Retail comps were better than expectations this morning. As we warned during the holiday season, many retailers lowered their profit forecasts, blaming rising costs (thank goodness there is no inflation!), aggressive discounting, and an inability to pass along price increases.
Most stores were in line. Wal-Mart lowered their range for February, but I am not reading to much into that, as the post holiday gift card season ends. February is one of those odd months — after the Winter clothing shopping season, but before spring shopping.
The WSJ noted:
"January caps the all-important fiscal fourth quarter for
retailers, and the increased use of gift cards has raised its profile on the
retail calendar during the past few years. Still, it remains a relatively
unimportant month for the industry, accounting for 10% to 15% of the quarter’s
Same-store sales are a key indicator of overall U.S.
consumer-spending trends, but the reports also miss many online purchases and
other kinds of retail spending. What’s more, not all major chains report sales
on a monthly basis, particularly hard-goods retailers such as Home Depot Inc., Best Buy Co. and Bed Bath & Beyond Inc., which only report sales quarterly."
Balmy Weather, Gift Cards Helped Warm Retail Sales
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
February 2, 2006 8:48 a.m.