A Piece of Good News and a Lot of Consumer Spending...
April 20 2010 - 7:48AM
Marketwired
www.rothmanresearch.com -- One can tell when spring is here, as
snow starts to melt and sprouts start forcing their way out. It
would seem that parallel to the season, economic recovery in the
U.S. is taking the same analogy. These last two years have seen the
worst economic blizzard since the end of the last world war, but
since the last few weeks, here and there proof of an economic
recovery is sprouting, increasing consumer confidence in the
overall market which relates to an increase in spending. For
retailers, consumer spending is the golden bell to wake up to and
what has been quite extraordinary regarding the recent increase in
consumer spending is that it is defying the norm, growing in a
climate of elevated unemployment. "It looks like the people have
had enough of staying quartered in their homes... they want to go
out and they want to shop, even if it is frugal spending at this
point. It is clear that the past month has seen an increase in mall
traffic which has benefitted many retailers, one of which has been
Chico's FAS Inc. (NYSE: CHS)," stated Jack
Benassi of www.rothmanresearch.com.
*Complimentary downloadable research on Chico's
FAS Inc. is accessible upon registration at
http://www.rothmanresearch.com/article/ltd/23448/Apr-20-2010.html
Since the earnings season started, we are also seeing improved
financial reports from different sectors which a year ago would
have been a feat, and positive economic data is starting to build
up momentum. For instance, the last Industrial Production Update in
the U.S. had some positive trends which indicated that overall
production is getting back on track with a year-over-year growth of
4% in March. Release of this report had a prevalent optimistic
effect on the market which firstly ignored the unforeseen surge in
weekly jobless claims, and focused on some positive corrections on
retail stocks last Thursday. "We have seen some positive actions in
some of the retail stocks, like Limited Brands
Inc. (NYSE: LTD), these past weeks even with unemployment at a
very uncomfortable level. This is mainly due to the growing
consumer spending. Limited Brands, as an example, had great
fourth-quarter 2009 readings which can be attributed to the
company's constant efforts in managing cost and inventory. With
consumers gradually shifting their 'wait-and-see' attitude to
'shopping mode,' we have seen Limited Brands comparable-store sales
produce consistent growth in the first months of 2010 after a 2%
drop in December 2009. With its earnings announcement due for
mid-May, we are expecting positive results for the companies first
quarter 2010, even if they are in low single digit," commented Jack
Benassi of www.rothmanresearch.com.
*Direct & free downloadable report on Limited Brands Inc. is available by signing up now at
http://www.rothmanresearch.com/article/ltd/23447/Apr-20-2010.html
This string of positive news and recoup in consumer spending
does seem to have a hollow feeling, however, as the truth remains
that the U.S. still has a lot of unemployed people out there.
*www.rothmanresearch.com is a source for investors seeking free
information on the apparel stores industry; investors are
encouraged to sign up for free at
http://www.rothmanresearch.com/index.php?id=6&name=Register.
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