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While most of the stock market has reported earnings, we're still in the midst of hearing from the retailers. With the U.S. economy being mostly consumer-driven, these reports are usually critical in trying to understand economic trends.

So far, it has been an extremely mixed earnings season.

The Good

For some retailers, there were no problems in the second quarter. Luxury retailer Michael Kors saw same store sales rise 27.3% and Tiffany had same store sales growth of 5% with gains in most regions.

But it's not only the luxury end which saw growth.

Dollar General just reported a record second quarter with same store sales growth of 5.1% on increased traffic. Consumable sales, including tobacco, perishables, candy and snacks, led the quarter.

The auto retailers are also having their best year since the Great Recession, with double digit sales growth. The good times continued in August, as car and truck sales were the highest in 7 years.

The Bad

But not all the retailers are smelling like roses. Wal-Mart, the king of retailers, recently lowered full year guidance. On the higher end, Macy's missed on the Zacks Consensus Estimate for the first time in 5 years and saw its first sales decline since 2010.

The teen retailers have been awful. American Eagle saw same store sales fall 7% on weak traffic and a slowdown in women's sales. It also said the retail environment had become "highly promotional." It saw the weakness continuing into the third quarter.

Abercrombie & Fitch said the same thing: weak traffic and continued softness in women's with same store sales falling 11% in the second quarter. Aeropostale had a "negative" outlook for the third quarter and said it expects that to continue due to the competitive teen retail environment.

But other non-teen retailers have also reported weaker store traffic.

Women's fashion accessory and apparel maker Francesca's, which targets the female 18-to-35 demographic, missed on the Zacks Consensus Estimate today and lowered third quarter guidance. Same store sales fell 1% in the second quarter. Like the teen retailers, it said traffic was weak, especially in July, and remained so into August.

Are middle class consumers eschewing discretionary items like clothes, sunglasses and handbags, for "essential" items like food and cars?

What does it mean for the U.S. economy in the second half of the year if the consumer is turning cautious?

 

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