Trader Talk

Retailers Rebound

Robert Hum, CNBC Producer

Bob Pisani is off, this post was written by CNBC producer Robert Hum.

Markets overseas fell in Thursday trading, with China’s Shanghai Composite falling nearly 2 percent for its biggest drop in nearly 2 weeks. This came as China’s central bank made a surprising short-term tightening move by raising rates on its 3-month bills for the first time in over 4 months.

While stock futures moved little following this morning’s slightly better-than-expected weekly jobless claims report, stocks opened slightly lower, as commodity stocks paced the decline following the news in China.

After a poor start to Q4 – with disappointing October and November sales – retailers are turning in strong December sales reports. Boosted by solid holiday spending, most retailers topped analysts’ same-store sales forecasts, citing improved traffic throughout the month.

Another trend this morning: after proceeding with much caution earlier in the quarter, a broad range of retailers have boosted earnings guidance as a result of the stronger December sales and significant improvement margins. Among the names: Limited, TJX, Aeropostale, Macy’s, Nordstrom, and Kohl’s.

Rocking Retailers

The bottom line: retailers saw higher traffic this holiday season and managed inventories better. Sales improved as retailers avoided repeating the very strong promotional activity and extreme, deep discounting strategies they implemented during the holiday season last year.


Lennar is up 6 percent after reporting a smaller-than-expected loss (excluding items) of $0.26 (vs. loss of $0.48 consensus).

Good news: cancellation rate improved from 32 percent to 20 percent. Also CEO Stuart Miller noted that the homebuilder saw its first year-over-year increase in new orders in 3 years. Bad news: average sales prices failed to gain momentum, dipping 9.2 percent.



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