Discounts & More Setting High Retail Expectations for February Data (LTD, KSS, JCP, CHS, TJX, COST, WMT)

Retail may be getting another good month of numbers for February 2011 if Retail Metrics is correct.  The research firm noted, “Expectations for discounters, department stores, drug chains and specialty apparel all moved higher has analysts February same store sales estimates poured in ahead of Thursday’s reports.”

What is interesting is that some of the estimates may change today and even on Wednesday as the last tweaks to numbers are calculated.  Risk Metrics noted, “The aggregate result was a 40 basis point rise in our Retail Metrics SSS Index to 3.7% projected growth.”

Cited is positive guidance from several retailers along with teh recent earnings reports.  Limited Brands, Inc. (NYSE: LTD), Kohl’s Corporation (NYSE: KSS), J.C. Penney Company, Inc. (NYSE: JCP), Chico’s FAS Inc. (NYSE: CHS), and The TJX Companies, Inc. (NYSE: TJX) were all cited by Retail metrics as having February same store sales ahead of plan and raised expectations.

As far as Kohl’s is concerned, the retail department store would not have initiated a higher dividend than we were calling for if there was risk to its earnings scenario.

TJX is the one we’d be looking for in the discount section because the Retail Metrics data shows that the discount sector likely led the same-store sales with gains of 4.7% versus 2010.  Another leader that was noted was Costco Wholesale Corporation (NADAQ: COST) with an expected 6.6% increase, and Costco is on this week’s earnings calendar.

What is interesting is that this comes at a time whenb gasoline prices have shot higher and when international geopolitical risks have risen that challenge even higher oil prices ahead.  At least the weather was a bit more cooperative in February than in December and January.

Wal-Mart Stores, Inc. (NYSE: WMT) no longer offers monthly sales data, but Retail Metrics is following the world’s largest retailer with a lame outlook of -0.4% in February.

Stay tuned.

JON C. OGG