Trader Talk

June Retail Sales a Pleasant Surprise

June retail comparable store sales were a pleasant surprise, particularly after the dismal showing in May. Highlights:

1) sales better than expected...up 7.2 percent compared to June 2010, according to RetailMetrics, 1.6 percentage points above expectations. 85 percent beat expectations, that is well above the norm of about 60 percent beating expectations and a nice reversal from last month when only 42 percent beat.

2) the better numbers were attributed to improved weather and pent-up demand from poor sales in May;

3) the high end continues to fare well: Saks up 11.9 percent, Nordstrom up almost 8 percent;

4) still widespread discounting...Gap for example had 50-70 percent off sales, some teen retailers had 40-50 percent off sales...that of course implies pressure on margins, but you wouldn't know that looking at the comments...not yet. No one guided lower.

One important point: a lot of retailers no longer report monthly numbers, so this is not a complete picture. One retail stocks trader I regularly speak to noted that of the 60 or so retailers in his universe, only 21 report monthly comps--about 35 percent. That includes the biggest, Wal-Mart , who stopped reporting in April 2009. As far back as five years ago, most did report. Some have been acquired, but you get the point.

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