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UPDATE: Thursday’s Same-Store Sales To Move Market?

Wednesday, 7 Jul 2010 | 5:40 PM ET

Predictions are skewing positive, so how should you game retail ahead of the all-important same-store sales figures coming Thursday?

According to Reuters estimates, retail sales are expected to rise 3.3% in June due to warm weather and promotions tied to Father's Day and the Memorial Day weekend.

Analyze This: Behind the Rally
Consumer shares surge ahead of June sales. Insight with Rob Samuels, Phoenix Partners Group.

Department stores such as Kohl's and Nordstrom are expected to post some of the largest sales gains, after having some of the biggest declines last year, according to Thomson Reuters.

While a June increase would mark the tenth consecutive month of rising sales after a year of declines, some analysts warn that the trend may not be as bullish as it appears.

Strong June sales could “mask an underlying weakness in consumer spending that will come into sharper focus in the next few months," says Bryan Eshelman of AlixPartners in a Reuters interview.

"The fundamentals are just not adding up to a recovery," he adds.

On Tuesday’s Fast Money Citi analyst Deborah Weinswig told us that she cut her price targets on a slew of stocks including Home Depot, J.C. Penney, and more to reflect a more conservative outlook.

"The consumer went on a shopping binge in the first quarter of 2010 and the subsequent hangover has set in," she said. "A challenging macro environment, lack of fashion and difficult comparisons" present challenges for the sector.

What’s the trade?

There is a glimmer of good news. Most of the bad news mentioned above is already priced into the retailers, according to Rob Samuels of Phoenix Partners.

In fact he suggests 3 bullish retails trades. They follow:

Finish Line : "They're benefiting from everything going on in the athletic footwear cycle and they have a great balance sheet," he says.

Urban Outfitters : "The company has tremendous growth opportunities in the US and abroad," explains Sanuels.

Abercrombie & Fitch "Given the potential as a margin recovery story...below $30 it may be interesting. It was a $51 stock in April." he says.


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Trader disclosure: On July 7, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; inerman and Finerman’s Firm owns (AAPL); Finerman’s Firm owns (AEO); Finermans’ Firm owns (ANF); Finerman’s Firm owns (BAC) stock and calls; Finerman and Finerman’s Firm own (BAC) preferred; Finerman and Finerman’s Firm owns (BBY); Finerman owns (BP) calls; Finerman and Finerman’s Firm owns (C); Finerman and Finerman’s Firm own (CVS); Finerman owns (GLW); Finerman & Finerman’s Firm owns (GOOG); Finerman & Finerman’s Firm owns (HPQ); Finerman & Finerman’s Firm owns (IBM); Finerman & Finerman’s Firm owns (JPM) stock & calls ; Finerman’s firm owns (PM); Finerman’s Firm owns (RIG); Finerman’s Firm owns (TGT); Finerman’s Firm owns (WMT); Finerman’s Firm is short (IJR); Finerman’s Firm is short (IWM); Finerman’s Firm is short (MOY); Finerman’s Firm is short (SPY); Kelly Owns (BP) Puts; Kelly Is Short (GS);Terranova Owns (BAC), (MRVL), (MYL), (MON), (APC), (GMCR), (AXP), (TER), (XCO), (GOOG), (AMZN), (GS), (CVS), (ABT), (HES), (ADI), (ADBE), (AKAM), (EMC); Seymour owns (AAPL), (BAC), (GOOG), (INTC), (POT), (WBD); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck

For Joe Terranova:
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Terranova is chief market strategist of Virtus Investment Partners, LTD.
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For Brian Kelly:
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Accounts managed by Kanundrum Capital own Treasuries
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Accounts managed by Kanundrum Capital ARE short (XLF)
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Accounts managed by Kanundrum Capital ARE short (FCX)
Accounts managed by Kanundrum Capital ARE short (GFI)
Accounts managed by Kanundrum Capital ARE short (JOYG)
Accounts managed by Kanundrum Capital ARE short (XLB)
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Doug Kass
**No Disclosures**

Gary Shilling
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Rob Samuels
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Heather Bellini
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Mike Khouw
Cantor Fitzgerald makes a market in (CSX)


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