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By Jason Stipp and Jeremy Glaser | 02-13-2015 09:00 AM

Friday Five: Not Much Gas for Retail Sales

Savings at the pump didn't spur much other retail spending in January. Plus, narrow-moat Gap looks like a bargain, while Coke and Amex deal with headwinds.

Jason Stipp: I'm Jason Stipp for Morningstar and welcome to The Friday Five, Morningstar's take on five stories in the market this week. Joining me with The Friday Five is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for being here.

Jeremy Glaser: You're welcome, Jason.

Stipp: Up first this week, we got retail sales data. It was down again in January. A lot of that was due to gas prices, but consumers aren't really spending on a lot of other stuff, either.

Glaser: Sales were off 0.8% in January from the previous month. That follows the decline that we saw in December, and you're right that gas was the biggest driver. As oil prices fall, people spend less at gas stations. That's pretty clear.

But one of the questions has been, will consumers take the savings from the pump and spend it elsewhere? Right now, the answer appears to be no: Excluding gas, sales were flat from the previous month. Although there were some bright spots at restaurants and some other areas where people were spending, generally, sales were flat.

There were hopes that lower gas prices combined with the employment picture were going to lead to a big boost in consumer spending, and that could help boost growth for the entire economy. It looks like those hopes might have been misplaced or at least premature, because as of right now, we really don't see evidence of that happening, and it seems the economy is still stuck in slow-growth mode.

Stipp: Negative currency effects have been one of the themes of earnings, and we saw that again this week with Coke. What's the story on their earnings report?

Glaser: Coke is one of these companies that's going to be really impacted by a stronger dollar, given how much of their earnings happen outside of the U.S. We saw that in the third quarter when they had disappointing results, and again here in the fourth quarter, as they announced this week they had a big decline in earnings because of that strong dollar.

I think for Coke and others, it's important to really look past some of the issues that are related to the dollar and look at the underlying business. Yes, the dollar is strong right now, but it probably won't be strong forever. It's impossible or very difficult to predict exactly where currencies are going, and trying to plan long-term investment decisions based on short-term or relatively short-term moves in currencies is going to be very challenging.

When you look at Coke's underlying business, it doesn't look quite as bad. Actually, they are showing volume growth in a lot of different geographies, they have rational pricing, they are doing a lot of things on the cost-cutting side that make a lot of sense right now.

Our analyst Adam Fleck thinks there is a lot of potential strength or potential growth there. He thinks they are going to be able to get to mid-single-digit earnings growth, excluding those currency issues, in 2015 and that there is still some runway for growth for the business as a whole in the years to come.

Shares are fairly valued right now. They did run up a little bit as this quarter was better than expected, even if it wasn't great, but certainly Coke is not in dire straits by any stretch of the imagination just because there is a strong dollar right now.

Stipp: Retailer Gap raised its fourth-quarter guidance, as it's doing pretty well.

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