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SOME THOUGHTS ON THIS MORNINGS DATA

Conflicting and difficult to interpret news this morning on the retail side.   The ICSC retail sales figures came in mixed with a year over year decline of nearly 1% and a weekly gain of 0.2%.  ICSC said high gas prices and difficult comparisons with last years tax rebates skew the figures.   This is one of the first reports citing high gas prices as a culprit for lower consumer spending.   It will be interesting to see if this becomes a trend.

The Redbook reported a massive drop.  Sales were reportedly down 4.4% year over year.   Department stores reported a staggering 6.8% drop while discounters reported a lesser 3% decline.  These are weekly figures, however, so it will be interesting to see if this is a blip on the radar or a trend.  Either way it doesn’t bode well for future consumer spending.

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On the earings front we got boosted earnings from Home Depot.  At first glance this looks like a “you have to own stocks” kind of guidance change, but a look under the hood shows that they boosted EPS estimates, but curiously kept revenues the same.  This likely means they are cutting costs at a better than expected rate as opposed to seeing true business improvement.  A revenue change would have been nice to see, but as the figures above conclude it’s unlikely that HD is going to see a surge in sales any time soon.

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