U.S. retailers posted their best monthly sales performance in February since just before the recession started in 2007, as leaner inventories resulted in more sales at full price. Brian Tunick, managing director and specialty retail analyst at JPMorgan, said he sees consumers continuing to make a comeback.
“It was even stronger than we expected," Tunick told CNBC.
"It was a blowout month and the most interesting thing is in markets that in the past year or two were hurt by housing—particularly California, Florida, and other markets of the West. They really started to pull their weight, so it’s not just the Midwest anymore that’s carrying the load.”
Tunick said the housing data had the highest correlation to the same-store sales figures.
“It looks like the housing market is the main thing that drove the downturn...and now that we’re seeing some of the markets come back, that’s where we’re seeing the biggest lift in sale,” he explained.
“...As housing comes back, there could be more new markets that show a recovery.”
Meanwhile, Tunick said he expects another positive retail month in March as the Easter holiday will likely encourage consumers to spend money.
“Right now, we’ve got two camps out there: The defensive names like TJX and Ross Stores or Aeropostale ,” he said.
“And then you’ve got the offensive camp: Abercrombie, Chico’s, Urban Outfitters—so right now, given the numbers we’re seeing today, clearly, the offensive stocks are the ones that are going to be in favor for the next couple of quarters.”
Jos. A. Bank Clothiers
Abercrombie & Fitch
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Tunick has investment banking clients who own shares of ULTA and LTD.
Tunick does not own shares of URBN, CHS or JOSB.