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Shopping For Retail Trades

In the wake of lackluster same-store sales results, should you put any retailers on your radar?

That’s the question many investors are grappling with after the latest data from the International Council of Shopping Centers showed revenue in May was only modestly higher than it was in May 2009 – and that was a terrible month.

The results caught some investors off-guard considering the sector began the year with a solid start.

Citi analyst Deborah Weinswig tell Fast Money that the results underscore both the fragile state of the consumer and the choppiness of the economic recovery.

Department stores and specialty retail were among the hardest hit. J.C. Penney, Abercrombie & Fitch and American Eagle all reported declines in revenue at stores open at least a year.

Costco reported a gain slightly below Wall Street expectations. Gap posted a small gain overall, but its namesake chain in the US saw revenue decline.

And Target said revenue in stores open at least one year rose 1.3 percent in May as consumers came to the cash register more but spent less on each trip.

Among the bright spots were Victoria's Secret parent Limited Brands and T.J. Maxx , both of which reported bigger-than-expected increases.

Cool weather and a quirk in the calendar — a late Memorial Day weekend that hurt May's business but should boost June's figures — didn't help.

How should you play retail, going forward?

I have an hour glass theory on retail, says Weinswig. The far ends of the hour glass such as Saks and Dollar General are the names that are working. Also turnaround stories such as Macy’s are working too, she adds.



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