Retail stocks continue to make a comeback
after last week's earnings worries. The SPDR S&P Retail exchange-traded
fund (XRT), which includes retailer stocks in the S&P
500, jumped 4.8% today.
First-quarter earnings season has been marked
by high-profile misses by Walmart, Target,
and others. The retailers have shown rising revenues but compressed profit
margins, as costs soared even faster. Management commentary about the strength
of the consumer added to worries plaguing the broader market.
This week's retailer earnings have been
significantly more promising, though. Results from Nordstrom,
Williams-Sonoma, and Macy's
have been strong, and managements' guidance has been good or at least less
gloomy.
“While macroeconomic pressures on consumer
spending increased during the quarter, our customers continued to shop,” Macy's
CEO Jeff Gennette. said last night. “We
saw a notable shift back to occasion-based apparel and in-store shopping, as
well as continued strength in sales of luxury goods.”
The department-store chain raised its profit
guidance for the full year, as did Nordstrom earlier this week. Macy's stock
soared 19.3% today, following its results Wednesday evening.
But it's not just the better-heeled shoppers
who can withstand inflationary pressures that are still spending, as Walmart
and Target's results seemed to suggest. Rival dollar-store chains Dollar
Tree and Dollar General both did just fine
in the first quarter, and boosted full-year guidance to boot.
Turns out, they could be beneficiaries of
the inflationary environment we’re in. Consumers paying extra attention to
their budgets have been seeking out discounts at dollar stores, it appears.
Dollar Tree stock soared 21.9% today, while
Dollar General jumped 13.7%.
After today's close, Costco
Wholesale added its own revenue beat. But with shares rising
almost 6% in today's trading, investors seemed to be expecting good news.
Shares declined slightly in after-hours trading.
Read Barron's coverage of each of the
retailers' reports below:
·
Macy's
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