Select Winners & Losers Expected in May Retail Sales Data

Retail Metrics is out with its forecasts showing that it still expects that the May 2012 Same Store Sales Index will come in with a gain of 1.7% for the month.  This is effectively the same forecast but it compares to a gain of a difficult 5.5% gain seen in May of 2011.  The report noted that store checks on Saturday showed very solid traffic levels with promotions elevated slightly from prior weeks.

Where this report gets interesting is that the drug store sales are expected to be a drag and the sales outside of that component would be projected to rise by 3.6%.  There is a set up for a possible surprise here as well since analysts have taken a ‘careful approach’ due to the cautious outlook offered by retailers in their latest earnings reports.

The TJX Companies, Inc. (NYSE: TJX) and Ross Stores Inc. (NASDAQ: ROST) were highlighted with slight upticks in the estimates from Retail Metrics.  Kohl’s Corp. (NYSE: KSS) is expected to post show its third negative monthly comparable sales out of the last four months and it is projected to be -0.8%.  The high-end mall retail outlets like Saks Inc. (NYSE: SKS) and Nordstrom Inc. (NYSE: JWN) are expected to be on different ends: Nordstrom is expected to outpace all department stores by 200 basis points with a strong 5.2% rise on top of a difficult 7.4% increase last year. Saks faces a major 20% hurdle from last year and is now forecasted to post a tiny 0.1% gain.

Here are a few standout winners expected from Retail Metrics to show double-digit gains on same store sales:

• Michael Kors Holdings Ltd. (NYSE: KORS) is expected at 34.4%.
• Lululemon Athletica (NASDAQ: LULU) is expected at 21.8%
• Conn’s Inc. (NASDAQ: CONN) is expected at 14.7%.
• Francesca’s Holdings Corporation (NASDAQ: FRAN) is expected at 12.9%.
• Select Comfort Corporation (NASDAQ: SCSS) is expected at 10.0%.

JON C. OGG