Dividends and US retailers drop on slowing holiday sales

If you look around the suburbs of cities around the US, malls dominate the landscape and many people go shopping. Although every year there is more and more choice, people still go to malls to shop. Retailing and retail sales tells us whether people in general are confident about their future. If they spend, they expect to be able to pay the bills. If they do not spend, sales go down and everyone has to tighten their belts.

Nandita Bose and Saishwarya Venugopal of Reuters wrote an article about retail companies to see how the all important Christmas season did. The expectation is January and February are going to be slower months, but November and December can generate profits for the year. Macy’s slashed its full year profit and sales forecast on an anemic holiday season. Kohl’s also reported slower sales, Target reported higher sales.

Macy’s expects 2% growth rather than 2.3 to 2.5% growth. Kohl’s reported sales growth of 1.2% down from 6.9%. Target report 5-7% growth compared to 3-4% a year earlier.

Linking to dividend paying stocks, one of the best methods to measure confidence in the economy is retail sales. Although the companies own or lease at low rates of retail space it is easier to buy the card shoppers use to shop – Mastercard and Visa.

There are more questions than answers, till the next time – to raising questions.

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