There's a chill in the air and a slight up-tick in confidence. Holiday discounts are coming a bit earlier, too. For retailers, this has been a great combination, leading to the second consecutive month in which retail sales increased.
This follows more than a year of drops. Consumers aren't going crazy, but they are loosening their wallets a little bit. Consumer spending accounts for 70% of the U.S. economy, and the coming holiday season is where the action is -- for the retail sector and, consequently, for everyone else.
Overall, a study by Goldman Sachs (NYSE: GS) and the International Council of Shopping Centers indicated an increase in sales at stores open at least a year by 2.1% -- much better than the 4.2% decline a year earlier. The result beat analyst forecasts and follow an unexpected increase of 0.6% in September. October 2009 was the strongest performance for the retail sector since July 2008. The numbers don't include Wal-Mart (NYSE: WMT), which stopped releasing monthly sales reports this year.
Several retailers posted solid results. TJX (NYSE: TJX), Gap (NYSE: GPS), and Costco (NASDAQ: COST) led the charge. Costco saw sales at stores open at least a year increase by 5%, while analysts surveyed by Thomson Reuters predicted only 4.7%. Luxury retailers including Saks (NYSE: SKS) and Nordstrom (NYSE: JWN) improved, as well, showing that even the upscale crowd can get by in this tight environment.
It wasn't all rosy, though. Target (NYSE: TGT) reported a slight decline of 0.2%, while analysts had expected no change year-over-year. Children's Place Retail Stores (NASDAQ: PLCE), Wet Seal (NASDAQ: WTSLA), and Stage Stores (NYSE: SSI) posted declines, as well, and Limited Brands (NYSE: LTD) was off 4%. Macy's (NYSE: M) saw retail sales fall 0.8% at stores open at least a year.
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