October 4, 2012
Now I know that everyone is talking about the debate—what with all of the Big Bird comments and speculation about how each candidates' performance will impact votes—but I'm not going to take the bait. While I'm keeping the Presidential Election at the top of my radar, the most important factor for us as investors today is the health of the American consumer.
As my readers on the East Coast prepare for what could be a snowier-than-usual winter, I'm battening the hatches for the flurry of consumer spending that comes in with the holidays. And after the latest same-store sales data from 17 of the nation's top retailers, the analyst community still believes that it will be a merry holiday shopping season indeed.
In September, these retailers reported a 3.6% increase in same-store sales, namely total revenue from stores open at least a year. This matched analyst expectations. September's results represent a slowdown from August, but given that this is the pause between back-to-school season and the holidays, that's to be expected.
Several key retailers beat expectations:
Of course, consumers are still picky about where they put their money. So not all retailers were able to live up to expectations in September:
The good news is that not even these misses could deter analysts from believing that the holiday season will bring strong retail sales. Historically, there isn't a correlation between September sales and those later in the year and with consumer confidence at a seven-month high we very well could see American consumers become more generous with their holiday gift giving.
So while most investors are digesting the results of last night's debate, I want you to keep this trend in the forefront of your mind. I believe that this, even more so than the Presidential Election, could be Wall Street's next catalyst after earnings season.