Dana Telsey, CEO and chief research officer of Telsey Advisory Group, breaks down what she’s seeing from US consumers as shoppers look for back-to-school deals and contend with the impact of tariffs on prices. Key retailers like Kohls and Abercrombie & Fitch are set to report earnings Wednesday afternoon.
Kohl’s Corp. shares surged after it offered a more optimistic full-year sales outlook, the latest indication that consumer spending hasn’t yet run out of steam.
The company now expects comparable sales to fall no more than 5% this year, an improvement from its prior forecast that sales would decline as much as 6%. The company also reported second-quarter sales that were better than Wall Street estimates.
Retailers continue to point to sales momentum from US shoppers shrugging off worries about tariffs and and inflation. Earlier this month, TJ Maxx owner TJX Cos. and Ross Stores Inc. indicated that Americans are willing to spend, but are looking for cheaper options.
The momentum cuts against signs that Americans continue to worry about the economy. A measure of consumer confidence fell in August on growing concerns about the job market. Unemployment and limited salary increases are contributing to consumer sentiment hovering at levels well below those seen prior to the pandemic.
Abercrombie & Fitch Co. also upped its sales forecast on strong back-to-school demand. Foot Locker Inc., which is being acquired by Dick’s Sporting Goods Inc., reported a 1.4% gain in North America comparable sales in the most recent quarter. The footwear chain’s European and Asia Pacific businesses, meanwhile, saw a 10% drop in sales.
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