A bevy of big-time retailers reported January same-store sales numbers on Thursday, and overall, the data were actually very solid. The January measure of sales at stores open at least one year rose 3.3% as measured by the 29 publicly traded retailers tracked by Thomson Reuters. Interestingly, the monthly gain was the strongest since April 2008. The same-store sales figures also blew past analyst expectations calling for a 2.5% increase in the broad measure. They also are much better than they were a year ago, when same-store sales were down 5.7%.
So, does this positive data mean you should dive headlong into retail stocks without a net? No way. In the retail sector, investors need to be just as discriminating with their stock purchases as they are with their actual retail purchases. But which stocks from today’s same-store sales report look like they can run higher and which appear to have run out of steam? Let’s take a look at three of each.
January Same-Store Sales Winners (ANF, GPS, M)
The biggest surprise of all in today’s report was teen apparel retailer Abercrombie & Fitch (ANF). The company posted January same-store sales that increased 8% over the same period a year ago. Estimates from industry research firm Retail Metrics called for a decline of 8.6%. That’s a huge difference over January 2009, when same-store sales were down 20% for the month.
The solid sales for ANF can at least be partially attributed to a gift-card promotion the company ran last year. Customers who spent at least $100 in the store received a $25 gift card that was redeemable until Jan. 30. But even if the same-store sales spike was juiced up by the gift-card promo, it shows that fickle teens are once again embracing ANF’s merchandise, and that bodes well for the retailer in 2010.
Gap (GPS) is another winner in the January retail roundup. The clothing seller said same-store sales numbers increased 5%, besting estimates for an increase of 4.3%. A year ago, January same-store sales were off 23%. Department-store giant Macy’s (M) also bested its same-store sales estimates, with an impressive 3.4% increase vs. estimates for essentially flat January numbers. The January 2009 figure was down 4.5%.
All three of these stocks, ANF, GPS and M, surged in Thursday’s trade, and that’s despite a big sell-off in the broad market.
January Same-Store Sales Losers (DDS, URBN, BKE)
Department store firm Dillard’s (DDS) same-store sales sank 5%, and though this was slightly better than estimates for a decline of 8%, traders didn’t take the news very well. The stock sank big-time immediately following the news. By comparison, a year ago January sales were down 12%.
Eclectic retailer Urban Outfitters (URBN) had same-store sales that were actually up 4%, but those numbers fell short of the Retail Metrics estimate of a rise of 4.9%. In January 2009, sales were down 1%. Traders punished the stock despite the gains, as the numbers were shy of expectations.
The biggest loser in today’s same-store sales report was apparel and footwear retailer Buckle (BKE). The company said same-store sales fell 1.2% in January, which was way off the estimate for a rise in the figure of 4.1%. This January’s figure stands in stark contrast to the same period a year ago, when same-store sales surged 14.7%. As you might expect, BKE shares got slammed on the news.
Now, to be certain, same-store sales figures are only one metric you can use to help gauge the vitality of a specific retailer, and they should in no way be used to make complete investment decisions. Still, great numbers like we saw with Abercrombie, and poor numbers like we saw with Buckle, can provide insight on which retailers are worth browsing at and which ones to avoid.
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