For Immediate Release
Chicago, IL – September 15, 2010 – Zacks.com Analyst Blog features: Kroger's (KR), Walgreen's (WAG), Best Buy (BBY), Home Depot (HD), and The Gap (GPS).
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Here are highlights from Tuesday's Analyst Blog:
Retail Sales Better than Expected
The strongest category of stores were gas stations, where sales rose by 1.9%, on top of a 2.2% rise in July. Clearly that is mostly a function of higher gasoline prices than it is a sudden surge in the consumption 44 oz fountain soft drinks and hot dogs off the rollers. Year over year, gas station sales are up 9.6%.
Grocery store sales were also strong, rising 1.3%, but that reversed a 0.5% decline in sales in July, and relative to last year sales are up just 2.2%. In other words, Kroger's (KR) might have had a nice month, but it is not a relentless surge of people turning in to gluttons, nor is food price inflation a big long-term problem, at least looking back over the last year. The recent surge in the price of wheat due to the drought in Russia and the floods in Pakistan may have played a role in the big August rise in sales.
Drug stores like Walgreen's (WAG) also had a pretty solid month, with sales up 0.6% after a 0.2% rise in July and are up 4.6% year over year.
The more discretionary types of stores did not fare as well. Sales at furniture stores fell by 0.5%, reversion a 0.6% rise in July and are up 2.4% year over year. Sales at electronics and appliance stores such as Best Buy (BBY) fell 1.1% on top of a 0.3% decline in July, but are up 4.3% year over year. That does not sound like a very good back-to-school season for electronics.
The collapse in home sales, both new and used, also probably depressed sales on the appliance side. On the other hand, sporting goods and Hobby stores had a solid month with sales up 0.9% after falling 0.1% in July and are up 4.0% from a year ago.
Sales in the Building Materials and Garden Center stores like Home Depot (HD) were unchanged on the month after falling 0.4% in July but are up 4.9% from a year ago. Given how weak the construction industry has been, up 4.9% from a year ago is a fairly solid showing, but then again, a year ago things were pretty depressed.
The one discretionary area that did show some strength was in clothing stores like The Gap (GPS), where sales were up 1.2% after falling 0.3% in July, and are up 3.9% from a year ago. Then again, a new pair of jeans is a bit less discretionary than a new kitchen table, but less discretionary than going to the grocery store.
Going out to eat and drink is also a very discretionary item, and sales at bars and restaurants were up just 0.1%, reversing a 0.1% decline last month and are up 2.9% year over year.
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BEST BUY (BBY): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
KROGER CO (KR): Free Stock Analysis Report
WALGREEN CO (WAG): Free Stock Analysis Report
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