Whether it is the overly pessimistic downward revised estimates, or the rather sudden subsiding raw material and gasoline prices, or the unusually dry and hot weather, most retailers reported same store sales that beat analysts' estimates.
Luxury and Strong Brand
Leading the way were luxury and strong brand name retailers. Luxury departmental stores such as Neiman Marcus and Saks 5th Ave (SKS), strong brand superstore such as Costco (COST) and women's clothes, Limited Brands (LTD) whose flagship lingerie stores, Victoria's Secrets reaped a 17% rise in same store sales, all reported double digit same store sales growth.
Teenager brands such as Abercrombie and Fitch (ANF), Aeropostle (ARO), American Eagles (AEO) no longer provide monthly same store sales figures while Buckles reported a 10.4% same store sales growth.
ALL GOOD FROM NOW OR JUST AN ADJUSTMENT OVERDONE?
Just a little over a month ago, shares of retailers, especially apparel and shoe makers were beaten down on costs pressure and profit margin squeeze brought by record raw material prices (leather, cotton,etc) and rising gasoline prices that kept shoppers at home.
Commodity and energy prices went through almost a month of correction. International Energy Association (IEA) together with Obama's administration gave energy prices an ultimatum by releasing strategic petroleum reserves，an unusual move given the circumstances but a strong signal of the authorities's determination to stop the energy and commodity rally. The market got the hint. Analysts very soon picked up optimism as gasoline and cotton prices retreated.
However, as many retailers getting ready to hike their products' prices, some as much as 10-15% to pass on higher costs, will the relief in gasoline and raw material prices be enough and in time to score a good report card for retailers in the summer?
Disclosure: The author does not own any of the above mentioned position in her personal account as of July 7, 2011