Retail sales come in hot - see the standouts and disappointments
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Retail sales were up 3.0% in January to top the consensus expectation of analysts as consumers showed strength in the face of inflation and macro pressures.
The auto categories were strong during the month with a 5.9% month-over-month jump and 2.8% year-over-year gain. Those numbers bode well for Lithia Motors (LAD), AutoNation (AN), Group 1 Automotive (GPI), and CarMax (KMX).
Furniture and home furnishings spending was also a surprise with a 4.4% month-over-month increase and 3.8% year-over-year rise. There has been some caution that Lovesac (LOVE), La-Z-Boy (LZB), Williams-Sonoma (WSM), and Ethan Allen Interiors (ETD) would have a rough Q1.
Restaurant spending was up 7.2% month-over-month and was 25.2% higher year-over-year. Chains like Portillo's (PTLO), Red Robin Gourmet (RRGB), Wingstop (WING), Dutch Bros. (BROS), Chipotle (CMG), Shake Shack (SHAK) and Potbelly (PBPB) have been seeing a strong start to the year.
Grocery spending was only up 0.1% from the prior month, but was still 6.6% higher than last year with elevated pricing a boost. Kroger (KR) and Albertsons (ACI) have seen a drop in share price this year with investors becoming less defensive in general.
The biggest pullback in January may have been with e-commerce spending. The nonstore retailers category only saw a 3.0% year-over-year increase to run well below the overall 6.4% retail sales year-over-year increase. The category includes Amazon (AMZN), eBay (EBAY), Wayfair (W), and Etsy (ETSY). Part of that slower growth is being attributed to a post-pandemic dynamic.
The big beasts of retail were relatively flat in premarket action on Wednesday. Walmart (WMT) was up 0.05%, Target (TGT) fell 0.16%, and Costco (COST) was off 0.25%.