Thursday, October 7, 2010

Morning Note...

 
Futures are ~50bps higher this morning as September same-store-sales come in  - on the aggregate – better than expected.  For example, American Eagle, Abercrombie & Fitch, Aeropostale, Bon-Ton, and the Limited are all higher pre-market on better-than-expected September sales across the board (see below for the full re-cap).  In other corporate news, Marriott is lower on an earnings miss, and Pepsi is lower on in-line earnings with lowered forward guidance.  In economic news, Initial Jobless Claims seem to be as range-bound as the equity market, coming in at 445k vs. the 455k expectation and the prior 456k.  Continuing Claims were 4.462M vs. the 4.450M expectation.  For the municipal-default-watchers, the Wall Street Journal is reporting that the Harrisburg City Council is set to vote on the sale of short-term notes to cover critical expenses through the first quarter of 2011.  Official Non-farm Payroll data due tomorrow at 8:30am.  Europe ~70bps higher on average.  Asia mixed overnight.  Oil +85bps.  Gold +65bps.  10-yr yields make a new record low.  USD 40bps weaker. 

Same store sales re-cap, courtesy of BTIG:

            Better Than Expected (17)

Saks reports September SSS up 6.5% - better than 5.5%
(Total Sales - $256.4 million vs $242.2, a 5.9% increase y/y)

Macy's Sept. Same-Store Sales Up 4.8% - better than 3.7%
(Total sales of $2.183 billion, increase of 6.9 percent compared with total sales of $2.042 billion; online sales up 29%, y/y)

Nordstrom September Same-store Sales Up 7.5% - better than 3.9%
(Total Sales $810 million, increased 12.5 percent vs. $720 million, y/y)

J. C. Penney Sept. Comparable Store Sales Increase 5.1% - better than 3.2%
(CO REAFFIRMS FORECAST, CO. STILL SEES 3Q EPS 16C-20C, EST. 17C)

Limited Brands Sept. Comparable Store Sales Up 12.0% - better than 3.7%
(Net Sales $735.8M vs $654.8M, y/y)

Dillard's Inc. Sept. Same-Store Sales Rose 3.0% - better than (1.0%)
(Total Sales $532.3M compared to sales of $519.3M, up 3%)

Abercrombie & Fitch Sept. Same-Store Sales Rose 13.0% - better than 3.4%
(Net Sales $305.3 million, 25% increase from net sales of $244.0 million y/y)

American Eagle Outfitters September Sales Up 4.0% - better than (0.8%)
(Co. Boosts 3Q Adj EPS 27c-28c vs Analysts 25c)

Aeropostale Sept. Same Store Sales Rise 3.0% - better than (2.0%)
(Co. noted that its merchandise margins were down versus last year, and inventories continue to be well controlled)

Wet Seal September Comparable Store Sales Down 0.7% - better than (2.3%)
(CO. SEES 3Q EPS HIGH END 1C-3C, EST 2C)       

Buckle September Comparable Store Net Sales Up 3.0% - better than (4.9%)
(Net sales 8.7 percent to $87.1 million from net sales of $80.1 million, y/y)

TJX Companies reports September SSS up 1.0% - slightly better than 0.9%
(SEES 3Q EPS 89C-91C, HAD SEEN 3Q EPS OF 86C-91C)

Zumiez Sept. Same-store Sales Rise 17.0% - better than 12.4%
(Reported yest – Co. Raises 3Q View To EPS 28c-EPS 30c)

Bon-Ton Stores reports September SSS up 5.9% - better than 0.0%
(Total sales up 5.7% to $299.2 million compared with $282.9 million, y/y)

Hot Topic Sept Same-Store Sales Down 2.6% - better than (4.3%)
(Reported yest – Sept Net Sales $437M, down 4.8%, y/y)

Cato Corp. Sept same-store sales up 2.0% - better than 1.0%
(CO. SEES 3Q EPS 17C-20C, SAW 12C-15C)

