A steeplechase for Shetland ponies

When I woke up before the crack of dawn this morning to review April's retail sales, I was expecting that things would be better than expected. I didn't get it posted to the blog, but if you're following me on Twitter (see the side bar to the right) you saw my notes from last weekend's mall walk. For the first time in months, malls were busy last weekend. People were parting with cash. Not large amounts of cash. But parking lots were fuller and more bags were being carried in greater quantity than I'd seen in my last 2 months of mall walks. Call it a smallish bounce off the bottom, but whatever you do, don't call it a return to a need for Spendaholics Anonymous.

My view is born out in this morning's comparable store sales numbers. Wal-Mart, bastion of the 'Save Money, Live Better' crowd beat expectations handily. Aeropostale, the poor man's value-conscious shopper's Abercrombie & Fitch, hit it out of the park with a 20% comp gain on the back of a 25% gain this time last year. Amazing. Oh, and the real Abercrombie? Down -22%. Price/value matters, folks. The shopper is spending, but they're being careful about how much and where.

Case in point on that value thingy? Sak's same store sales down over 31%. Nordstrom was 'only' down 10.8%, better than expected and more in line with Macy's (down 9.1%) because JWN has added more offerings at lower price points. Ross, TJX - both up nicely. Kohl's & JCP? Sales down, but not as much as expected... Q1 guidance raised. Thing is, you can only manage inventory and costs so much, eventually you have to have sales or make more drastic adjustments that will cause hate and discontent amongst the shoppers and perhaps shareholders.

The big questions now surround guidance for the second quarter and beyond as well as healthy scrutiny of Wall Street analyst's earnings estimates. The latter worries me more than the former. I've never known a group of folks more likely to take two data points and draw a straight line than the lemmings of Wall Street. It should be intersting to see how many different ways folks can justify owning these stocks at these valuations in this economic environment.

But if the retailers and analysts set the bar low enough, it will be just like a steeplechase for Shetland ponies - such an easy hurdle that almost anyone can get over it. I suppose in that environment you should consider shorting those that still trip themselves up.

By the way, if you're interested in hearing this morning's Bloomberg interview, click here.