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3 O'Clock High: Same-Store Sales Preview

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What does 'The Street Expect?'

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Same Store Sales data: What is it?

Retailers release their monthly Same Store Sales figures the first Thursday of every month. The chains will customarily give some 'color' on the results in terms of promotional activity, the outlook for EPS and, if numbers were soft, likely some type of excuse involving weather or oil or whatnot.

Do SSS Matter?

Tomorrow's numbers and commentary will, for sure. December is the biggest month of the year for the retailers. This effect has been muted, to an extent, by earlier promotions and gift cards stretching out the holiday season. Still, December is the Big Daddy. If a company misses their SSS estimates then offers up some tripe along the lines of 'Gift Cards are going to make January HUGE,' they are lying to you.

Gift Cards: No, they don't really matter.

Gift Cards are not the trend of the future. They are not a nice alternative to putting 'thought' into a present. They are not going to save any retailers.

Gift Cards are best for retailers if they never get redeemed. This happens quite a bit, actually, which is why companies have begun to count the revenues at the time the card is purchased rather than when it is redeemed.

Everyone has Gift Cards at this point. They have no novelty and declining appeal to both givers and recipients.

What does 'The Street Expect?'

The Street seems to be coming around to the idea that margins will be soft for Christmas '05. Wal-Mart (WMT) released SSS of 2.2% on Monday which was at the low end of estimates.

The players with the most to lose are Abercrombie & Fitch (ANF) and Chicos (CHS) which have been riding rather impressive winning streaks.

December's results are unusually murky going into the data. I still think the numbers are a bit high but I'm not sure not how much of the data is already 'in' the retail stocks, which haven't been setting the world on fire of late.

I'll have the Retail Round-Up out before the bell. The data will certainly color the early tape so tune in to see if we can't get our arms around it together!

Position in BBY

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