Canaccord Genuity Morning Coffee on SPDR Retail ETF (XRT) - Back to School

Canaccord Genuity Morning Coffee on SPDR Retail ETF (NYSE: XRT): "Back to school. Back to school, to prove to Dad that I'm not a fool." – Billy Madison.

August was a solid month for U.S. retailers, with most posting better-than-expected sales numbers driven by back to school shopping. Same store sales at retailers that report monthly results rose by 3.6% in August, topping for forecasts of a 2.0% increase. Highlights for retailers included: 1) Gap (NYSE: GPS) posted a 9% increase, well ahead of the consensus 5.4% estimate. Old Navy was particularly strong, rising by 12%; 2) TJX Cos (NYSE: TJX), parent of TJ Maxx, said it now expects earnings to come in at the high end of its $0.56 to $0.59 per share guidance in Q3; 3) Nordstrom (NYSE: JWN) received a big boost from its Anniversary Sale which helped sales increase by 21% while analysts were expecting 11.1%; and 4) Target (NYSE: TGT) said sales were stronger in the back half of August as shoppers looked for value in their back to school shopping. While the results were positive, they were not enough to propel the S&P Retail Index into the green, as Sears Holdings (Nasdaq: SHLD) was pummeled after being removed from the S&P 500.

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