Today's same store sales reports were largely above expectations, surprising investors and leading to substantial gains in many retail stocks. The most evident thing in today's same store sales numbers is that there are several companies doing extremely well in this environment as well as several doing very poorly. There seems to be very little middle ground right now, as it seems consumers are deciding in massive waves which stores to shop at. Let's take a look at some winners and losers from the May same store sales numbers:
Winners
- The Buckle (NYSE:BKE) I know this one isn't too well known, but it deserves some great recognition after reporting a jump of 35%. This company has been absolutely on fire, with each of this year's monthly reports showing growth of at least 19%. Stunning indeed. The stock rose 3.67% today.
- Children's Place (Nasdaq:PLCE) They were expected to report a jump of 4.3%, but instead showed gains of 10% from last year. The stock jumped higher by 6.55% today.
- WalMart (NYSE:WMT) The high-end of estimates for WMT was a gain of 2%, but the company beat expectations soundly, reporting 3.9% sales growth. Interestingly, home goods sales even rose for the first time in over two years. The stock jumped 3.68% and hit a new 52 week high today.
- Nordstrom (NYSE:JWN) Comps rose 10.9% in May, but the company said that June will be a very different story. They expect June sales to be down 20%. The stock inched higher by 1.22%.
Losers
- The Gap (NYSE:GPS) Once again GPS missed even the most pessimistic estimates from analysts. Sales fell 14.5% vs. an expected decline of 9%. Old Navy continues to kill the company, sales there plunged 25% year over year.
- Aeropostale (NYSE:ARO) This one is a victim of high expectations. The stock has done excellent and investors wanted a lot, but ARO only met analysts expectations of a 6% increase and its stock fell 2.61%.
- Limited Brands (NYSE:LTD) May comps fell 6% and the company also spoke negatively about their June numbers.
On the whole the retail sales number surprised to the upside today. The market responded very positively as many had thought April's decent numbers were simply a fluke. June and July numbers will likely continue to see some help from the stimulus checks, but they also are tougher comparisons than April and May have been.
The longevity of this consumer spending rebound isn't known, but if the consumer can continue to hold up then the terrible recession that many feared will likely not show up in 2008. How much of these gains are from stimulus payments and how much of them are sustainable? Only time will tell.
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