Investors can’t wait to get their hands on the latest retail numbers to gauge the health of the consumer and by proxy the rally.
The results have become all the more urgent, considering recent profit reports from P&G and Colgate suggested consumers are less willing to open their wallets.
Are consumers equally reluctant to spend at the mall? The answer is yes…. and no.
Expected Winners
Thursday’s same-store sales numbers will likely show that July's biggest winners were department stores – especially Macy's , Kohl's and JC Penney.
Department stores have succeeded in improving their fashions to draw shoppers and should continue to build on their recent sales gains, says Global Hunter Securities consumer strategist Richard Hastings in a Reuters interview. Penney, Macy's and Kohl's have been particularly adept at building up exclusive lines, he said.
Discounters such as Target and Costco are probably winners too.
They probably got a lift in July from shopping for school supplies, says Jharonne Martis, director of consumer research at Thomson Reuters. And look for strength in Ross Stores and TJX , which runs the TJ Maxx and Marshalls – as consumers return to their frugal ways.
Looking at the sector broadly, analysts expect discount chains' same-store sales will be up 3.9%, and for department stores to report a 4.6% increase.
Potential Losers
The tough economy is also leading many consumers to delay back-to-school shopping until well into August in the hopes of finding good bargains.
That, coupled with a slight overbuild of inventory, could be particularly painful for teen apparel retailers that collectively will show some of the weakest July numbers.
Analysts expect their sales to be up only 2%.
What’s the takeaway?
I wouldn’t read to much into the July numbers, says Robert Samuels of Phoenix Partners. The jury is still very much out when it comes to back to school.
I own TJX, says Karen Finerman. I’m curious to see what they say. And I own Children’s Place.
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Trader disclosure: On Aug 4, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (BAC), (BX), (GOOG), (INTC); Terranova owns (AMZN), (AKAM), (APA), (AGU), (ADBE), (BAX), (BBY), (BMO), (C), (COP), (CVS), (EMC), (FCX), (GOOG), (GS), (JNPR), (JOYG), (KOL), (KR), (MMM), (MOS), (MSFT), (PCP), (PEP), (PFE), (POT), (RIMM), (TER), (SKX), (SU), (UAUA), (WYNN), (XBI); Finerman owns (AAPL); Finerman's firm owns (ARM); Finerman's firm owns (LEA); Finerman & Finerman's firm owns (RIMM); Finerman's firm owns (WMT); Finerman's firm owns (DAN); Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Pete Najarian owns (C); Pete Najarian owns (CTRP); Pete Najarian owns (ALL); Pete Najarian owns (GS); Pete Najarian owns (MGM); Pete Najarian owns (PFE); Pete Najarian owns (RSH); Pete Najarian owns (ETFC)
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