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Holiday Sales to Gain From Post-Election Certainty
Nov 15, 2016 2:11 AM
By Rapaport News
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RAPAPORT... U.S. holiday season forecasts for retail improved as increased
certainty after the presidential elections is expected to bolster sales. Commentators
have, however, warned about the extent of any potential upturn.
“Having certainty on that [elections being over] is probably
a good thing looking into the holiday,” said Kevin Mansell, chairman, chief
executive officer and president of department store chain Kohl’s, in an
earnings call November 10 transcribed
by Seeking Alpha.
Early indications suggest investors are more confident about
U.S. retail in the wake of Donald Trump’s victory than expected. Shares of
department store chains Macy’s, JCPenney, Nordstrom and Kohl’s all gained since
markets opened November 9, after results of the vote emerged – even as all but
Nordstrom posted lower third-quarter sales figures last week.
“It will be interesting to see over the next couple of
months if we do see more of a sense of certainty. It could turn out to be
little better of a holiday than maybe initially thought,” said Matt Boss, a
retail analyst at JP Morgan.
In addition, a sluggish holiday season last year is set to bode
well for this year’s figures. Holiday sales will increase 2.1 percent to 2.5
percent over last year, magnified by last year’s relatively low base, according
to a forecast by Standard & Poor's covering general merchandise,
apparel and accessories, furniture and other retail sales – known as GAFO.
“GAFO sales were weak last holiday season, up less than 1
percent, so we expect the comparisons and margins will be easy for many
retailers,” the rating agency said. Retailers that performed below expectations
last year are entering the season with disciplined inventory levels, improving
their margins, the company added.
But, S&P struck a note of caution. “It's hard to say
consumers are very cozy,” it said. “The Conference Board measure of consumer
confidence fell in October [to 98.6 from 103.5 a month earlier] and wage growth
has been sluggish.”
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Tags:
conference board, consumer confidence, Consumer Confidence Index, elections, holiday sales, holiday season, holidays, jcpenney, Kevin Mansell, Kohl’s, Macy’s, Matt Boss, Nordstrom, Rapaport News, retail, Standard & Poors
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