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FTI Consulting (FCN) Projects Lackluster Holiday Retail Sales

AMZN ACN NCI FCN

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Global business advisory firm FTI Consulting, Inc. (FCN - Free Report) recently unveiled its 2016 U.S. Holiday Retail Report. Per the report, sales growth is expected to be sluggish despite merchants’ efforts to persuade shoppers.

The company’s retail and consumer products are expected to witness 3.3% growth in sales for the season. The current growth projection is roughly in line with the 3.4% sales growth last year. The marginal fall in sales is primarily attributable to tempered income growth and household wealth gains during the season.

The company anticipates the upcoming holiday season to be another lackluster one for the retailers as consumers continue to curb expenses.

Traditional retailers have been adversely affected by their online counterparts such as Amazon.com, Inc. (AMZN - Free Report) . In addition, high promotional activities for boosting footfalls put a strain on their financial performance as operating margins and return on investment have trended lower for the past three years across nearly all retail segments. In-store sales have declined continuously, whereas non-store sales, including both online and catalog purchases, have improved in the low double digits.

On Nov 1, 2016, FTI Consulting launched its U.S. Online Retail Forecast: Omni-Channel Retailing Challenged. According to this report, U.S. online retail sales are expected to touch $440 billion in 2017 and $562 billion by 2020.

FTI Consulting’s U.S. Online Retail Forecast model is a result of imposing the best-fitting logistic curve on historical online sales data by product category. Since 1999, the U.S. Census Bureau has published online retail sales estimates in numerous product categories. Based on these time-series data sets, FTI Consulting has estimated online market shares for these categories since the start and derived a suitable logistic growth equation for each market share to anticipate online sales and market shares in the coming years. The online sales forecasts by product category are thereafter combined to obtain a bottom-up forecast.

FTI Consulting currently carries a Zacks Rank #4 (Sell). A couple of better-ranked stocks in the same industry include Accenture plc (ACN - Free Report) and Navigant Consulting Inc. (NCI - Free Report) . Accenture carries a Zacks Rank #2 (Buy), whereas Navigant sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Accenture has a modest earnings record, beating estimates thrice in the four trailing quarters with an average positive surprise of 3.19%. The company’s share price has increased approximately 11% year to date.

Navigant, however, has a solid earnings record, beating estimates in all of the four trailing quarters with an average positive surprise of 29.31%. The company’s share price has increased approximately 47.88% year to date.

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