The retail sector continues to gyrate wildly with every passing day, as the market attempts to get to the truth -- whether it was a good or bad holiday season in 2019, and who in the sector still has legs, and for how long?
Lest you think that the retail roller coaster is over, Wednesday morning Target (TGT) reported a same-store sales increase of 1.4% for the two-month holiday period, but that was below expectations (and last year's 5.7%), and shares are down in early Wednesday trading. For the quarter, TGT expects same store sales to be 1.4%, below previous estimates.
Just days after disappointing holiday sales reports from major retailers sent several in that sector lower in a sympathy move, Tuesday we saw some green shoots among smaller names. Last Thursday, Kohl's (KSS) reported a 0.2% year/year drop in the two-month holiday shopping period, the first such decline since 2016. That sent KSS shares down 6.5% for the day, but others joined in the pity party as well. Among them were Fossil Group (FOSL) (-6%), Gap (GPS) (-4%), Abercrombie & Fitch (ANF) (-4%), and Express (EXPR) (-4%).
The same day, J.C. Penney (JCP) , which has seemingly been in a death spiral for several years, reported that its same store sales fell 7.5% (5.3% excluding major appliances and furniture, businesses JCP exited). JCP shares fell 11% that day, have since given back another 25%, and closed yesterday at $.80.
Tuesday also saw small specialty retailer Big 5 Sporting Goods (BGFV) pop 31% on news that fourth-quarter earnings will be well ahead of expectations. The company expects to report earnings of between 2 cents and 4 cents, well ahead of prior guidance of a loss of between 4 cents and 16 cents. Specialty name FOSL rose 9%, gaining back all it lost last Thursday and more, on no news. On the downside, GameStop (GME) got clobbered, falling 13% after reporting a 24.7% same store sales decline.
The retail roller coaster continues its turns and slopes, and there is still money to be made, and lost, here.