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Holiday Sales to Gain From Post-Election Certainty

Nov 15, 2016 2:11 AM   By Rapaport News
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U.S. holiday season forecasts for retail improved as increased certainty after the presidential elections is expected to bolster sales. Commentators have, however, warned about the extent of any potential upturn.

“Having certainty on that [elections being over] is probably a good thing looking into the holiday,” said Kevin Mansell, chairman, chief executive officer and president of department store chain Kohl’s, in an earnings call November 10 transcribed by Seeking Alpha.

Early indications suggest investors are more confident about U.S. retail in the wake of Donald Trump’s victory than expected. Shares of department store chains Macy’s, JCPenney, Nordstrom and Kohl’s all gained since markets opened November 9, after results of the vote emerged – even as all but Nordstrom posted lower third-quarter sales figures last week.

“It will be interesting to see over the next couple of months if we do see more of a sense of certainty. It could turn out to be little better of a holiday than maybe initially thought,” said Matt Boss, a retail analyst at JP Morgan.

In addition, a sluggish holiday season last year is set to bode well for this year’s figures. Holiday sales will increase 2.1 percent to 2.5 percent over last year, magnified by last year’s relatively low base, according to a forecast by Standard & Poor's covering general merchandise, apparel and accessories, furniture and other retail sales – known as GAFO.

“GAFO sales were weak last holiday season, up less than 1 percent, so we expect the comparisons and margins will be easy for many retailers,” the rating agency said. Retailers that performed below expectations last year are entering the season with disciplined inventory levels, improving their margins, the company added.

But, S&P struck a note of caution. “It's hard to say consumers are very cozy,” it said. “The Conference Board measure of consumer confidence fell in October [to 98.6 from 103.5 a month earlier] and wage growth has been sluggish.”
Tags: conference board, consumer confidence, Consumer Confidence Index, elections, holiday sales, holiday season, holidays, jcpenney, Kevin Mansell, Kohl’s, Macy’s, Matt Boss, Nordstrom, Rapaport News, retail, Standard & Poors
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