The Big Picture
Retail sales inched up by 0.2% last month — not quite the 0.6% boost analysts anticipated, as frigid weather and market jitters kept shoppers at bay. This cautious consumer sentiment echoed the latest confidence numbers, which dropped by 11%.
Concerns over tariffs and the ongoing battle with inflation are keeping both consumers and the Fed on edge.
But it wasn’t all cloudy skies. Home sales showed a promising 4.2% increase, hinting that buyers are shaking off their winter slump. Plus, the job market remains steady, providing a solid foundation amid the economic turbulence.
February Trends
Overall sales dipped 1% across our client stores last month, but there were bright spots worth celebrating. Men’s Clothing, Sport Coats, and Special Orders saw modest growth in the low single-digits.
Menswear posted a 1% gain, and women’s wear slipped 2%, partly due to February’s shorter selling window.
In women’s wear, Ready-to-Wear and Special Orders took the biggest hit, but Day Dresses saw a nice boost.
As the season unfolds, we anticipate a lift in dresses in general, and men’s wovens, so stay tuned for sunnier sales ahead.
Staying Agile
With market swings and tariff talk stirring uncertainty, it’s crucial for retailers to tighten up cash flow planning. Aim to keep any negative open-to-buy (OTB) under 90 days. Start by making adjustments at the class level to stay nimble.
And those potential tariffs? Don’t let them throw you off your game. Instead, see them as a chance to boost margin dollars by marking up the higher prices in the short term. Adaptability is the name of the game in this unpredictable climate.
Blacks’ Bottom Line
In these choppy waters, it pays to stay vigilant. Keep a sharp eye on negative OTB, and hold back at least 20% of fall purchases for in-season opportunities.
