Retail industry was slumping few years ago during the period of economic hardship. However, recently, the report from The Wall Street Journal shows that retail sales come in solid in March. “The majority of retail chains, including Costco Wholesale Corp., Macy's Inc. and Limited Brands Inc., reported decent gains for the month at stores open a year or more. Others, including Target Corp., J.C. Penney Co. and Kohl's Corp., posted declines in same-store sales from a year earlier, but the drops were less than analysts projected. Upper-end shoppers continued to show particular strength, with Saks Inc. and Nordstrom Inc. delivering strong results.”(The Wall Street Journal, April.8). In general terms, the retail industry is growing nowadays.
About the stocks, Costco, CVS, ScanSource, and United continental have been the US's hot stocks. William Blair noted that March was the fifth-straight month of average purchases excluding gasoline and currency fluctuations at Costco Wholesale Corp. (COST, $76.41, -$1.41, -1.81%) rising from a year earlier, "which should make it easier for the company to leverage expenses." But Goldman Sachs lowered its stock-investment rating on Costco to neutral from buy as earnings estimates and current stock valuation "fully reflect its strong franchise value, which continues to gain market share as demonstrated by" March's sales strength and outperformance of retail in general for the period.
However, Karen Talley from the Wall Street Journal, predicted that sales in retail industry look like have little spring. "A later Easter holiday and chilled shopper enthusiasm are expected to produce the first monthly drop in same-store sales since August 2009. The chain-store sales results for March, which come out Thursday, likely will spur questions about April's strength.March also saw earthquakes and a tsunami in Japan, which had a direct impact on some retailers that have operations in the country, while curtailing tourist visits—and buying—by Japanese tourists who would have visited the U.S."
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