Kohl's (NYSE: KSS - option chain) shares are rising today after the company posted a 5.5% drop in same-store sales in September, beating analysts' estimates of a 6.1% drop. The markets were braced for bad news, so even though sales fell a significant amount and the KSS lowered its guidance, the stock is still getting a lift.

If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on KSS.

KSS opened this morning at $36.95. So far today the stock has hit a low of $36.74 and a high of $40.08. As of 10:15, KSS is trading at $39.37, up $1.21 (3.2%). The chart for KSS looks neutral and S&P gives KSS a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $35 range.

McDonald's (NYSE: MCD) shares are trading higher after the company reported that May same-store sales rose 7.7%. Overseas sales were strongest, but US sales rose by 4.3%, while analysts expected only 1%. The company claims its low prices actually boosted sales during the economic slowdown as people flocked to cheaper alternatives. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MCD.

After hitting a one-year low of $46.64 in August, the stock hit a one-year high of $63.69 in December. MCD opened this morning at $58.37. So far today the stock has hit a low of $58.00 and a high of $59.56. As of 12:45, MCD is trading at $59.19, up $2.24 (3.93%). The chart for MCD looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make an 8.7% return in just three and a half months as long as MCD is above $50 at September expiration. McDonald's would have to fall by more than 15% before we would start to lose money.

MCD hasn't been below $50 since September and has shown support around $58 recently. This trade could be risky if the company's earnings (due out in late July or early August) disappoint, but even if that happens, this position could be protected by the support the stock might find at its 200 day moving average, which is currently around $57 and rising.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent controls a bullish hedged position in MCD.

With recession fears, housing market worries and credit concerns, retailers have been facing tough times, especially during the holiday winter season of December and January when sales came with weak numbers. But on the heels of these disappointing results, retailers got a beam of hope as February's sales numbers showed a surprising increase.

Encouraging news for retailers showing a rebound in consumer spending during the past month came after world's largest retailer Wal-Mart Stores Inc. (NYSE: WMT) announced a rise of 2.6% for its February same-store sales. The company said that its same-store sales during the period were helped by strong gains from gas, food and flat-panel TVs. Analysts were expecting the retailer show an increase of 1.1% for its same-store sales, according to Thomson Financial.

Among other retailers that showed a rebound in February sales were Costco Wholesale Corp. (NASDAQ: COST) and Saks Inc. (NYSE: SKS), both of which reported stronger-than-expected gains. Apparel retailers Pacific Sunwear of California Inc. (NASDAQ: PSUN) also reported earnings results exceeding estimates of 6% sales growth last month.

For Limited Brands Inc. (NYSE: LTD), though, February didn't come with positive results. The company stated that higher energy and food prices put pressure on consumers who focused on necessities.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

Shares of Sears Holdings Corp. (NASDAQ: SHLD) have been plunging this morning after the company posted disappointing same-store holiday sales. Based on its weak results, the retailer also cut its fourth-quarter and full-year earnings outlooks.

A look at the company's same-store sales, a key indicator of retailer performance that measures growth at existing stores, reveals a decline of 3.5%. Sears saw its domestic same-store sales fall during the holiday season, hurt by weakness in Kmart's seasonal categories and its apparel and tools. According to the retailer, Sears domestic same-store sales fell 2.8%, while Kmart same-store sales tumbled 4.2%.

Sears believes its weak holiday sales and lower profit margins were caused by strong competition, the slumping housing market and credit crisis which increased consumers' fears and made them curb their spending.

Wal-Mart Stores Inc. (NYSE: WMT) reported a December sales gain of 2.4% this morning, which topped analyst estimates and probably caused some industry pundits wonder if December holiday retail sales were all that bad after all.

Did U.S. consumers tighten their wallets and purses and pursue only the bare bones bargains in December? Wal-Mart's sales growth last month would seem to indicate that. After all, no matter what image the world's largest retailer tries to create, it's still the "Always Low Prices" moniker that customers remember when those money clips and coin purses find themselves bare.

Wal-Mart's 2.4% gain in December was driven by sales of food, prescription drugs and consumer electronics. Naturally, electronics sales in December is to be expected. The 2.4% figure did beat analyst estimated of 1.8% and fell inline with Wal-Mart's rather wide 1% to 3% sales gain projection. Although measurement firm Retail Metrics called holiday sales "listless" outside of Black Friday and the actual week before Christmas, it could be said that Wal-Mart's 15,000 item price reduction before the Thanksgiving holiday may have helped it stave off sales growth weakness during the first three weeks of December.

After all, MasterCard Advisors said that "people waiting for discounts" helped many retailer experience sales sluggishness in December, while consulting firm A.T. Kearney said "Retailers have created a bunch of procrastinators waiting for the markdowns they knew were going to come, and they ended up buying at lower margins." At Wal-Mart, those markdowns were already in place before the competition could respond -- and every day has urgency when it comes to December retail sales.

