The magic carpet ride where most retail promotions have been lately should probably have to go back to the reality that is planet Earth.
And very soon.
Shares of retail heavyweights such as Nordstrom, Macy’s, Kohl’s and Simon Property Group were settled on Tuesday. At first blush, the reason for several of the bilingual percentage sales is not so clear. Walmart blew it off this morning with its second-quarter release this morning. Consumers took their big, fat stimulus checks from Uncle Sam and splashed a bit over non-essential household items and maybe a few extra bags of frozen food.
Meanwhile, the home run of Home Depot on Tuesday morning was also not a slouch. Armed with rock-bottom interest rates (thank you, Federal Reserve boss Jerome Powell) and a ton of time on their hands, homebuilders are pushing Home Depot’s U.S. sales of the same store up 25%. A Home Depot spokesman told Yahoo Finance that the sales increase was the best since 2000.
All in all, at least on paper not a bad way to kick off the season of retailer revenue. But the feeling of good news stops right there, as both Kohl’s and Walmart published a dose of dark commentary on the current health of retail.
“There are literally thousands of stores that unfortunately have dire consequences and will be closed,” Gass analysts said, promising to go to that market segment.
Investors are not so sure that one – Kohl’s shares were rocked with 16% on the trading session.
Over at Walmart, executives warned that sales had weakened sharply after its impressive quarter when COVID-19 ran stimulus checks.
“Q2 sales began strongly, both in-store and online, particularly in general merchandise, aided by government incentive spending. Farmers’ sales had another strong quarter. As stimulus funds tapered off, sales began to normalize, but July comps grew even more than 4%, “Walmart said in a presentation detailing the latest revenue report. The company cited trends in its bread and butter U.S. company.
Walmart shares were somewhat in the red after jumping by about 6% in pre-market trading.
COCONUT CREEK, FL – JULY 17: A general view of people shopping at Walmart as U.S. companies implement mandatory masks that must be worn in their stores upon entry to control the spread of COVID-19, such as Florida’s Department of Health on Friday confirmed 11,000 new cases of COVID-19 in one day on July 17, 2020 in Coconut Creek, Florida. Credit: mpi04 / MediaPunch / IPX
Given this fresh round of glow – and more likely along the way as retailers report gains on reporting this month – one has to wonder if the onslaught in retail is as boiling as a piece of fried chicken.
The VanEck Vectors Retail ETF has been up 22% over the past three months amid solid data on retail sales, which now looks good in the rearview mirror unfortunately lacks another incentive plan for wrestling American households. The Consumer Discretionary Select Sector SPDR Fund has hit 27% in the past three months. Indeed, that increase also looks exaggerated, as consumer spending falls to the point of a cliff – no thanks to bumble politicians.
“Back to school [shopping] is an enormous question mark. And it takes up the question now that people paid their taxes three months later and maybe the extra unemployment insurance of $ 600 was done, pulling the customers back. That’s what investors are asking right now, ”said SW Retail Advisors founder Stacey Widlitz on Yahoo Finance’s The First Trade.
@BrianSozzi and to LinkedIn.“data-reactid =” 45 “>Brian Sozzi is an editor-in-chief and co-anchor of The First Trade by Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and to LinkedIn.
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