U.S. retail earnings for the first quarter (ending April) are proving to be a perfect storm of strength, as ongoing tailwinds from government stimulus and discretionary budget savings from reduced services spend mixed with budding enthusiasm over vaccines, reopenings and some return to normalcy, according to Fitch Ratings. Industry behemoths such as Walmart, Target and Home Depot reported first-quarter 2021 revenue up 15 percent to 40 percent above first-quarter 2019 levels. Many categories are maintaining the strong trajectories experienced in 2020, with weaker segments such as department stores “joining the party” due to easing comparisons and a budding desire to refresh wardrobes in anticipation of more time spent outside the home.
More challenged categories such as department stores and apparel should see continued growth through 2021 although Fitch expects overall sales to remain below 2019 levels. Margins in 2021 should benefit from tighter inventory purchases, whic
