Preliminary Data Shows Retail Sales Floundering in June

As far as the real trend, the report shows that the final Saturday sales and traffic looked ‘somewhat soft’ ahead of July 4th promotions. Tropical Storm Debby may have also acted as a small drag at the very end of the month.

Kohl’s Corporation (NYSE: KSS) is expected to drag down the department store sector as the report today noted that it had inadequate inventory this spring.  Its June s-s-s is now 90 basis points lower at -2.5% (negative) for the month.  Retail Metrics noted that even Macy’s Inc. (NYSE: M) was brought down 10 basis points to 2.5% and there was a slight bump higher for Nordstrom Inc. (NYSE: JWN). Some specialty apparel shops are expected to grow more than expected, which included The TJX Companies, Inc. (NYSE: TJX) and Ross Stores Inc. (NASDAQ: ROSS).

We would note a few key issues which may act as a wild card.  For starters gasoline prices at the pump are acting as less of a consumer drag now that many stations in the U.S. are selling gasoline for almost $3.00 per gallon again.  Last year’s June was a high watermark, so the gains this month were already deemed to be ‘hard to hit’ long before.  TS Debby was also not so widespread that it would have a significant impact despite power outages and localized floods.

JON C. OGG