Morgan Stanley Forecasts Slowing Holiday Sales Growth

By Tonya GarciaMarketWatch Pulse

Holiday retail sales growth is expected to slow from last year's levels despite consumers' improved financial health, according to Morgan Stanley . The bank estimates 1.2% comparable-store sales growth for softlines - retailers selling items like clothing and accessories - compared with 2.8% last year because of a warm winter and a challenging comparison with last year's numbers. Morgan Stanley estimates 3% comparable-store sales growth at hardline and broadline retailers, which includes categories such as appliances and electronics. "While 3% comps are healthy on the surface, they are being held back by spending on big ticket durable goods as well as communication services," Morgan Stanley wrote in a report. The bank also said competition across online and off-line channels will distribute growth unevenly. Nike Inc. , Lululemon Athletica Inc. and Best Buy Co. Inc. are in a good position for the season, according to the report, while DSW Inc. and Steve Madden Ltd may see difficulties.

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