"What are you, on dope?" -- Mr. Hand, Fast Times at Ridgemont High
It's days like this when I tend to forgive my fellow citizens their disinterest in most things financial, economic, or otherwise. You see, our friends in the media aren't always lending the helping hand they ought. Take the latest retail sales news.
I was just looking at the news feeds, and I saw these two Reuters headlines, one right after the other: "Chain Store Sales Up ." "Chain Store Sales Dip ."
That's a fair bit of needless contradiction for investors interested in the trends likely to affect discounters like Wal-Mart (NYSE:WMT), Costco (NASDAQ:COST), or Target (NYSE:TGT); department stores like Federated Department Stores (NYSE:FD) or Nordstrom (NYSE:JWN); or higher-end specialty retailers like Gap (NYSE:GPS) and Urban Outfitters (NASDAQ:URBN).
Which report is right? Depends on what you like to look at. The story under the "dip" headline was looking at the latest week's International Council of Shopping Center numbers and comparing them with the prior week. By that figure, we've got a 1.6% drop. However, comparing that week (ended March 25) with the prior year's week, we actually see a 2.7% increase. That figure agrees, for the most part, with the numbers referenced in the "Chain Store Sales Up" story, which is based on a separate research report that shows a 2.2% rise over the prior year's week.
So the proper answer to "Who's right?" is both, or maybe neither. As usual, I think the better question for investors is: "Does any of it matter?"
In the short run, the answer is a "no." But that's never stopped the Street from punishing retailers for minor missteps, especially when monthly comps numbers emerge. Over the long run, sales trends do matter, especially on an individual level. In the meantime, savvy investors will continue to watch the contradictory sales reports and short-term market responses for fire sale prices on solid companies. Media-induced market confusion may be annoying on an intellectual level, but it does offer opportunities.
Costco is a Motley Fool Stock Advisor selection. Gap is a Motley Fool Inside Value recommendation. A free trial will let you see why analyst Philip Durell believes a turnaround is out there on the horizon.
Seth Jayson loves playing in the retail sandbox. At the time of publication, he had no positions in any company mentioned. View his stock holdings and Fool profile here . Costco is a Stock Advisor recommendation. Fool rules arehere.
