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Retail momentum picks up unexpectedly in June

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Yahoo Finance's Brian Sozzi breaks down how retailers are faring amid the pandemic.

Video Transcript

MYLES UDLAND: All right. Welcome back to Yahoo Finance's. It is Friday morning. We got those better-than-expected retail sales numbers out earlier this morning. And of course, that shines another light on a space Brian Sozzi never takes his eyes off. And that, of course, is the retail sector. Sozz, it's been an interesting couple of months here for retailers, really a reopening play, and continuing to see strength across clothing categories specifically.

BRIAN SOZZI: Yeah. A fun week under the surface-- or somewhat under the radar here in retail, Myles. Certainly, we had the generally upbeat components inside of this morning's retail sales data. But also this week, Abercrombie & Fitch opened its first standalone store under its Gilly Hicks brand. That's their intimate apparel brand. You'll see that store open in their backyard in Easton, Ohio.

Now, this was a brand that was originally launched in 2007. All 30 of its stores were closed in about 2014. They relaunched the brand in 2017 in side-by-side shops within the company's Hollister stores. Now after a quarter where they saw sales up 90% in the first quarter for Gilly Hicks, now they're going to start perhaps opening up more stores again to take the fight to Victoria's Secret and to American Eagle's Aerie intimates brand. Aerie is now over a $1-billion-a-year brand for American Eagle, so I'm sure the folks at Abercrombie & Fitch see an opportunity there as well.

Next up too in this retail recap, I know the retail sales data was generally good. Also good was the credit card and debit card data for most of the banks. And I'm looking at Bank of America right now because I always track a lot of their data. Their total credit and debit spend was up 16.1% quarter over quarter. So a good, positive indication there that there is momentum continuing in consumer land into the summer, slash, all-important fall months for retail.

And last but not least, the Nordstrom big anniversary sale kicked off this week only for Nordstrom loyalty members. Other not loyalty members, such as me-- full disclosure-- I'm not a loyalty member-- will be able to shop that sale very soon. It's their biggest annual sale of the year. All eyes on Wall Street are on how the company does for this particular event. And the stock has been under pressure a little bit here. They have to come out. and nail this event.

Now, I'm talking to Nordstrom's CEO, Eric Nordstrom, at 1:30 PM today. Definitely going to ask him how this sale has started for the company. And then last but not least, a bit of a bonus here-- you look over the past three months-- you have the consumer discretionary retail ETF about up about 4.5%. That's good. The retail ETF, the RTH, up about 4% over the past three months. Target shares alone in the past month up 8%. Very interesting.

JULIE HYMAN: Myles Udland's burning question-- is Nordstrom known for shoes? I don't know. I don't think so.

MYLES UDLAND: Yes.

JULIE HYMAN: Oh, they are? Myles is right.

MYLES UDLAND: OK. See?

BRIAN SOZZI: He is right.

JULIE HYMAN: I think of Nordstrom as being customer service, that that's what they're known for, and their very forgiving return policy for everything.

BRIAN SOZZI: I have to say, they have done a good job buy online, pick up in store. I ordered a necklace for myself. Yes, I'm back to wearing chains again. But nonetheless, I ordered it on nordstron.com. I went to the store. They have a nice section in the shoe department completely carved out. I went in there.

They pulled it off the rack. They said, do you want to try it on? Absolutely, I do. I haven't worn a necklace in about 15 years. Great experience. I'm going to go back to Nordstrom when I get my maybe gold bracelet, because why not?

JULIE HYMAN: You drive in your IROC too? Is that the--

BRIAN SOZZI: I'm just trying to live out my dreams. I'm just trying to live out my dreams, Julie. I can't be on Yahoo Finance Plus every day looking for stock ideas for you guys. Come on.

MYLES UDLAND: I know that the Gen Z kids have really taken to the '80s and '90s aesthetic, but I guess it's also coming back for folks for whom that was [INAUDIBLE].

BRIAN SOZZI: Let me just-- I want to clarify. It's a silver [INAUDIBLE]. It's not gold. It's silver. It's silver.

JULIE HYMAN: OK. All right.

MYLES UDLAND: But a chain-- it's a decision. That's a look. That's a choice. Not everybody-- certainly not me-- not everybody's in a position to pull that off. I will admit in all this, now that we're preparing to go back to the studio, I haven't bought any clothes, and not that excited. But I've started to think about maybe I need to buy some clothes after having really acquired nothing over the last-- other than a house, I've really acquired nothing for the last year.

JULIE HYMAN: You got to keep up with that guy.

BRIAN SOZZI: Your fans, Myles, want to see you in the blue Bonobos coat. I mean, they want you in it.

MYLES UDLAND: It is funny. I mean, when you're at home, it's a little different. The spread between myself and Sozzi in terms of how put-together we look is pretty wide, frankly. I mean, look, I'm like a bum in this dark shirt and whatever. I will close the gap. I think I need to close the gap in studio. Neckties-- not for me. You're just not going to find me in a necktie.

BRIAN SOZZI: I've never seen you in a tie.

MYLES UDLAND: I wore a tie when I interviewed Christine Lagarde, but that's pretty much it. I wore ties at Fed press conference. So central bankers-- but central bank presidents-- I think a regional bank president, I think I might still go with no tie. But if you're a central bank president or the-- I guess Lagarde was with the IMF at the time-- you get a necktie from me. Short of that, I think we're going to go a blazer, no tie. So a preview out there for all the folks when we get our new digs underway next week.