Retail Roundup: Super Saturday

 | Dec 18, 2012 | 10:00 AM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

jwn

,

sks

,

kors

,

rl

After weak same-store sales in November, it looks like all the high-end apparel retailers went off the fiscal cliff. Nordstrom (JWN) and Saks (SKS) are about 10% off their 52-week high. Apparel makers Michael Kors (KORS) and Ralph Lauren (RL) are down between 13% and 16%. But I think this weekend will prove to be a blockbuster. In fact, so-called "Super Saturday," also known as the last weekend before Christmas, could be bigger than Black Friday.

According to a survey done by Visa (V) , 73% of consumers still have presents to buy. Retailers blamed Hurricane Sandy and the election for a weak kickoff to the holiday season, but this year there are maximum number of days between Thanksgiving and Christmas. Retailers expected a two-week lull after Thanksgiving, but spending is about to heat back up again.

According to MasterCard Advisors SpendingPulse research, last year Super Saturday fell on Christmas Eve and only generated a meager $12 billion in sales. But, with a full weekend ahead of consumers, SpendingPulse is expecting sales to top $18 billion. In fact, sales for the 10 days before Christmas are expected to exceed $147 billion. More than 50% of all jewelry and luxury sales are expected during this time.

Back in October, I thought Michael Kors would continue to blast higher and reach the low $60s. I still do. KORS is on trend and unlikely to slow anytime soon. A whiff of good news will send the stock much higher.

Last February, I had concerns about Ralph Lauren's valuation. At the time, the stock was flying higher on blowout numbers. A bunch of rookie shorts were squeezed to death and the stock hit $182. Ten months later, RL's valuation is less of a concern. The company should have a solid holiday season. I think investors can ride this pony higher.

Nordstrom's and Saks have been on a roller coaster all year. Last month, I thought Nordstrom's incredible streak of double-digit comps were coming to an end. It seemed to me the company would settle back down into the mid-single digits comp area, which isn't a formula for outperformance. Likewise, on the last conference call, Saks management also guided same-store sales to the mid-single digits. While I think Nordstrom is better managed than Saks, I don't think either of them will outperform. My advice: Stick with the stuff inside the stores and avoid the mall this weekend.

Columnist Conversations

Amazon (AMZN) and others offering 'free shipping' on relatively small orders are finding they often lose money...
I've read recently quite a few comments about how Chinese stocks are cheap and investors should jump in. ...
Just some resistance to be aware of. Not saying it will cap the market, just that it is there for a decision....
Shares of Amazon (AMZN) are trading down below the 50% retracement level of their 2014 range in the after-hour...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.