February retail sales rebounded from a lower January reading as consumers spent more on home improvements, cars and electronics.
Retail and food services sales grew by 0.6% from the prior month, according to US Census Bureau data published March 14. Sales slightly underperformed economists' expectations of a 0.7% increase, according to data compiled by Econoday.
Three retailers filed for bankruptcy between mid-February and mid-March, while the median default risk across retail categories dropped.
Retail sales
US retail and food sales totaled $700.73 billion in February, up from a revised $696.71 billion in January. Total sales from December 2023 through February 2024 were up 2.1% from the year-ago period.
Strong growth in online shopping, which constitutes the lion's share of the nonstore retailers category, helped drive the increase in sales over those three months. The category grew 7.7% in the three months through February compared to the same period a year earlier. For February alone, nonstore retail sales rose 6.3% year over year.
Food services and drinking establishments' sales were similarly robust, up 6.3% annually.
On a monthly basis, consumers spent 2.2% more with building material and garden equipment retailers and 1.6% more with motor vehicle and parts dealers, though the former category remained well below the previous February's sales figures.
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Furniture and home furnishing stores struggled to gain momentum over the month, declining by 1.1% from January and down 10.1% year over year.
Bankruptcies
Fitness equipment company BowFlex Inc., furniture and home goods retailer Polished.com Inc. and cosmetics retailer Buth-Na-Bodhaige Inc., which does business as The Body Shop, all filed for bankruptcy during the month ended March 14.
Bowflex has entered into a purchase agreement with Johnson Health Tech Retail Inc., which will acquire the company's assets for $37.5 million. Polished.com and The Body Shop both filed for Chapter 7 bankruptcy, which involves a total liquidation of assets and termination of operations.
Six retailers have sought bankruptcy protection since the beginning of the year, up one from the previous year's total by mid-March.
Default risk
The median default risk for all retail categories decreased from 2.3% in mid-February to 2% in mid-March as most sectors saw a drop in risk over the month.
Default risk was highest among drug retail, household appliances and personal care products companies, with all three registering an increase month on month.
Computer and electronics retailers' risk of default fell by the greatest margin, dropping from 3.4% to 2.2%.
Scores produced by the model represent the odds of default within a year and are based primarily on the volatility of share prices for public companies in the sector, accounting for country- and industry-related risks.