Market Overview

Retail Sales Expected To Confirm Pessimistic Predictions, But It's Not All Bad

Share:
Retail Sales Expected To Confirm Pessimistic Predictions, But It's Not All Bad
Related M
Department Stores Pop On Latest News Of Nordstrom Take-Private Deal
Upcoming Earnings: Retailer Macy's Is On the Docket Early Next Week
Stocks To Watch: Investors Recharge After Soothing Fedspeak (Seeking Alpha)
Related BBY
Dicks Sporting Goods Faces An Unlikely Competitor, Barclays Says
5 Stocks To Watch This Week
Stocks To Watch: Investors Recharge After Soothing Fedspeak (Seeking Alpha)

Retail sales figures from the holiday shopping period are set to be released on Friday, with most analysts expecting to see a 0.1 percent decline in December.

The figure confirms what many have been grumbling about since the New Year began; retailers haven't gotten much out of this year's holiday shopping bonanza.

Slowing Sales

Companies like Best Buy Co Inc (NYSE: BBY) and Macy's, Inc. (NYSE: M) have already reported disappointing sales figures for December, prompting investors to swiftly pull out of their stocks.

While the December slump does prove worrisome for many, some analysts say not to worry too much about it.

Related Link: Credit Suisse Initiates Retail Properties Of America At Outperform

Firms like Best Buy are still working to turn their operations around and January's ultra-low valuations could make now a good time to buy before the shares appreciate. Meanwhile, Macy's was bogged down by inventory management issues, but the company has made plans to free up some cash and improve its margins in the coming year.

Not Bad For All

However, other stores' results suggest that retail sales figures may paint a gloomier picture for retailers than they should. L. Brands Inc (NYSE: LB), the firm behind Victoria's Secret and Bath & Body Works, said this season marked its "best December ever," and Lululemon Athletica inc. (NASDAQ: LULU) recently increased its earnings outlook. These notes of positivity go along with a Gallup poll, which showed that Americans spent an average of $99 per day in December, the highest figure reported over the past six years.

What Gives?

Many believe that retail sales figures are being bogged down by low energy prices and a decline in auto sales. The figures, excluding items like gasoline and cars are expected to rise for the eight months in a row, suggesting that retailers may not have suffered as much as initially believed. While it's true that Americans are choosing to save more, many analysts say they wouldn't count retailers out just yet.

Image Credit: Public Domain

Posted-In: retail retail salesLong Ideas News Previews Economics Markets Trading Ideas Best of Benzinga

 

Related Articles (BBY + LB)

View Comments and Join the Discussion!