An analysis of companies that report monthly same-store sales by WWD shows little correlation between the sector's monthly results and subsequent stock performance.
WWD examined the monthly comps of retail companies over a 12-month period to find the average monthly comps figure and average stock price movement the day retailers released results.
On Thursday, retailers surprised Wall Street when they reported an average 2.7 percent increase in August same-store sales due to a late start on back-to-school shopping. But stock shifts didn't reflect the results. On average, WWD-surveyed stocks rose only 0.3 percent at market close that day.
The period's high and low marks yield similar results. Thanks to an early Easter bolstering sales, March 2007 posted the largest average year-over-year increase in comps of 7.1 percent, with a majority of company results coming in above year-over-year comparisons and topping Wall Street expectations. Despite the stellar results, stocks showed little response, with an average gain of 0.7 percent the day the results were reported.
Just one month later, retailers posted an average decline in same-store sales of 6.2 percent as March's benefit of an early Easter took share from April sales on top of colder-than-average weather. Stocks reacted modestly, falling an average of just 1 percent the day companies posted results.
Nordstrom Inc., Saks Inc. and Zumiez Inc. were among the period's most consistent reporters of strong same-store sales, with Nordstrom and Saks posting regular double-digit comps growth, while Wilsons The Leather Experts Inc., Hot Topic Inc. and Pacific Sunwear of California Inc. struggled through the interval with consistent negative comps.
Average Monthly Comp
Average Stock Movement*
Consistent Positive SSS
Consistent Negative SSS
*Average Stock Movement calculated from percent change of shares from market close the day before companies reported sss to the closing price of shares the day of reporting sss.
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