How Should You Invest in October's Retail Numbers?

Earlier this week the U.S. Department of Commerce released strong retail sales numbers for the month of October. The numbers came in higher than predicted, which is especially surprising considering that the government shut down during the month.

Consumer Goods analyst Michael Finarelli thinks that a large part of this increase was due to many retailers using sales and promotions to get customers into their doors. While this is keeping sales numbers high, he thinks that its going to hit margins hard.

One company Mike thinks is taking an especially strong beating is Wal-Mart . The retailer's comps are down amid weak traffic, and Wal-Mart's going to have to provide deeper discounts than ever before to keep up with competition.


Meanwhile, fellow consumer goods analyst Sean O'Reilly thinks that Dick's Sporting Goods is going to continue seeing strength over the next few months. Sporting goods stores in general did very well in October, and Dick's recent earnings report illustrates the company's fundamental strength.

As Wal-Mart falls, who rises?
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

The article How Should You Invest in October's Retail Numbers? originally appeared on Fool.com.

Mark Reeth has no position in any stocks mentioned. Michael Finarelli has no position in any stocks mentioned. Sean O'Reilly has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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