Most Retailers Miss November Sales Estimates

| About: Consumer Discretionary (XLY)
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By Jharonne Martis

The holiday season is off to a slow start. The Thomson Reuters Same Store Sales Index registered a preliminary 0.8% gain for November, matching its final SSS estimate. That's well below the 3% gain considered a sign of a health retail sector.

The bulk of retailers missed their estimates, and only L Brands beat its estimate, and posted a positive surprise in November. Please note, these results are not final as Fred's will report November SSS results on Dec. 8.

For three consecutive months in a row, Zumiez has posted robust SSS results. For November, the retailer came up on top with a 5.7% SSS result, but below its 9.1% final estimate. Meanwhile, L Brands posted the second strongest result at 4.0%, followed by Costco's weaker-than-expected 1.0% SSS.

L Brands received a boost from its Victoria Secret's division's 5.0% SSS, while its Bath and Body Works' group posted a 4.0% comp. On the flip side, teen retailer The Buckle registered the weakest result in our retail universe at -16.2%, followed by Cato Corp.'s -10.0% SSS result.

November marks the first month of Q4 2016. The Thomson Reuters Quarterly Same Store Sales Index, which consists of 80 retailers, is expected to post 0.8% growth for Q4 (vs. 1.2% in Q4 2015).

Exhibit 1. Performance - Overall and Compared to Expectations

Source: Thomson Reuters I/B/E/S estimates

Exhibit 2. Beat - Met - Missed

Source: Thomson Reuters I/B/E/S estimates