Not Enough From ICSC Reading To Save 4Q

Takeaway: This morning’s -4.2% w/w reading in the ICSC index is not enough to save 4Q earnings for retailers. The clock is ticking.

This morning’s -4.2% w/w reading in the ICSC index is not enough to save 4Q earnings for retailers. This week actually marks a slight improvement from the -5.4% sequential decline we saw in the first week of last year. But 2012 is hardly the benchmark year, as it finished below both 2010 and 2011 levels. The next week is critical. If we do not see a pickup at a rate ahead of last year, we’re likely to see the retailers step on the gas as it relates to discounting in order to clear inventories for the 4Q13 reporting period. That synchs perfectly with preannouncements into ICR.

 

We remain bearish on softlines retail overall.

Top Shorts: GPS, M, GES, TJX, VFC, FDO, CRI, UA

Top Longs: NKE, FNP, URBN, RH, RL

After a year and half of being bearish on JCP, we have an upside bias – though we think it will be one of the biggest factors leading to draconian competitive landscape changes during the year.

 

Note: Unlike Same Store Sales day, which has become largely irrelevant die to the shrinking sample of participating, this ICSC index is made up of 80 relevant retailers and is weighted to portray an accurate view of the real state of discretionary retail in the US.

 

Not Enough From ICSC Reading To Save 4Q - 1 8 2013 10 12 55 AM


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