Another Confirmation Around the Corner?

 | Nov 14, 2013 | 2:00 PM EST
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There's confirmation from Wal-Mart (WMT) and Kohl's (KSS): all of retail is not winning. 

As we talked about yesterday on "Power Lunch," a few good retail reports don't make a holiday season. Here is the deal. Companies that are surprising to the upside are best in class (L Brands (LTD), Macy's (M), TJX (TJX) and American Eagle Outfitters (AEO) are the best of bad lot). The rest may simply continue to limp along in the market-share tug of war (JC Penney (JCP), Kohl's (KSS), Sears Holdings (SHLD), Abercrombie & Fitch (ANF), Aeropostale (ARO), etc.).

We suspect another confirmation is around the corner this evening in the form of Nordstrom (JWN) earnings. JWN falls in the best-of-breed bucket and while the consumer demographic is different than Macy's, the two companies have a lot in common. Most importantly, both recognized the importance of omnichannel early in the game and took the investment hit. To quote another CEO early adopter, "omnichannel is like breathing."

Unfortunately, many retailers are just learning how to breathe. Also like Macy's, Nordstrom is localizing product and upgrading the sales force. Yes, people and product matter. Finally, don't forget while JWN is insulated by an upper-income consumer, the company also has The Rack off-price channel (think TJX positive preannouncement). 

Now that is a retail BOGO (buy one get one).

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