Bank of America Merrill Lynch says its aggregated credit and debit card data suggests that department store sales were up 1.7% Y/Y in March.
"We attribute the improvement to a turn in weather and a catch up in tax refunds, partly offset by the build up to Easter shifting from March to April," notes the BAML analyst team.
"Better trends in March is consistent with commentary from Macy’s at our consumer conference that trends had stabilized in early March once refunds had caught up and the government shutdown was further in the rear view. Department store shoppers tend to be highly weather sensitive, especially at the lower-end. We remain cautious on the department stores as macro tailwinds abate."
BAML has Underperform ratings on Macy's (M -0.5%), J.C. Penney (JCP -1.2%), Dillard's (DDS -0.5%) and Nordstrom (JWN -1.2%). The exception to the firm's cautious stance is Kohl's (KSS -1.2%), which is reiterated at Buy on the expectation for strong revenue and EPS growth.