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Tickers in this Article: JWN, M, HOTT, ANF, JCP
If we're still in the throes of a recession, you sure couldn't prove it by retail sales trends. February was a great month for more than a few retailers, and those numbers may point to a bigger, investment-worthy reality.

Some analysts caution that we need not read too much into February's results, as it's one of the weakest sales months of the year, and makes up only about one-quarter of the first calendar quarter's total. On the flipside, if it's compared to the same weak month from a year earlier, it's still progress - and it's not the first month we've seen improvement.

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Just The Facts
Abercrombie & Fitch (NYSE:ANF) was by far the Cinderella story last month, posting a 5% increase in same store sales versus the analyst-expected decline of 6.9%. Total sales were up by even more. Competing in the same teen-consumer space is Hot Topic (Nasdaq:HOTT). Though the company saw a same store sales decline of 7%. That's still better than the anticipated dip of 13%. And it wasn't just teen-oriented names with impressive increases.

J.C. Penney's (NYSE:JCP) February sales were up 1.2%, which also happened to be the first year-over-year progress the company has seen in two years. Macy's (NYSE:M) improved sales by 3.7%; Nordstrom (NYSE:JWN) saw a whopping 10.3% increase in year-over-year revenue in February.

All told, major retailers generated a 4% increase in same store sales, verses the expected 2.9% improvement. And here's the real kicker - all of this happened despite a snow storm that was expected significantly crimp revenue. Was it a stroke of luck? Low comps? Or, a real sign of strengthening?

The Rest Of The Story
While the company-specific results are aligned with the notion of a broad economic recovery, in some ways it's just anecdotal. The other question regarding the retail sales trend is its sustainability. And, that's where the picture gets even more encouraging.

February was not only the best monthly (year over year) rise in two years, it was the sixth straight month of improvement. Granted, we're comparing the last six months to a six-month period in late 2008/early 2009 that was pretty much financial Armageddon, but better is better, and that's a trend that's not likely to stop soon.

Why's that? Believe it or not, consumers can actually afford the higher levels of spending we're seeing. Personal incomes have been up - albeit barely - for the last few months. It turned positive on a year-over-year basis in January. Spending has been improving as well, turning positive on a year-over-year basis late last year.

The real confirmation that we're slipping back into our spending habits reared its ugly head in January though - the saving rate actually went down for the first time since September, from 4.2% to 3.3%.

The Bottom Line
Old habits die hard, and the retailers can confirm it. Look for more sales growth going forward. (To learn more, see Analyzing Retail Stocks.)

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