Consumer confidence is on the up and up again.
After logging a decline in March, The Conference Board’s index stands at 129.2 for April, compared with the 124.2 reported for the month prior.
The index — tallied by the nonprofit organization in partnership with Nielsen — is expected to dip and rise modestly from month to month in conjunction with key economic events. However, Lynn Franco, senior director of economic indicators at TCB, noted it still remains below levels seen last fall.
Nevertheless, she added, consumers are generally optimistic and largely “expect the economy to continue growing at a solid pace into the summer months. These strong confidence levels should continue to support consumer spending in the near term.”
It’s good news for the retail industry — as brands and retailers wade through various strategies for improving omnichannel and spurring brick-and-mortar traffic — and follows a slew of recent upbeat reports about consumer sentiment. On Monday, the Commerce Department reported the biggest boost in consumer spending in nearly a decade.
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According to the Bureau of Economic Analysis, consumption across the United States in March jumped 0.9% — a marked improvement from the 0.1% in February and the upwardly revised 0.3% in January. It was the largest monthly increase since August 2009.
Just before that, the University of Michigan’s monthly Survey of Consumers found that consumer confidence rose to 98.4 in March, from the prior month’s 93.8 and recovering from its January slump, provoked by the 35-day partial government shutdown, escalating trade tensions and stock market volatility.
Despite an arguably solid macroeconomic backdrop — unemployment remains at record lows — it has been a mixed bag for traditional retail players.
E-tail behemoth Amazon continues to ride high — seeing seven straight weeks of stock gains as it reaps the benefits of digital prominence — while department stores such as JCPenney and bankrupt Sears struggle to resonate with shoppers.
Perhaps unsurprisingly, JCPenney announced in February its plans to close 27 more stores in conjunction with another round of slumping sales and earnings. Its Q4 sales were down 10 percent to $3.67 billion, missing the $3.79 billion analysts had predicted. Adjusted profits also took a tumble, sinking more than 60 percent over the comparable period to $57 million, or 18 cents per share, but were better than the 11 cents per share market watchers projected.
Its peers Macy’s and Nordstrom — which had both fared better than JCPenney at the height of the so-called retail apocalypse (especially Nordstrom) — each saw mixed finishes to the fourth-quarter after holiday sales across the space largely missed lofty expectations.
Seattle-based Nordstrom said its earnings for the three months ended Feb. 2 were $1.48 per share, ahead of the consensus estimate of $1.42. Comparable sales were mostly flat, growing 0.1 percent over the same period last year. While sales at Nordstrom’s off-price Rack stores grew 4 percent, full-price comparable sales declined 1.6 percent for the quarter, which the company said was due to slower traffic in stores.
Macy’s, meanwhile, saw its fourth quarter profits come in above analysts’ forecasts at $2.73 per share, but this still represented a 4 percent dip over last year, and CEO Jeff Gennette said the retailer’s holiday sales didn’t meet its expectations.
Kohl’s, which was an early adapter to the “store shrinking” retail strategy and is quickly expanding its partnership with Amazon, has emerged as a somewhat unlikely frontrunner in the department store space.
Investors last month sent its shares climbing after it posted Q4 revenues of $6.82 billion, a 3 percent dip over the prior year’s same period but higher than the $6.58 billion market watchers projected. The company also said its Q4 adjusted profits advanced 17 percent year over year to $366 million, or $2.24 per diluted share, besting the $2.18 per share analysts forecasted. This month, Kohl’s got the market buzzing again when it announced that it was expanding its existing deal with Amazon starting in July, allowing customers to make returns from the e-tail giant to its brick-and-mortar locations with no additional fees.
The program, which launched in 100 pilot stores less than two years ago, is set to roll out in the retailer’s more than 1,150 outposts across the country. Kohl’s expects the partnership to positively impact sales, as more foot traffic could persuade shoppers to make purchases after they’ve returned their unwanted items. Amazon, meanwhile, will enjoy new benefits from making returns even more hassle-free and convenient for many of its customers.