Not every retailer is rolling over. We are starting to see some retailers that can compete, that can win, in this new environment.
Which ones are winners so far? First, there's TJX (TJX) , which actually beat and raised numbers because of increased traffic with its HomeGoods division putting up an astonishing 7% comparable-sales number. This company, with a stock that is well known to Action Alerts PLUS club members, put on a clinic about what you can do to beat Amazon (AMZN) : experiential opportunities, treasure-hunt environment and lower prices for branded goods than the online colossus can offer. TJX may be the only retailer that wants to grow its store base dramatically to meet the demand it sees, especially from younger shoppers who are strapped and don't want to spend a lot of money on these basics. (TJX is part of TheStreet's Action Alerts PLUS portfolio.)
As CEO Ernie Herrman told us in his triumphant conference call: "The customer is clearly telling us that brick-and-mortar retail continues to be an essential part of the shopping experience, and certainly when it is executed right with the right values." He went on to say, "All of this give us confidence in our long-term global store growth potential," which is why they intend to open 260 stores this year along and ultimately 5,600 stores, including new formats, which would be 1,700 more stores than they have today.
TJX quite simply doesn't need help in defeating Amazon even if it is offered by a presidential tweet like Trump's this morning, saying that Amazon -- which is run by Jeff Bezos, owner of the Washington Post, which has been highly critical of the president -- "is doing a great damage to tax-paying retailers. Towns, cities and states throughout the U.S. are being hurt -- many jobs being lost."
It's funny, that's pretty much what the taxpaying Walmart (WMT) did to all of the mom-and-pop retailers in this country as it rolled out its everyday-low-price model that couldn't be beaten. Walmart reports tomorrow and I think it will be good. I do not know what Trump can do about Amazon given that it, like Walmart, has lowered prices for 317 million Americans. It would be highly unusual for the Justice Department to bring a case against any company that saves voters billions of dollars each year.
Who else is doing better?
I was impressed with Urban Outfitters (URBN) , which managed to put up sequentially better and better comparable-store-sales numbers for its flagship namesake division as well as Anthropologie. Urban is a fashion player. The right fashion wins.
Finally, there is Target (TGT) , where CEO Brian Cornell gave you an amazing 32% growth in digital -- the best I have seen so far -- and fantastic numbers in apparel driven by the amazingly successful Cat & Jack product line of kids' clothes that did $2 billion in sales, much more than I had expected.
I was also impressed with the new small-format stores, the movement into college campuses -- so needed -- as well as the electronics section that had been so disappointing. The incredibly loved Nintendo Switch game as well as the Apple Watch and the tablet all contributed to a massive turn in those aisles. Food and drugs were no longer a drag.
It is true that Cornell had lowered expectations at the beginning of the year, and he trumped them. I never mind when execs practice UPOD -- or under-promising and over-delivering. I urged the Philadelphia Eagles to do the same when I broke the huddle recently at practice.
If you recall, I didn't think Home Depot was worthy of the criticism or the four-point decline in its clean beat and raise. That was the specter of Amazon keeping that stock down and giving it a haircut on valuation.
However, I recognize that it's in the doghouse.
My take? TJX barely moved on its excellent quarter when it reported, which makes it a screaming buy. Urban moved a great deal but it has room to run. And Target, with a 4.4% yield, works for me, too, at least for now.