Retail Sales Send a Mixed Message: Target Corporation (TGT), The Gap Inc. (GPS), Limited Brands, Inc. (LTD)

Page 1 of 2

Despite overwhelmingly underwhelming sales reports earlier this month, and even as consumer confidence bounces around, and even as long-term unemployment steadily rises, overall retail sales somehow managed to be good. It makes me wish there was a bit of punctuation that was both a period and a question mark. Sales excluding autos and gas rose 0.4% in February, which beat analyst expectations, according to Bloomberg. That increase came on the back of a small increase in January and is being heralded as showing the “underlying strength ” in the economy.

Target (TGT)Not surprisingly, investors are yet to be impressed. After more than a week of rallying, it seems that it takes more than a slightly positive outlook to get retail stocks to budge. The Gap Inc. (NYSE:GPS) , Target Corporation (NYSE:TGT) , and Michael Kors were all just ahead on the day, while Limited Brands, Inc. (NYSE:LTD) and Williams-Sonoma, Inc. (NYSE:WSM) were down.

The befuddlement of the market poses the question, “Do macroeconomic trends mean anything anymore?”

The confusion of the market
Often, these sorts of reports will move one end of the retail stock market, pushing luxury goods or apparel up, for instance. That’s not the case today, as the contrast between Kors and Williams-Sonoma, or The Gap Inc. (NYSE:GPS) and Limited Brands, Inc. (NYSE:LTD), highlights. Today, everyone is just out there trading as if nothing new has happened. In a sense, that’s what’s driving the confusion in the market — nothing new has happened. February sales figures are in the past, and most companies have already reported on those sales if they’re going to.

The Gap Inc. (NYSE:GPS) and Limited Brands, Inc. (NYSE:LTD) both had 3% increases in comparable sales in February, with both brands continuing strong runs. The new retail report won’t change those already reported outcomes, nor will it affect the softness in consumer sales in China that dragged down Kors earlier this week. But that doesn’t mean that investors should completely ignore these reports, as they provide an insight into future growth.

What’s coming up next?
February’s report included a revised forecast for U.S. spending over the next quarter, and suggested that it was going to be stronger than anticipated. That growth is going to be driven by an increase in inventories that analysts expect will fuel sales. The dramatic increase — the largest since 1995 — is certainly evidence of optimism from businesses, though it remains to be seen if that optimism is justified.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!