Tuesday, March 2, 2010

Retail February Sales Preview

Department Stores: Despite the winter snowstorms in February, we forecast ~100 bps of acceleration in the 2-yr comp trend for the department store average on a sequential basis. January was hurt by low levels of clearance inventory. We see the greatest degree of out-performance vs. consensus expectations at the high-end (SKS, JWN). Across the mid-tier department store space, key to watch for will be comp store sales performance at JCP given the company’s changed strategy in 2010 (i.e. focusing on top-line growth rather than gross margin gains), traffic trends at KSS (with transactions per store up for 8 of the past 9 months), and evidence of continued traction in Macy’s localization initiatives.

Specialty Apparel: For specialty retailers, we forecast 160 bps of acceleration in 2 yr comp store sales trends, on average, with 300+ bps of pickup coming from LTD and AEO.

Off-Price Retailers: Despite facing some of the most difficult comparisons across the Softlines space in February, we expect off-price retailers to continue to post strong monthly comp results.

February Sales Preview

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