Financial Professionals

Market Insights

A A A

Retail Same Store Sales

03/01/2012

Consistent with my expectation that the consumer discretionary sector (Figure 1.1) will continue to provide favorable opportunities for investors, the February Same Store Sales report recorded a +6.7% (Fig 1.2).
 
Given the sharp rise in oil prices in February (Figure 1.3), retail’s strength must be highlighted and is the catalyst for Thursday’s market strength.
 
Total Store Sales rose 8.1%, the highest reading reported since last July. Warmer weather, improving domestic labor conditions, and a rising stock market all continue to support the retail sector. High-end consumers, in particular, have their wallets open and credit cards moving. That said, the outperformance relative to expectations is broad based and in defiance of rising gas prices.  
 
•   Apparel rose 6.6%
•   Department stores rose 3.8%
•   Discounters rose 7.5%
 
-  Costco          +8.0%
-   Gap             +4.0%
-  Saks             +6.6%
-  Limited          +8.0%
-  Nordstrom      +10.2%
-  Target            +7.0%
-  TJX                +9.0%
 
Figure 1.1 XLY Consumer Discretionary ETF, July 1, 2011 to Present

Source: Bloomberg
 
Figure 1.2 Same Store Sales March 31, 2008 to Present

Source: Bloomberg
 
Figure 1.3 Oil Prices Year To Date

Source: Bloomberg


Check out Joe Terranova's Economic Indicator Calendar for Insights into Key Economic Indicators and Key Market Events.

Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.