The SPDR S&P Retail has gained about 6% over the past month. As we head into same-store sales data, what should you expect when the numbers are released, Thursday?
Analysts are calling for an average decline of 1 percent in sales at stores open at least a year, according to Thomson Reuters data.
Though that’s a signal of weakness, such a decline would be the smallest monthly drop since September 2008.
For more than a year, value has been the key proposition for shoppers, and that is unlikely to change soon.
"Anywhere that people feel like they're getting a perceived bargain, that's where people are going to be attracted right now," says Steve Ferrara, a partner in BDO Seidman's retail and consumer product practice.
Discounters TJMaxx and Ross Stores are among the few retailers expected to post increases. Analysts expect high-end stores such as Saks and Nordstrom to report deeper declines than chains with more of a value message, such as Kohl's and JC Penney .
"People are just pulling back in general," adds Patty Edwards of Storehouse Partners and a Fast Money friend.
Once again, analysts expect Abercrombie & Fitch to post the steepest drop of any retailer, at 19.9 percent. However, there are also bright spots expected with Aeropostale and Gymboree likely to profit from back-to-school sales, according to FBR Capital Markets analyst Adrienne Tennant.
What’s the retail trade?
One of my top picks is Macy’s says Citi retail analyst Deborah Weinswig. They’ve taken a localized approach trying to put the right products into the right stores.
And off-mall retailers are continuing to do better than their mall counterparts. I'd look at Target and Kohls .
In the space I like Aeropostale, Gap and The Buckle , adds Joe Terranova.
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