Retailers At The Mercy Of Mother Earth As Weather Forecasts Call For Warm Winter, Cold Spring

Michael Binetti, a retail analyst at UBS, spoke with Bill Kirk (CEO and Co-Founder of Weather Trends International) to better gauge which retailers are in a position to succeed or fail.

Kirk is calling for one of the largest year-over-year winter temperature declines and a very cold winter will now lap the warmest winter on record. In addition, December could prove to be very cold and dry and this could be favorable for traffic and drive seasonal sales.

"We think normalized selling patterns of these categories vs dismal trends last year should be a broad-based positive for retail," the analyst wrote. "The only partial offset to call out will be discretionary spending headwinds
from higher heating bills. Overall, we see a positive setup for retail this holiday."

Binetti highlighted VF Corp VFC, Under Armour Inc UA and Columbia Sportswear Company COLM as being "cold weather-sensitive brands." However, the severity of the expected weather drop should "drive a broad-based lift" to department stores.

In the meantime, warm weather is expected to continue over the next few months and this could give a boost to Home Depot Inc HD and Lowe's Companies, Inc. LOW as consumers can work on outdoor projects for longer periods of time.