Goldman Sachs’ Broadline Retail Update (WMT, FDO, JNY, SKS)

Goldman Sachs is out with a research report this morning, where it takes a look at the recent performance of the broadline retailers in Q2. They noted several key points, including: 1. Broadlines Q2 EPS ushered in expense driven beats and lowered guidance, compared to Q1’s margin drive beats and upward guidance revisions. 2. Rain or Shine Index indicates that August was 26% drier and 2% warmer than last year. 3. Wal-Mart’s

pricing gap showing some stabilization, settling in at 299 bp, after last month’s regional phenomenon. 4. Promotional e-mail growth picked up at department stores, +21% as inventories began to build post Q2. 5. In Retail Forward’s spending survey, respondents grew less bearish as only 32% plan to spend less, while 60% plan to hold spend constant. 6. Broadlines’ stock short interest is up 1% compared to five-year averages but up 14% month over month with Family Dollar Stores

, Jones Apparel Group

, and Saks Inc.

sitting well above five-year averages.