More Weakness In The Retail Sector?

retail-shoppingGeorge Leong: We all know how bad this winter has been so far. The harsh weather across the majority of the country has impacted jobs growth, commerce, housing, and consumer spending.


Of course, with the spring season on the horizon, we’ll soon see if the weak economic metrics mentioned were really an aberration due to the weather—or a sign of further slowing to come.


From what I can tell right now, we are definitely seeing some growth issues in the retail sector  (NYSEARCA:XRT) that have been attributed to the winter weather.


The Home Depot, Inc. (NYSE:HD) reported a somewhat flat quarter, as did Lowes Companies, Inc. (NYSE:LOW).


However, I understand why they’ve reported flat numbers—it’s winter; who wants to renovate or build when it’s so cold outside?


Bellwether Wal-Mart Stores, Inc. (NYSE:WMT) is also struggling to attract consumers to its doors.


The global retailer delivered flat sales and earnings growth in its fiscal 2014; revenues grew a mere 1.6%, while earnings growth was not much better at an even two percent. Clearly, we are seeing some hesitancy in consumer spending and the retail sector.


The winter-related turmoil is not confined to just one area, though; it has impacted many retailers.


However, the luxury side appears to be faring well, with excellent growth still at Michael Kors Holdings Limited (NYSE:KORS). This luxury retailer is providing staggering growth despite the sluggish retail sector. (Read “Stock Falling, but Rich Still Spending; My Top Luxury Stock Play.”)


Clearly, the more affluent part of the masses continues to do very well, especially with the continued advance in the stock market, which has produced many new millionaires.



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