JP Morgan's Brian Tunick and Deutsche Bank's Charles Grom are offering their previews of the May chain-store sales results, which come out on Thursday.
According to Tunick, retail sales probably continued to strengthen at a steady clip this May.
In a note to clients this morning, Tunick points out that the last ten quarters have boasted same store sales growth of 5 percent or better, and sees that trend continuing.
With 80% of our companies having reported Q1 results, we estimate Q1 comps for our group were up 6% on top of 6% comps LY. More impressively, this would mark the tenth straight quarter in a row that comps for the 23 specialty retailers in our universe have been up at least 5%. So beginning in Q4 of 2009, the US consumer has continued to spend—obviously there have market share winners and losers over that time frame, just as some categories have gained share of wallet while others have lost.
Deutsche Bank's Grom also weighed in this morning, highlighting the slew of comments made by companies like Target, Dollar Tree, Foot Locker, Saks, Macy's, and PVH that all portend a better consumer state.
But that comes with a caveat, he says. Tiffany recently missed earnings expectations and cut guidance as sales slowed in the Americas, "including its NY Flagship with tourism trends now flattish and macro fears becoming more of a drag at the high end."
The pace of sales like accelerated over the month of May, after a relatively weak start. He blames that on a late Mother's Day and cool weather on the East Coast.
In terms of weekly cadence during the month of May, our channel checks along with data sources like ICSC/Redbook, suggest that the first week of May was the weakest, with Mother’s Day one week later this year versus last. The holiday shift benefited foot traffic in week 2 followed by favorable weather in week 3 (+6.6F warmer YOY) leading to solid seasonal sell-through. Week 4 was mixed, in our opinion, with the West Coast experiencing warm temperatures, but cooler/wetter conditions along the East Coast. All told, we believe the month finished stronger during the second half than it began.
Below, Wall Street's consensus for May sales:
- Buckle (BKE): May '12 S/S Up 4.2 Percent
- Gap (GPS): May '12 S/S Up 2.9 Percent
- Limited Brands (LTD): May '12 S/S Up 5.6 Percent
- Ross Stores (ROST): May '12 S/S Up 3.9 Percent
- TJX (TJX): May '12 S/S Up 3.7 Percent
- Zumiez (ZUMZ): May '12 S/S Up 6.3 Percent
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