Retail sales' most robust monthly gain in a year and a look ahead to several of the big-box stores scheduled to report earnings next week are giving investors renewed hope that the consumer hasn't completely shut down.
Following a cascade of dreadful reports from the department store set, which included the worst comparable sales declines that Macy's, Kohl's, Dillard's and Nordstrom have posted since the latest recession, government data showed that retail sales increased a seasonally adjusted 1.3 percent over March. That topped Reuters forecast of 0.8 percent growth.
Notably, even when stripping out automobiles, gasoline and building materials, retail sales still rose 0.9 percent compared with last month. Compared with last year, total retail sales were 3 percent higher on a seasonably adjusted basis, according to the Census Bureau.
The results stood in stark contrast to fear-inducing reports coming out of department stores this week, which were rounded out by J.C. Penney's revenue miss on Friday. And with retailers including TJX, Home Depot and Lowe's on deck to report first-quarter earnings next week, analysts will be looking for further evidence that retail's malaise is more specific to department stores and apparel.
"It is important to remember that this week's updates have been dominated by department stores: a particularly challenged segment of the retail sector, and one with heavy exposure to apparel, which has struggled thanks to unseasonal weather," Neil Saunders, CEO of Conlumino retail research firm, told investors.