By the Numbers
November 9, 2009,
Here's a number: 2.1%.
Over the past 12 months, October was only the third month that showed positive comp growth. The other two: April, up 0.5%, and September, up 0.6%. Next to that pair, 2.1% is pretty colossal. It was, in fact, the best year-over-year comp since July 2008, when comps rose 2.92%.
Here's another number: four. That's the number of retailers who raised their third-quarter earnings forecasts after reviewing October results: TJX, Ross Stores, JCPenney and Jo-Ann Stores.
Speaking of which, TJX posted some fat and sassy home comp increases last month the like of which we've not seen in quite some time. Home comps at TJMaxx/Marshall's were up 14%, and the HomeGoods chain rang up an 18% comp gain. Eighteen percent. I nearly fell out of my chair.
Okay, so we all know tough times favor off-pricers and discounters. But regional department store The Bon-Ton reported comp growth in October of 3.1%. One of three product categories the company cited as strong performers was soft home.
Department store giant Macy's Inc. was not among those showing either a positive comp or raising its forecast, but J.P. Morgan analyst Charles Grom was sufficiently encouraged by what he saw to raise his own forecast for the company's third-quarter and fourth-quarter earnings. Sensing “a significant profit upside,” he boosted his estimate of third-quarter profit to 1 cent per share from an earlier expectation the retailer would lose 5 cents per share. For the fourth quarter, he added 9 cents to his estimate for a per-share prediction of $1.41.
Now, I don't want to go all “irrational exuberance” here. The job situation still stinks, and consumers are still paying down debt. Ahead of the Federal Reserve's announcement of September debt levels as this issue was going to press last week, Thomson Reuters estimated consumer credit fell by $10 billion in September on top of a $12 billion decline in August.
Of course, with credit card companies boosting their rates ahead of new restrictions due to take effect in February, I know more than one person who's trying to bail out of their cards as quickly as they can. Dollars spent paying down debt are dollars that are not being spent at the mall.
But just maybe that light at the end of the tunnel is getting a little brighter.”