Don't Be Fooled: Retail Sales Were Strong

Many of the consumer naysayers have continued to warn of gloom and doom because Thursday's retail reports were merely respectable, rather than mind-blowing. But May same-store sales were stronger than much of the media would have you believe.

Thomson Financial's index measuring same-store sales climbed 2.9%. Excluding Wal-Mart (WMT Quote), the index jumped 4.4%, "suggesting the consumer is fully engaged," according to Thomson analyst Jharonne Martis.

The index's rise was stronger than Thomson's forecast Wednesday for 3.7% same-store sales growth. Despite higher gas prices, what appears to be an idling economy, locusts, hail and whatever other plagues can be blamed, the consumer is still willing to spend if stores offer merchandise that resonates with him or her.

As expected, the luxury category was strong in May, led by Saks (SKS Quote). The company reported an extraordinary 37.5% rise in same-store sales, on top of a 1.1% rise last year. That was in part due to a shift in its promotional calendar, and as a result Saks expects June same-store sales, or comps, to decline.

Nordstrom (JWN Quote) also had solid sales, posting a 6.3% rise in comps, much stronger than the 2.6% anticipated by Wall Street. More impressive is that this year's figure comes on the back of last year's 7.8% growth.