You know what's maddening about this market? The radical inconsistency that we see every single day in the retail stocks.
Take today. One of the best stories out there had been Burlington Stores (BURL), which has shown consistently positive comparable store sales ever since it came "re-public,"so to speak, after private equity fixed it up. Before private equity got involved you never knew how this company would do and if the winter wasn't cold enough than the Burlington Coat Factory, as it was called, broke your heart with bad numbers.
Here we just came through a very cold winter and Burlington reports and it shows a pretty dramatic deceleration in its comparable store sales growth, going from 2.7% to 0.8%. Burlington had been a terrific star since its IPO two years ago. Suddenly it's a burnout.
Then there's Five Below (FIVE). I do not have enough fingers to count how many times this retail has caused consternation, if not tears. One look at the chart shows how many occurrences where Five Below went higher going into a quarter only to have all hopes dashed by shockingly inferior numbers.
But this time around it posted a sensational quarter, amazing given how low the stock was as people had just given up on the darned thing. Apparently they gave up at the bottom.
Urban Outfitters (URBN) had been riding one of the best streaks in all of retail going into its last quarter. While there had never been problems at Free People for the longest time Anthropologie and the flagship Urban had failed to meet expectations. Then last year Anthropologie fell into place with some really amazing numbers. Soon after the flagship did the same. You finally had all cylinders firing and the company was crowing about it, hence the run-up from $30 to $47 from December until March -- when it lowered the boom and crushed everyone with a severe disappointment at the thought-to-be-red-hot Anthropologie. Ugh. Forty-seven goes to $34. It's trying to stabilize at the $35 level but do you trust it?
Then there's the heavily shorted lululemon (LULU), which has had a history of guiding down pretty consistently, almost like clockwork. It reports today, though, and suddenly it's nothing but net, a Stephen Curry three-pointer, swoosh! Oops, Swoosh is Nike (NKE), he wears Under Armour (UA). Still speaking of the swoosh, I found myself asking, after so many weak quarters, "Is this when Nike steps up and buys Lulu before its shares roar higher after what could be a major turn? Or is it a one-off good quarter and back to the baffling days past?"
Then there was the greatest department store turn in ages, the rebirth of the once-fabulous growth story Kohl's (KSS), which drove its stock from $56 in December of last year to $79 in April only to tell us, after that climb, that things aren't as good as they thought. Holy cow, that's been a one-way trip to $62.
But PVH (PVH), which had put up quarter after quarter of disappointment, to the point where it had given up all of the beautiful gains it put on when it purchased Warnaco three years ago, out of nowhere reports stellar international numbers from Calvin Klein, the label that came with Warnaco, and it's lights out: 15 straight points up.
I am telling you it's so inconsistent as to make you crazy, which is saying something coming from this madman.
Sure some chains are like clockwork. Sears (SHLD) tries to put real estate investment trust (REIT) lipstick on the pig that is that chain. Nobody's buying that. J.C. Penney (JCP) is still struggling to turn around. Wal-Mart's (WMT) stock is down 15% for the year and it looks like there's no respite even as that 2.7% yield looks tempting.
But Costco (COST) has put up consistently good numbers during this period and it's being beaten to death from $154 down to $138.
It's enough to say, hold it, crap shoot, look elsewhere. Unless you have a special situation, like a nascent turn at Target (TGT) being engineered by CEO Brian Cornell, (owned by my charitable trust, Action Alerts PLUS) or a long-term secular growth story like the drugstores, I totally get that you would want to flee the group. I say stick with something that's got an edge, or look elsewhere. Sometimes you have to own it: retail's just gotten too hard to profit from. What a shame.