We might be in a bull market, and that might create a wealth-effect as it relates to consumer spending, but we’re simply not seeing it yet. The Redbook (80 store sample) numbers released this morning peg department store spending flat yy, and the gap with Discount Stores continues to widen. This is the 5th week we’ve seen consecutive declines in the Dept Store component, and 4th week for Discounters. The Discount Store/Department Store gap traditionally widens when the consumer is stretched as people take down discretionary spending, and shift incrementally to the Wal-Marts of the world. The incremental changes are not massive, but have been enough to take Department Store spend from +1.7% around the holiday (partially driven by discounting) to flat today.
Our top long ideas are RH, NKE, FNP (still), JCP and RL.
Top shorts include M, GPS, GES, UA and KSS
Johnson Redbook Same Store Sales Index: YY % Change
