Jefferies’ Consumer Retail Comps Preview (TGT, KSS, COST, BJ)

Jefferies & Company is out with a research report this morning, where it previews the same store sales comps on several of the broadline retailers ahead of their August reports. The analysts said that they continue to favor defensive names and those that have strong growth drivers that are independent of macro headlines, such as Target TGT. They added that Dollar Tree DLTR ranks high on their list as well. The analysts highlighted four key names: 1. “We are forecasting an August comp store sales gain for Target in the range of 1.5%-2.5%, which is essentially in-line with the company's plan for a low single-digit increase. 2. We are expecting a comp store sales increase in the range of 2%-3% when Kohl's KSS reports on Thursday. This would be better than the company plan to be below its quarterly 2-4% plan in the month of August. 3. We are expecting core comp store sales at Costco COST to come in around 4%-5% and core US comp store sales to be about 3%-4%. Our core comp store sales estimates exclude a 40-60 bps total company benefit (50-70 bps in the U.S.) from gas and a 50-100 bps benefit from currency translation. 4. We expect the BJ's BJ to report a total comp store sales increase of 3%-4%, which includes a core gain of 2.5%-3.5% and a benefit of approximately 40-60 bps from gas. The company's core merchandise comp store sale guidance for the month is in-line with the quarter at 2%-4%.”