• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Consumer Discretionary

Cramer: Kors Numbers Show a Lot of Retail Is Still Uninvestible

Until they realize the secular shift away from malls, retail names are just playing the victim.
By JIM CRAMER
Feb 07, 2017 | 11:31 AM EST
Stocks quotes in this article: KORS, TGT, NWL, GPS, SHLD, CRI, NKE, GT, WHR, JCP, HBI, HAS, HD, CLX

You can't be hostage to the mall. This morning, Michael Kors (KORS) reported a number that looked pretty good on the surface -- but when you dug down, you could see a distinctly negative quarter and a totally suboptimal forecast. The culprit? Department store traffic.

It never seems to end, and it shows that even the highest-end, the best, is not immune to the lack of customers walking around doing some shopping. At one time, it was known as the great American pastime. But no more.

The call took my breath away. Once again, it showed very strong e-commerce numbers, something a company has to show in addition to foot traffic -- not to the exclusion of it, which is what Target (TGT) saw. And this secular shift in how people spend is just crushing a whole industry.

We saw the same thing yesterday, when Newell Brands (NWL)  -- which sells a huge amount of product, including all of those Jarden appliances, Sharpies and Rubbermaid containers, in stores like Target -- signaled that the mall was quite a challenge. It's got to the point that even mentioning the mall on a conference call is the kiss of death. They are dying shrines to the old way of spending.

Even when retail looks good, it's bad. I thought The Gap's (GPS) same-store sales were improving, especially the global flagship, but the market would not hear it -- and the stock couldn't rally even when the surface numbers appeared to be fine.

We have to start wondering what could happen to Sears Holdings (SHLD) now that its stock is at $6. Real Money Contributor Brian Sozzi this morning laid out all of the suppliers who might be dinged, given what the action in SHLD foreshadows: Carter's (CRI) , Nike (NKE) , Land's End, Goodyear (GT) and Whirlpool (WHR) , are just a few. I know you may think that Sears and Kmart don't matter, but the company did have $23 billion in sales in the last twelve months and that's nothing to sneeze at.

Of course, the consequences of Sears' endless shrinkage has been to the benefit of JC Penney (JCP) , because they often share malls, and Home Depot (HD) , which highlighted (although not by name) Sears Holdings' share-donor status.

Suffice it to say, though, that if a retailer does go under, as we saw with Sports Authority, everybody gets hurt initially from any liquidation. But it is worth reminding ourselves that one bandaid on the secular decline injury would be closings, and another would be mergers. They just haven't happened yet.

But the fate of Kors and Hanes Brands (HBI)  -- and even Action Alerts PLUS holding Newell Brands (NWL) , which I think can pull out of it because of its "necessity" story -- doesn't have to be the fate of all suppliers. You have to be more inventive -- as is the case with Hasbro (HAS) , which talks about being more experiential and more entertainment-oriented.

Hasbro has the advantage of being a gaming company that's linked to movie franchises, but it has been creative and in touch enough with its customers to know that they are looking for the "tie-in" to the doll, not just the doll, and that each feeds the other -- hence its desire to make movies itself.

Another company that is changing its fate is Clorox (CLX) , which has shifted aggressively to online advertising and online selling as a concession and recognition of the drop in traffic to the regular outlets.

Most of the suppliers, though, are just playing the victim. They haven't reinvented. They haven't even figured out e-commerce, because they never thought their brick and mortar merchandisers would let them down. Until they recognize the secular downshift, they are doomed to have more numbers like Kors did today, and that makes the sector just plain uninvestible.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long NWL.

TAGS: Investing | U.S. Equity | Consumer Discretionary | Earnings | Markets | Stocks

More from Consumer Discretionary

4 More Unloved Stocks Going Into My Latest Tax-Loss Selling Portfolio

Jonathan Heller
Dec 6, 2019 11:00 AM EST

We'll track a dozen beaten-up stocks that could be subject to tax-loss selling at the end of 2019 to see whether they can stage comebacks in 2020.

Ready, Set, Go: Nike Could Break Out to the Upside

Bruce Kamich
Dec 5, 2019 11:09 AM EST

Let's check the charts and technical indicators before we lace up a recommendation.

Sector Geography Lesson, Japan's Stimulus and Zooming In on Zuora: Market Recon

Stephen Guilfoyle
Dec 5, 2019 8:48 AM EST

Plus, the Saudis look to press their oil agenda while Europe prints some ugly economic data.

Mattel May Be Done Declining but the Bull Case Is Not Compelling

Bruce Kamich
Dec 5, 2019 8:41 AM EST

Let's review the charts.

It Was a Very Good Year for This Portfolio of 2018 Losers

Jonathan Heller
Dec 2, 2019 11:00 AM EST

The dozen stocks in this portfolio of companies that likely came under tax-loss selling pressure last year performed quite well as a group in 2019.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:02 AM EST BOB LANG

    Added Some Peleton

    This stock is starting to gain some traction, the ...
  • 01:06 PM EST CAROLYN BORODEN

    MRK and LVS Targets Coming Up

    View Chart » View in New Window »  LVS View C...
  • 12:01 PM EST BOB LANG

    Rolling Up Apple

    Just the other day we added some Apple calls on th...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2019 TheStreet, Inc., 14 Wall Street, 15th Fl, NY, NY 10005

Need Help? Contact Customer Service

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

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.

FactSet 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.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login