FactSet Insight: Despite Robust January Retail Sales There Are Signs That Outlooks From Retailers Won’t Be So Rosy

Read the full article on FactSet Insight.


This marks the fourth peak week for the fourth quarter earnings season. If you recall, the fourth quarter reporting season stretches longer than any other, typically with four or five peak weeks versus the three peak weeks seen for the first through third quarters. This week we start to get results from the retailers, but there is debate as to whether those reports will be as rosy as the reading we saw on retail sales last week.

January retail sales increased 3% month over month, much better than the 1.9% that was expected. These numbers are not adjusted for inflation, meaning that consumers out-shopped the 0.5% inflation rate for the month as measured by CPI. But while the consumer has remained resilient in the face of inflation, in large part due to a steady job market, many retailers have been forthcoming about how difficult it’s been to entice shoppers to spend their discretionary income. A heavy promotional environment that started in October as part of the holiday shopping season has held on longer than retailers ever intended, with discounts deeper than desired. So while it’s great to see a consumer that is still active, those dollars are hard-earned.