Mizuho Securities: December Retail Sales Improved As Month Progressed

Betty Chen of Mizuho Securities commented in a note on Monday that December retail sales likely improved as the month progressed but were still below expectations.

“Importantly, traffic remained soft (ShopperTrak reported flattish Super Saturday sales), forcing retailers to dial-up promotional activity to entice customers,” Chen wrote. “Despite comScore citing 15 percent growth in online sales from 11/1-12/21, we note DTC only represents approximately 13 percent of sales for our covered companies and may be insufficient to offset the retail shortfall.”

Chen believes that Gap Inc GPS, L Brands Inc LB, Lululemon Athletica inc. LULU, Childrens Place Inc PLCE, Pacific Sunwear of California, Inc. PSUN, Tilly's Inc TLYS and Zumiez Inc. ZUMZ may provide positive color around its holiday sales trends following a “solid” November and Black Friday results.

On the other hand, Express, Inc. EXPR and Francesca's Holdings Corp FRAN may deliver “disappointing” results relative to consensus expectations.