Retail just found the solution to tough comparisons in February: Snowstorm Nemo.
Last Friday, while parts of the Northeast were still recovering from the wreckage of Hurricane Sandy, Nemo came along and buried the area in up to three feet of snow. The storm hit at the worst time for retailers, landing on a Friday and blocking many would-be weekend shoppers from leaving their homes. Countless New York, Connecticut, Rhode Island and Massachusetts residents could not even open their front doors, let alone drive to the mall.
That brings me to the retail blame game. We heard it when November same-store sales were reported. Many retailers even quantified the impact of Sandy's retail pain. The storm was blamed for weaker November sales, from Target (TGT) to Macy's (M). And the November blame game was completely legitimate, as up to 20% of a typical U.S. retail store base was in the storm's path. However, the blame game lasted only so long as holiday numbers disappointed.
So now here we are, just four days after retailers reported January sales numbers that blew away expectations in most cases. Nemo came along just a day later to rain (well, snow) on our retail parade. The storm also came along just as fresh spring merchandise is set up for display in stores. So here we go again, finding a retail scapegoat.
Now here is the good news. Those outstanding January sales results gave way to stocks trading down. Why? Remember last February and March, when spring arrived early and skinny color jeans were flying off the shelves? Retailers can't pin their hopes of a repeat, and as a result, we might hear some pretty conservative guidance over the next few weeks.
Add a little Nemo blame in the mix, and we may just set the bar pretty low for the first quarter.
And the best piece of news for retailers? Same-store sales reports are now a thing of the past for most retailers. That means the best of the lot have time to recover from the likes of Sandy and Nemo without calling out February results to the Street.
For companies that are still reporting monthly results, including Gap (GPS), watch for tough comparisons in February and another round of the Nemo blame game.