Zacks.com releases the latest Analyst Interview. Today’s interview is with senior analyst Rob Plaza, who discusses Dollar Stores (Nasdaq: DLLR), Wal-Mart (NYSE: WMT), GameStop (NYSE: GME), Zumiez (Nasdaq: ZUMZ) and Citi Trends (Nasdaq: CTRN).
A synopsis of today’s Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.
To what extent are things like higher gas prices impacting retailers directly?
Well, I’ve been writing about gas prices since February, and that was before they had breached the $3 mark. Now in many parts of the country, you’re getting average $3.25 or $3.50 a gallon. And that really hasn’t seemed to make a huge impact on most retailers.
I mean, it’s affecting your lower-end Dollar Stores (Nasdaq: DLLR) or discount operators. Wal-Mart (NYSE: WMT) has cited gas prices, as well as weather. People who make less money are now having to pay more, because there’s no way to avoid paying for when you go to fill up the tank. And that’s like an additional tax on their income, so that gives them less money to spend in the stores. It affects lower-income households much more than higher-income households.
You were also talking about the higher-income retailers doing well, but is that the only place you’re specifically seeing strength within your coverage?
No. I also said that you’re seeing the best-run retailers and still seeing strength in video games – so GameStop (NYSE: GME) is doing well. Teen retail, as long as they’re putting out the right merchandise, are doing well – Zumiez (Nasdaq: ZUMZ) is doing well. In my coverage list, I still like Citi Trends (Nasdaq: CTRN). Citi Trends is kind of stumbling right here, but they’re going to be doing well for the rest of the year. So you’ve got to pick your spots, but if you stick with higher-end and teen retail, you’re usually pretty safe.
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