Accelerated Tax Refunds Driving the Surprising Top-Line Strength?
Last week (week of February 22nd) many retailers shocked the analyst community when companies universally suggested that February’s comp store sales versus last year were trending positively. This week, many of these retailers followed-up with surprisingly strong top-line numbers.
How was this possible? Many of us are hard-wired to believe that snow = top-line weakness versus the prior year. February 2010 was a heavy snow month.
CATO suggested on its press release yesterday that February 2010 “benefited from a shift in timing of income tax refunds.” While CATO is a micro-cap retailer, their monthly press releases are “must-see TV” since they’ll usually provide some insight into the top-line benefits during a particular month that all the others fail to acknowledge.
Below is a link to a Zero Hedge blog entry that discusses this topic. Have consumers pulled forward their spending this tax refund season? We still believe that there has been a material top-line boost in January/February for survivors this year via a lack of liquidation sales versus LY, but the accelerated tax refund thesis sounds plausible as well.
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on Friday, March 5th, 2010 at 8:21 am and is filed under Commentary.
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Accelerated Tax Refunds Driving the Surprising Top-Line Strength?
Last week (week of February 22nd) many retailers shocked the analyst community when companies universally suggested that February’s comp store sales versus last year were trending positively. This week, many of these retailers followed-up with surprisingly strong top-line numbers.
How was this possible? Many of us are hard-wired to believe that snow = top-line weakness versus the prior year. February 2010 was a heavy snow month.
CATO suggested on its press release yesterday that February 2010 “benefited from a shift in timing of income tax refunds.” While CATO is a micro-cap retailer, their monthly press releases are “must-see TV” since they’ll usually provide some insight into the top-line benefits during a particular month that all the others fail to acknowledge.
Below is a link to a Zero Hedge blog entry that discusses this topic. Have consumers pulled forward their spending this tax refund season? We still believe that there has been a material top-line boost in January/February for survivors this year via a lack of liquidation sales versus LY, but the accelerated tax refund thesis sounds plausible as well.
http://www.zerohedge.com/article/do-accelerated-tax-refunds-explain-year-date-consumer-strength-and-record-low-government-tax
This entry was posted on Friday, March 5th, 2010 at 8:21 am and is filed under Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.