Earlier this week the U.S. Department of Commerce released strong retail sales numbers for the month of October. The numbers came in higher than predicted, which is especially surprising considering that the government shut down during the month.
Consumer Goods analyst Michael Finarelli thinks that a large part of this increase was due to many retailers using sales and promotions to get customers into their doors. While this is keeping sales numbers high, he thinks that its going to hit margins hard.
One company Mike thinks is taking an especially strong beating is Wal-Mart (NYSE:WMT). The retailer's comps are down amid weak traffic, and Wal-Mart's going to have to provide deeper discounts than ever before to keep up with competition.
Meanwhile, fellow consumer goods analyst Sean O'Reilly thinks that Dick's Sporting Goods (NYSE:DKS) is going to continue seeing strength over the next few months. Sporting goods stores in general did very well in October, and Dick's recent earnings report illustrates the company's fundamental strength.