Is Retail On The Rebound? Many Signs Point To An Upswing

We are finally seeing signs that retail is trending positively again, and with consumer confidence up, the outlook is looking less negative, and may even be slightly optimistic. Here, we look at some recent signals that indicate retail could be on the upswing. In the second quarter of 2017, we saw some positive retail earnings trends. According to research presented by Goldman Sachs at its 24th Annual Global Retailing Conference last week, 76% of 50 retail companies that reported second-quarter earnings beat consensus EPS estimates in the quarter, while 20% missed estimates and 4% saw EPS that was in line with estimates. The companies in the group cover the entire retail sector, and include operators of specialty, department, home furnishings and off-price stores. The majority of the 50 companies Goldman Sachs analyzed also beat on same-store sales. Another positive sign is that some retailers have seen store traffic start to increase again. Kohl’s reported in its most recent earnings presentation that its traffic momentum had accelerated. Meanwhile, TJX Companies reported positive traffic trends and Walmart reported a 1.3% increase in comparable store traffic. Earlier this year, many retailers were reporting double-digit decreases in traffic: L Brands said that its mall store traffic was down about 11% in February and Victoria’s Secret reported a footfall decline of 16%. But according to RetailNext, which provides in-store analytics for thousands of stores, retail store traffic in July declined by just 5.5%, its smallest drop since January 2016. And although August traffic trended downward, falling by 7.7%, the overall trend for the past few months has been more positive. Read more at Forbes.