Retailers Report Strong September Sales

Many U.S. retailers are reporting brisk back-to-school sales for September. Kohl’s and Nordstrom Inc. predict the September boost will be a precursor to the upcoming holiday season.
Overall, 23 U.S. retailers posted an average sales gain of 5.1 percent at stores open at least a year, or same-store sales, according to Thomson Reuters.

“I’m not saying it’s going to be going to an exceptional or a blow-away holiday, but I wonder if people are being overly pessimistic,” Madison Riley, managing director for retail consulting firm Kurt Salmon, said after reviewing retailers’ September reports.

The S&P Retail Index rose 1.3 percent on Thursday, outpacing the broader S&P 500 Index’s 1 percent rise.

Back-to-school shopping is the second largest retail season behind the Thanksgiving-Christmas holiday period. Usually September sales can signal a positive outlook for the holiday retail season.

According to Janet Hoffman, managing director of Accenture’s retail practice, September sales were “positive signals”. She added, “The consumer has done a great job of focusing on their savings, reducing their debt and they are back in the market place, shopping. But they are choosing where they are going to spend their money.”

The National Retail Federation expects November and December sales to rise 2.8 percent after a 5.2 percent gain in 2010. Economists have been somewhat skiddish in their forecasts for the biggest retail season of the year given the high unemployment rate and sluggish economy.

Retailers are reporting they are keeping their inventories lean so they can avoid the deep discounts that shatter their margins. With that said, consumers will need to keep their eyes and pocketbooks open early for the gifts they wish to purchase, or they will find themselves left out this holiday season.

written by Kyle Pinder

Kyle Pinder has has over five years trading and research experience in the large cap space. While still in grad school, Kyle trades daily and keep Active Investor up to date with the latest breaking news coming out of Wall Street and Washington.

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