Retail Sales Surprisingly Strong In December

by Alyssa Oursler | January 15, 2013 11:46 am

Christmas itself might be over, but some of that holiday cheer is still around.

This morning, news of better-than-expected retail sales came in, showing that consumers were spending despite the then-looming fiscal cliff. In December, retail sales rose 0.5%, handily beating estimates of 0.2%.

Nine of 13 categories showed gains for the month, led by a 1.6% rise at auto dealers[1] (vs. 2.7% the month before) and a 1.4% climb at furniture stores. In fact, Ford (NYSE:F[2]), General Motors (NYSE:GM[3]), Toyota (NYSE:TM[4]) and Fiat’s (PINK:FIATY[5]) Chrysler all posted full-year and December sales growth. U.S. automaker GM’s December sales rose by almost 5%, while Ford’s rose by 1.6%.

Sales excluding automobiles and gasoline gained 0.6%, as they did in November. The back-to-back gains were the strongest in almost a year. Plus, the overall number for November was also revised up to 0.4% from a previous report of 0.3%.

An improving labor market, growth in incomes and discounting by chains like Macy’s (NYSE:M[6]) contributed to the boost in consumer spending, according to Bloomberg[7].

Spending increased 1% at clothing chains and 0.3% at department stores in December. Individual same-store sales were reported earlier in the month[8]. Gap (NYSE:GPS[9]) saw same-store sales rise a better-than-expected 5%, while Ross Stores (NASDAQ:ROST[10]) and TJX Companies (NYSE:TJX[11]) each showed a 6% improvement. Nordstrom (NYSE:JWN[12]) also had a strong holiday season, as same-store sales gained nearly 8% in December.

Of course, it wasn’t all good news, as Limited Brands (NYSE:LTD[13]) and Kohl’s (NYSE:KSS[14]) had less-than-stellar results. Both stocks are still up today, though, on the news of the overall gain in retail sales.

According to Bloomberg, “A boost to household wealth from stock market gains and rising home values also is helping underpin demand.”

Falling gas prices also helped free up cash, as sales dropped 1.6% thanks to a lower price tag. In December, a gallon of gasoline went for $3.30 —  around the same it is today — which is the lowest level in a year or so. The annual price bill for gasoline is also expected to stay low in 2013[15].

For all of 2012, retail sales climbed 5.2%. Let’s take a look at retail stocks moving this morning:



As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.

  1. rise at auto dealers:
  2. F:
  3. GM:
  4. TM:
  5. FIATY:
  6. M:
  7. according to Bloomberg:
  8. reported earlier in the month:
  9. GPS:
  10. ROST:
  11. TJX:
  12. JWN:
  13. LTD:
  14. KSS:
  15. expected to stay low in 2013:
  16. EXPR:
  17. GES:
  18. AEO:
  19. FRAN:
  20. ANF:
  21. ARO:
  22. CWTR:
  23. BODY:
  24. LULU:

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