November Retail Sales Disappoint; Federated and Target Are Bright Spots

Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:

November retail sales rise, but growth slows [Reuters]

Summary: 56% of U.S. retailers missed sales growth targets for the month of November. The world's largest retailer, Wal-Mart, saw same-store decline of 0.1%, the first such fall since 1996, and delivered disappointing December guidance of flat to 1% growth. Federated Department Stores (+8.5%) and Target (+5.9%) were bright spots, posting better than expected November sales. J.C. Penney (+1.4%) and Gap (-8%) delivered sales figures below previous projections, and Pier One saw a big 15.3% decline. Overall November same-store sales have shown a 2.1% rise from a year ago. For December, retailers are optimistic that Christmas falling on a Monday will give a last-minute weekend sales boost.
Related links: WSJ interactive retail sales chart and November results chart • Media coverage: CNNMoney, WSJ. Commentary: Retailers' Heavy Discounting Should Pressure Q4 Margins, More Bad Data From The National Retail Federation?, David Strasser's Long Case For Lowe's Corp. Conference call transcripts: Wal-Mart F3Q07 (Qtr End 10/31/06), Federated Department Stores Q3 2006 .
Potentially impacted stocks and ETFs: Wal-Mart (WMT), Federated Department Stores (FD), J.C. Penney (JCP), Nordstrom (JWN), Target (TGT), Sears Holding (SHLD), Pier One (PIR), Kohl's (KSS), Saks (SKS) • ETFs: Retail HOLDRs (RTH), Consumer Discretionary SPDR (XLY)

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