By  on April 6, 2009

Retail stocks rose 5.8 percent last week, supported by readings of consumer confidence and the job market that were negative, but no worse than feared.

The same kind of proportionality — if retailers are lucky — could apply to comparable-store sales reports this Thursday. Some chains are expected to show signs of stabilization in March, as well as a benefit from the timing of Easter, and even if the numbers aren’t actually good, the absence of downright bad results might be enough to send stocks higher.

Citigroup equity analyst Deborah Weinswig predicted comps at broadline retailers increased 1.2 percent in March versus a 0.3 percent rise a year ago.

“We believe favorable weather, pent-up demand, continued promotional activity and tax refund distributions spurred sales of spring merchandise,” said Weinswig, noting Wal-Mart Stores Inc., J.C. Penney Co. Inc. and Kohl’s Corp. are most likely to turn in better-than-expected results.

Standard & Poor’s equity research group also saw cause for some optimism. “We are seeing less discounting at Macy’s this spring versus last fall-winter,” said S&P. “Firmer pricing implies to us that customer spending levels, while still down year-over-year, have potentially stabilized.”

Another week of stock increases would help solidify an upswing that has sparked hopes, however faint, that some sort of a bottom has been reached.

On Friday, the S&P Retail Index advanced 1.2 percent, or 3.74 points, to end the week at 314.17. Retail stocks are up 40.8 percent from their March 6 low. The Dow Jones Industrial Average on Friday registered a rise of 0.5 percent, or 39.51 points, to 8,017.59, marking a 3.1 percent increase for the week and guaranteeing at least a weekend stay above the 8,000 level.

Last week, the Conference Board said consumer confidence remained at all-time lows for March and the unemployment rate also hit a 25-year high of 8.5 percent, about what economists had predicted.

Jeweler Zale Corp. enjoyed a dramatic rise in its stock, which increased 48 percent to $4.16 on Friday and was ahead 77 percent for the week after a series of investor meetings.

David Sternblitz, Zale’s vice president and treasurer, said, “There’s more recognition from the investment community that we will be a survivor in the jewelry industry as things consolidate. We are taking a number of steps in terms of managing our inventory, our expenses, looking at our real estate portfolio to prepare us to capture market share as the environment improves.”

Off-pricer TJX Cos. Inc. also caught the attention of Wall Street. RBC Capital Markets analyst Howard Tubin initiated coverage of the company, giving its shares a rating of outperform with a target price of $31. The stock closed up 2.1 percent Friday at $26.68 and was ahead 0.5 percent for the week.

“Better positioned players in the off-price channel will continue to outperform their department store peers,” Tubin said. “The channel is likely gaining new customers as the consumer continues to show a laser focus on ‘value.’”

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