Welcome to the retail mind game: Both Target and Saks gave cautious guidance on holiday sales.
Target says they are expecting a "highly promotional holiday season." The stock is trading down late morning because they said early November results were creating pressure on top line sales.
Saks says comp store sales in the fourth quarter will be down high single digits, with November particularly weak.
Down high single digits, after last year's disaster? That is not good.
But many retail stock traders remain optimistic—why? One bull messaged me this morning: "Companies have been exceedingly conservative all year. They are not going to deviate from that into the most difficult part of the year."
In other words, under-promise and over-deliver. Bulls are betting that retailers will again announce better than expected numbers when the dust settles in February (most have quarters that end in January).
Well, they could have played "Take This Job and Shove It." During the Chinese banquet which President Hu sponsored for President Obama in Beijing, the Military Band of the Chinese People's Liberation Army played "I Just Called to Say I Love You."
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