Retailers Bring the Heat this Week

The market will be bombed by earnings from leading retailers this week, with Walmart and Target leading the pack. For my money I would listen to the Abercrombie & Fitch conference call on Wednesday, which may get a bit testy following the stock's 22% November 3 plunge on news of a stark quarter over quarter change in business trends. Hey, analysts don't like egg thrown on their face, so expect them to fire away at the management team. Some general thoughts: •Already getting some warnings on the holiday quarter (Macy's, Nordstrom) but not to the extent the macro headlines would have suggested. Right now I am just not feeling a discount war for the holiday season. •Inventory seems to have been planned rationally (no pre-holiday bulge). •Boots another strong season (still like Decker's Outdoor). •Starting to hear that costs in the first half of 2012 will be nicely lower. •Ticket price increases continuing into the holidays due to inflation earlier in the year. •Specialty retail was hit by the macro developments in August and some did not bounce back (Urban Outfitters). •Consumer has responded better to price increases than many thought possible (this actually began in the summer).