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 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

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!