Wal-Mart Stores, Inc. (WMT), Kohl’s Corporation (KSS), Nordstrom, Inc. (JWN): Three Retailers That Will Benefit From Improving Consumer Confidence

The 25% increase in household wealth noted in upper income households should benefit higher end retailers, like Nordstrom, Inc. (NYSE:JWN). The company’s current outlook is for an increase of 4%-6% in total sales and an increase of 3%-5% for same-store sales. Nordstrom, Inc. (NYSE:JWN) stood by its 2013 annual EPS guidance of $3.65 to $3.80 a share, which includes first-quarter results and incorporates the expected increase in 2013 same-store sales. The guidance also takes into account share repurchases that took place in the first-quarter, which can increase diluted EPS by $0.05.

Outlook

As the economy continues to show signs of improvement, consumer confidence and spending should continue to improve. Low cost retailers, such as Wal-Mart Stores, Inc. (NYSE:WMT) and Kohl’s Corporation (NYSE:KSS), should continue to attract consumers with their low prices and should maintain higher profitability if they manage to keep operating expenses low as a percentage of sales, also known as leveraging their expenses. Consumers in upper income levels are already showing signs of life, which will benefit retailers such as Nordstrom, Inc. (NYSE:JWN).

Investors should keep a close eye on continuing gains in future household income and improvements in the job market to drive greater consumer spending. These retailers can expect their sales to gradually bounce back.

The article 3 Retailers That Will Benefit From Improving Consumer Confidence originally appeared on Fool.com and is written by Eileen Rojas.

Eileen Rojas has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Eileen is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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