Are there enough share donors left?
We know that this may be the best retail environment in decades, something Brian Cornell, Target's (TGT) CEO, pointed out this week, which was tweeted by President Trump. Thank heavens this time there were no scolds involved from what's become a grumpy president about CEOs.
One of the crucial aspects, though, for the quarter was continual share donation from big and small chains that seem to be on their last legs and the amount of sales left to take. Maybe, soon, not enough to make a difference.
For example, J.C. Penney (JCP) and Sears (SHLD) are two perennial share donors. I think Sears is pretty much a goner with everything being done by CEO Eddie Lampert to desperately save the company, and everything failing. Now he is resorting to trying to buy his own brands. What kind of ridiculous conflict is that?
No matter, he only has $15 billion dollars of sales left to give to other companies.
J.C. Penney, a once all great and powerful retailer, only has $12 billion left. Notably there are 574 Sephoras in Penney's. Now any sort of closings are most likely good for Bluemercury of Macy's (M) and Ulta (ULTA) . But it is still too early to make a difference.
Still these decisions matter. Kohl's (KSS) benefited from the collapse of Bon-Ton and its $2 billion in sales. Everyone benefited from the collapse of Toys R Us which had been doing about $11 billion in sales before it collapsed.
Judging by this last quarter you have to start wondering about the $8 billion in non-Bath & Body Works that L Brands (LB) serves up.
Now there are still plenty of bankruptcies that keep happening and of the majors only Kohl's hasn't closed any stores.
But I think we have to keep these collapses on our radar screen. When the donations stop, so could the earnings surprises.