July sales figures have started coming out for a number of the big retailers, but the results have only clouded the already hazy picture of retail's immediate future. While July is typically a slow month, we can learn a lot about what sort of trend companies can expect later this year by looking at sales figures. The lead-up to the holiday season is especially important, as low summer sales can leave typically profitable racks filled with leftover and discounted merchandise. Even through the fog, two companies are emerging as clear winners, let's see why.
The biggest losers
2012 has been a confusing year for consumers, making for an uncertain market for retailers. Unemployment has dug its feet in at just above 8%, with the latest report showing no indication of a major move anytime soon. Consumers have received no clear signs of what's coming next for the economy, and confidence levels have continued to bump along, now up only slightly for the year. Even July's unexpected jump in confidence came with no change in June's personal spending.
This means that a lot of retailers have had weak years so far. Recently, Coach
Although the fall wasn't nearly as hard, Abercrombie & Fitch
The big winners
But as I said, the outlook is foggy. Along with the losers, we've seen some winners, adding to the confusion. Clothing retailer Limited Brands
The only struggle for the company continues to be its inability to squeeze growth out of the La Senza lingerie brand. Same-store sales fell 5% for La Senza, slightly offsetting the 12% growth earned by Victoria's Secret. The company has tried to fight this decline by closing underperforming La Senza stores, shutting down 33 so far this year.
If the Limited's performance came as a surprise, imagine the shock upon seeing Gap's
The bottom line
With the uncertainty of the economy and the likelihood that nothing much will change until after election season is over, it can be hard for investors to get a feel for what's happening in retail. Monthly sales figures give us a great way to understand the current trends, and because they come out right at the end of the month, there's very little intel lost to lag. While not all retailers report monthly figures, those that do can help guide investors across the whole sector.
Of the two winners, Gap continues to be my choice. The company has realized that it's not the brand it used to be and that some things need to change if it wants to reach the top of the pile again. A focus on fashion and streamlined operations are really making a change for Gap. But as much as I like Gap, it didn't make the Fool's list of "Middle-Class Millionaire-Makers." These are three companies you already know and love, flying under Wall Street's radar. The free report tells you why they'll do well, and you can get all the details today.
Fool contributor Andrew Marder does not own any of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of Coach. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.