5 Retail Stocks To Lift Spirit Despite Soft November Sales
Zacks Investment Research | Dec 15, 2019 09:20PM ET
U.S. retail sales showed continued rise going into November but the rate of growth fairly moderated. As Americans refrained from splurging on clothing stores and restaurants, retail sales exhibited a slight uptick, signaling a soft start to holiday-shopping season and raising concerns about the economy losing steam in the October-December period.
Analysts also pointed that with Thanksgiving occurring a week later this year, there were fewer shopping days after Black Friday. Nevertheless, an upwardly revised October sales data, solid labor market and steady wage gains show that the economy still has some spark. Moreover, consumer spending — one of the pivotal factors driving the economy — is likely to regain strength as U.S.-China trade tensions de-escalate.
Retail Sales Growth Slows
The Commerce Department stated that U.S. retail and food services sales in November rose 0.2% to $528 billion, following an upwardly revised reading of 0.4% gain in October. Notably, retail sales improved 3.3% from November 2018.
The report suggests that sales at health & personal care stores fell 1.1%, while sales at sporting goods, hobby, book & music stores declined 0.5%. Meanwhile, sales at both clothing & clothing accessories and department stores decreased 0.6%. Sales at food services & drinking places slid 0.3%.
We note that sales at motor vehicles and parts dealers rose 0.5%, while the same at electronics & appliance stores increased 0.7%. Meanwhile, sales at food & beverage stores rose 0.3%, while at furniture & home furnishing stores sales improved 0.1%. Meanwhile, receipts at gasoline stations rose 0.7%. Non-store retailers witnessed a 0.8% jump in sales, which surged 11.5% from the prior-year period.
Is This a Temporary Blip?
Some industry experts are of the opinion that the slowing of retail sales in November may be a temporary phase, and could bounce back in December, given the underlying strength in the economy as of now. The economy added 266,000 jobs in November and the unemployment rate falls to 50-year low of 3.5%.
Moreover, the National Retail Federation envisions holiday retail sales to advance 3.8-4.2% this season (excluding automobiles, restaurants and gasoline). Online and other non-store sales are expected to grow 11-14%. Last year, holiday sales rose just 2.1%, per NRF.
Certainly, favorable economic indicators bode well for the Zacks Investment Research
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