A glut of Black Friday pricing promotions, more available shopping days and colder weather has assisted U.S. retailers in bringing back some shine to November same-store retail results. This is no surprise, but it helps the market take a deep breath after weak consumer confidence, a credit crunch that's still in progress and the lack of a "must have" holiday gift item were all worrying retailer watchers a few weeks ago right before Thanksgiving.

U.S. retailers have had a tough year this year (some worse than others) on the backs of spending pullbacks from many customer groups and tightening wallets. So far, estimates are concluding that November same-store sales results will rise 2.5% for November, ahead of the YTD rate of 2.2% through October of this year -- the slowest in over four years.

It's super Thursday, when same-store sales from many of the nation's retailers hit the Street, and the outlook for the holiday-shopping season is looking less than cheerful.

Weakness in the housing sector, high prices at the pumps, and unseasonably warm weather kept consumers' wallets on a tight leash in October. Early estimates from the International Council of Shopping Centers/UBS indicate that overall U.S. same-store sales in October rose about 2%, missing analysts' previous growth target of 2.5%. Data from Thomson Financial indicates that 18 retailers have missed expectations, while 10 have exceeded.

Ken Perkins, president of research company RetailMetrics, told The New York Times that "Overall, the sales trend continues to slow . . . I think the consumer is certainly feeling the [economic] pressure heading into the holidays."

Fast-food king McDonald's (NYSE: MCD) continues to lure people under the golden arches, with fresh items and an expanded breakfast menu. In October, same-store sales rose by 6.9%, as the restaurateur posted gains across all regions. In the U.S., comparable-store sales were 5.4% higher. Europe saw a 6.4% jump in sales gains, and sales in the Asia-Pacific region, the Middle East, and Africa surged 9.4% during the month.

An article in this morning's Wall Street Journal attributed the surging sales to new products (such as the chicken "snack wrap"), additional breakfast items (offered in an expanded block of time), and a popular value menu, perfect for consumers getting squeezed at the fuel pumps.

Across the board, total sales were 14.2% higher during the month, or up 8.2% excluding fluctuations from foreign exchange rates.

In pre-market action, MCD shares are showing a 1.4% gain. At yesterday's close, the stock was just 2.6% shy of a new 52-week high, so a strong rally today could boost the equity into new-high territory for the year.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

McDonald's (NYSE: MCD) announced that global same-store sales rose 8.1% in August. With 36,000 stores worldwide and annual sales of well over $21 billion, the growth rate is extraordinary. The company's shares are up 2% in premarket trading and the stock could easily break its 52-week high of $53.22.

A food retailer this large growing this fast is likely to be eating someone else's lunch. Shares in Yum Brands (NYSE: YUM) and Starbucks (NASDAQ: SBUX) have lagged McDonald's so Wall Street may suspect that their same-store sales will not be as robust.

McDonald's has been clever, and it seems odd that other food and coffee retailers have not matched some of its moves. Many of its stores are open 24-hours. Almost all in the U.S. open at 5 a.m. to catch the early breakfast crowd. The majority of Starbucks open at 6 a.m.

Investors know that there is only so much air in any room. If McDonald's can keep increasing its sales at a rate faster than the competition, it is likely taking share and cutting into revenues at other companies.

There is no way for the likes of Starbucks to shake this perception without showing that its same-store sales can move up close to 10%.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Eight days ago, Starbucks (NASDAQ: SBUX) began selling the new CD from former Beatle Paul McCartney titled Memory Almost Full. Currently, the CD is only available from Starbucks stores in all 27 countries and on Amazon.com (NASDAQ: AMZN). The CD may be the spark that Starbucks needs to get its stock going, as it is selling extraordinarily well and may lift Starbucks' June same-store sales.

Starbucks is a long-term, excellent growth story. The company currently operates almost 12,000 stores, with a stated corporate goal of growing to over 40,000 units in the next decade. This year so far has been a frustrating one for Starbucks as its stock has traded as high as $36, but is sitting at its low point right now at $27.74.

Update June 13, 2007, 4:36 p.m.: "First-week sales of 160,541 copies marked a 33% improvement over those for Flaming Pie."

The first quarter earnings for Starbucks came in right at consensus expectations: no upside surprise. The market reacted with a rather large yawn and the stock has been trading sideways since. The Paul McCartney CD may be the catalyst necessary to get the stock and the same store sales popping in sync.

Last week on BloggingStocks, I proposed that Wal-Mart Stores Inc. (NYSE: WMT) "take a one-year break from building more stores, and focus on getting the current stores back on track. One lost year of expansion is not much in the long-run and, if it can help to bolster existing stores, it's a wise investment indeed."

While that was certainly a far-fetched idea, Wal-Mart is planning to cut back on the opening of new supercenters this year by 25, and refocus its energy on improving existing locations. The company will build 190-200 new supercenters this year and, in future years, plans to drop that number to around 170.

The company will be using the savings from reduced capital expenditures to ramp up its buyback program, and management's attention will shift toward improving efficiency and same-store sales, which have been thoroughly unspectacular of late.