Stein Mart reports September SSS up 0.4% - better than (3.0%)
(Total sales for the period were $101.4 million, a decrease of 0.6 percent from $101.9 million y/y)

In-line (1)

Costco reports September SSS up 5.0% - in-line with expectations
(Reported yest – Conference call:  Co. Plans to aggressively merchandise this holiday season; Feels good about inventory levels; experiencing inflation in key commodity areas)

Worse Than Expected (7)

Target reports September SSS up 1.3% - worse than 2.2%
(CEO – “… In October we will finish our ambitious 2010 remodel program, allowing Target to enter the fourth quarter with no stores under construction and the Fresh layout in 462 stores. We believe these strategic sales-driving initiatives will help Target to continue delighting our guests while gaining market share profitably in the upcoming holiday season.")

BJ's Wholesale reports September SSS up 1.5% - worse than 1.9%
(Sept Total Sales Up 3.6% To $961.6M vs. $928.1M, y/y)

Ross Stores Sept. Same Store Sales Up 2.0% - slightly worse than 2.1%
(Co. Raises 3Q View To EPS 94c-EPS 96c)

Gap September Comps Down 2.0% - worse than (0.1%)
(CFO - "We are pleased that we continued to deliver on our goal of driving overall sales growth, despite September being more challenging than we anticipated.”)

Kohl's Corp Reports Sept Comparable Store Sales Up 3.0% - slightly worse than 3.1%
(CEO – “We are pleased with our sales performance in September, especially given the comparison to last year’s 5.5 percent comparable store sales increase)

Stage Stores reports September SSS rose 1.8% - worse than 2.0%
(CEO – “We are pleased with our start to the fall season. September represents the fifth month of sequentially improving comparable store sales. Our Texas and Louisiana business continues to improve and generated positive comparable store sales results in September.”)

Fred's Sept Comparable-Store Sales Flat - worse than 2.1%
(CEO – “Fred's performance through the first two months of the quarter is in line with our plans, and we remain confident about our financial guidance

In terms of “hidden news gems,” I found this really interesting, and perhaps a more relevant read-through into the state of Wall Street and our economy than your normal economic data (and it certainly conflicts with today’s consumer spending/retail sales data): 

New York Incomes Fall First Time in 70 Years: 2010-10-07 07:33:21.230 GMT

Oct. 7 (Bloomberg) -- New York state residents’s personal incomes fell by 3.1% y/y, the first decline in 70 years and a rate almost 2X that of other Americans, WSJ says, citing  state comptroller.

JEFF ups OGE.  OPCO ups TNB.  BARD ups TXRH.  BofAMLCO cuts SPRD.  RBCM cuts MDCO.  AEO higher on +4% SSS.  ANF higher on +13% SSS.  ARO higher on +3% SSS.  BONT higher on +6% SSS.  LTD higher on +12% SSS.  MAR lower on earnings miss.  PEP lower on earnings and lowered guidance. 

S&P 500 PreMarket 8:30am (last/% change prior close/volume): 

Today’s Trivia:  The oldest airline in the world still operating under its original name was founded on this date in 1919.  What is it?

Yesterday’s Question: According to Meredith Whitney on CNBC yesterday, what percentage of Americans do not have a checking account?

Yesterday's Answer:  26% of Americans do not have a checking account.

Best Quotes:  Trader commentary… “Market held on the gains yesterday in the face of a bad ADP Jobs number.    This morning infront of what is likely a bad Jobless claim number.  They will likely hold on prior to tomorrows Nonfarm data.  The reason seems to be the worse the number, the bigger the QE2 will be.   The Global easing has everyone buying the speculation.   2 Fed speakers on tap today.  The economy is bad.   Money will remain cheap.   Crude up .65% this morning.  All the commodities will stay bid.     Retails sales out today.    Alcoa after the bell.   1160 yesterdays high.   Can’t fight the tape right now. The room is definitely more active.    Have a good day.”