According to Channel Advisors, Amazon (AMZN) posted the equivalent of a 34% gain in same-store-sales for June. If true, and true “comps” are a little fuzzy when it comes to measuring results at a retailer without actual stores, it marks a stunning growth rate compared to the conventional brick and mortar plays.
According to OptionMonster.com’s Jon Najarian the news is great for Amazon but it hardly puts to bed stubborn concerns regarding consumers. In the attached clip Najarian says he’d want to be long puts on just about any retailer going into earnings next month, despite expecting Amazon to continue to “crush it” in terms of sales.
Related: America is facing a retail funk
Just how much of an outlier is Amazon? For the sake of comparison consider that Amazon and Target (TGT) are roughly the same size in terms of 2013 revenues. While Target hasn’t yet announced comps for the second quarter analysts would be thrilled with anything better than the flat results seen at Walmart (WMT). If Target posts even mild gains like the mid-single digit growth seen at CostCo (COST) analysts would consider it an unqualified triumph. At Amazon the news was a slight acceleration from what was seen in May. Pretty much business as usual, in other words.
Amazon’s blow-out adds a wrinkle to conventional view that the consumer is in a funk (to borrow a phrase from the CEO of the Container Store (TCS). While Lumber Liquidators (LL), Gap (GPS) and Walmart make a compelling argument that shoppers have gotten more conservative it’s belied by the fact that auto sales are at post-recession highs and select results from retailers on the higher and lower ends of the spectrum.
It’s not that hard to avoid the conventional wisdom traps for investors. The trick is to remember this historical truth regarding merchants: bad weather and tough economies somehow find a way to hit weak retailers the hardest. This economic recovery while robust by many measures hasn’t been strong enough to bring spending back to where it was. As long as stocks like Lumber Liquidators can plunge 20% on weak sales it’s a safe bet there’s more risk than you think in being long specialty retail shares.
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