Shareholders loved the idea, sending the shares up nearly 4% on the news. I think it makes a lot of sense as well. By focusing on improving existing stores for now, future stores will be stronger. Congratulations to Wal-Mart management for resisting the urge to grow as rapidly as possible, which so many other companies have succumbed to. By slowing up a bit, shareholders will reap vastly greater rewards in the long run.

Wal-Mart Stores, Inc. (NYSE: WMT) continues to get slammed from the media and retail critics as not changing and reacting fast enough to stay ahead of the retail discount crowd these days. Sure, the company is making record amounts of revenues (profit margin is another matter), but the company's monthly same-store sales stats and quarterly results aren't comparing to established expectations, nor are they outshining results from competitor Target Corp. (NYSE: TGT).

It's hard to measure Wal-Mart against any other retailer just based on its sheer size, merchandising prowess, and customer availability (supercenters seem to be everywhere these days), but the company has clearly made some strategic errors of late that have impacted results. While I'm not sure which traffic drivers Wal-Mart plans on to get feet in the door (then selling as much as possible to that captive audience), its recent admission of apparel planning mistakes seems to underscore the challenges the world's largest retailer has in trying to get its shine back.

While sales in the U.S. continue to get a collective "yawn" from market pundits and journalists, the company's about-face move in international retail seems to be moving rather fast as the company wants to reap more sales and margin from those markets than from the U.S. market (which takes time investors are not willing to give, it seems). Wal-Mart's recent partnerships with China's Trust-Mart and India's Bharti state to the world that Wal-Mart is serious about its international plans, even in the face of market withdrawals in Germany and South Korea in 2006. The rumor that Wal-Mart may be looking to acquire or take a stake in Indian logistics and retail distribution company Radhakrishna Foodland says that Wal-Mart is placing a pretty good deal of importance into rapidly-expanding markets (India is at the top of that list with China).

This morning, fast-food behemoth McDonald's (NYSE: MCD) reported that its same-store sales spiked 4.8% worldwide in April. Helping drive the sales growth last month, according to company officials, were the kid-friendly Happy Meal, breakfast items, and the new "Snack Wrap" menu offering.

On U.S. soil, same-store sales rose 3.5%. The figures rose 3.5% in Europe and surged 10.3% in the Asia/Pacific, Middle East, and Africa regions (this ties in with Zac's posting yesterday about the expanding waistlines among Japanese women). Total sales rose 9.6% across the globe and 4.2% in the U.S.

With the exception of its fries, and the Big Mac I crave about once every 18 months, McDonald's has never been my favorite, but it's inarguably a force to be reckoned with. And amid complaints from Morgan Spurlock and countless others, MCD has done its part to fight obesity - finding an oil free of trans fats for its french fries, for one, and introducing healthier menu options, such as veggie burgers and better salads.

The company's stock is also an exquisite performer. MCD has been trending higher since early 2003, more than quadrupling in value during the past four years. This month, the stock has eked above its November 1999 peak to peg a new all-time high.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

A couple of months ago, I mentioned that while a Coach (NYSE: COH) handbag can be quite the splurge, shares of the luxury-goods retailer could potentially be a prudent investment. Since this posting, the stock has gained nearly 15%, hitting a new all-time high in Monday's session.

This morning, the company said its third-quarter net income surged 38 percent, to $150 million, or 40 cents per share. Revenue increased 30 percent to $625.3 million. Both of these figures surpassed analysts' expectations of 38 cents per share and $617.6 million, respectively.

Peeking in on sales, direct-to-consumer sales rose 29 percent to $481 million, while same-store sales expanded 20 percent. The newly introduced Coach fragrance accounted for three percent of retail sales during the latest reporting period. No word on what percentage of COH sales came from various car trunks in Manhattan.

Other than the occasional (okay, fairly frequent) lunchtime or late-night trek to Taco Bell -- a unit of Yum! Brands (NYSE: YUM) -- I'm generally not a huge fan of chain restaurants. Most are very good at what they do, but when I'm dining out with friends or family, I typically prefer something off the beaten path.

One exception to this, however, is the upscale Asian dining spot P.F. Chang's China Bistro (NASDAQ: PFCB). If I may suggest, the steamed dumplings and garlic noodles border on culinary perfection.

PFCB shouldn't need much of a PR blitz from me, however; the waits are always long, any day of the week, and the reviews are generally of the rave variety. And yet, March same-store sales dropped 3.0% at the eatery's benchmark China Bistro locations and edged 0.5% higher at its Pei Wei restaurants. For the quarter, China Bistro same-store sales dropped 2.5% while Pei Wei sales rose 0.5%. Total revenue for the quarter ended April 1 rose to $264.4 million, up 15.6% from year-earlier levels but below analysts' expectations of $268.2 million.

On the heels of this news, PFCB shares have dropped more than 5%, dipping back below their 10-day and 20-day moving averages.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.