By  on October 14, 2009

Retail stocks continued to test new highs for the year, rising 0.9 percent Tuesday despite a consumer holiday spending survey that suggested stores still have some tough sledding ahead.

Thirty percent of consumers plan to spend less this holiday season than last year, according to a survey by The NPD Group Inc. That’s an increase from last year, when 26 percent of shoppers were looking at holiday belt tightening.

“Consumers will be looking for the right gift, rather than the most extravagant or expensive one,” said Marshal Cohen, the research group’s chief industry analyst. “That combined with the soft numbers we are up against from holiday last year, and I think we will see [sales] growth, albeit a modest 0.5 percent to 1.5 percent.”

Others have predicted a 1 percent holiday sales drop or no growth compared with last year’s very weak showing.

Cohen said shoppers would be picking up more sweaters, fragrances, music, books, movies and wallets as gifts this year. Forty-nine percent of consumers plan to buy apparel as a gift this holiday season, the same as last year.

Retail stocks might have proven to be a better gift last year than much of what the stores were selling. The S&P Retail Index is ahead 40.1 percent so far this year. The index, which established a new 52-week high of 392.89 during the trading day Tuesday, settled some and ended with a 3.42-point rise to 391.23.

Among the retail gainers were Pacific Sunwear of California Inc., up 5.5 percent to $6.48; Dillard’s Inc., 2.2 percent to $15.08; Saks Inc., 2.1 percent to $6.35, and Chico’s FAS Inc., 2.1 percent to $12.72. Among the stocks to miss the rally was The Buckle Inc., which saw its shares decline 5.1 percent to $33.22.

Investors have flocked to retail stocks this year, in part because layoffs, store closures and other expense cuts stores have implemented are expected to help some chains drive fourth-quarter profits up even if sales fall. Whether stocks can continue to rise in the year ahead without a resumption of top-line growth remains to be seen.

Comparable-store sales for the first week of October rose 0.6 percent, according to a weekly report from the International Council of Shopping Centers and Goldman Sachs.

“Slowly but surely, the underlying sales performance is inching higher,” said Michael Niemira, chief economist at the shopping center trade group, who predicted flat comps in October.

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