a boon for upscale chains like Saks (NYSE:SKS) and Nordstrom (NYSE:JWN) in recent months.
Wet Seal (NASDAQ:WTSLA) was one of the few chains reporting a decline in sales this morning, but the 5.8 percent decrease was still less than expected. Pier 1 Imports (NYSE:PIR) said its same-store sales for the full holiday quarter rose 10.3 percent.
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