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Retail Sales Tick Higher; Target (TGT) Mixed, Down -15%

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Wednesday, November 16, 2022

Retail Sales for the month of October brings us the first higher-than-expected economic print of the week: +1.3% month over month was a rick above the +1.2% expected, and well beyond the unrevised 0.0% reported for September. This is the strongest month-over-month headline Retail Sales number since February of this year. Quite surprisingly, ex-auto sales, this figure remains +1.3%. Take out autos and gas for the month and we see a little peel-off: +0.9%.

These are still fairly robust figures for an economy supposedly spiraling into a recession. Clearly, part of this is higher gas prices, but the overall retail market is not distorted by high-ticket auto sales at all. The Control figure, which finds its way into other comprehensive economic prints, reached +0.7% — still high, but below the +1.1% Control number we saw in June of this year. Retail Sales, ahead of holiday shopping season, which is getting underway currently, was led by items like furniture sales.

Import Prices, also for October, came in at -0.2%, half of the -0.4% anticipated and much stronger than the upwardly revised -1.1% from September. While closer to the zero-line, this nevertheless amounts to the fourth-straight month of negative Import Prices. Ex-petrol, this stays -0.2%. Year-over-year imports reached +4.2%.

Exports were in-line month over month, -0.3%, while the revision for September ratcheted down quite a bit, from -0.8% to -1.5% in the rearview mirror. Year over year, this number is a tad down from expectations at +6.9%; revisions to September went from +9.5% originally reported to +9.2% this morning. Yet even these remain a far cry from the +18.2% we saw back in both May and June.

Target (TGT - Free Report) underperformed expectations in its Q3 earnings report out this morning, posting $1.54 per share. This was well off the $2.15 in the Zacks consensus, but much better than the $0.03 per share in the year-ago quarter. Revenues in the quarter of $26.57 billion slipped past the Zacks consensus by +0.62%. Shares are down more than -15% on the news, following Target’s already sub-par -23% year to date. For more on TGT’s earnings, click here.

Lowe’s (LOW - Free Report) had a better time of it in its Q3, as we see home-fixing (and updating, as with the strong furniture Retail Sales figure we saw this morning) adding to the company’s top and bottom lines. Earnings of $3.27 per  share outpaced the $3.11 expected, and gained more than 50 cents per share from a year ago. Sales of $23.48 billion was +1.67% higher than estimates. Shares are up +2% in early trading, but still -18% year to date. For more on LOW, click here.

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