by Traders Reserve | July 10, 2012 12:30 pm
Last week we received the news that the economy only created 80,000 net new jobs in June. This anemic employment growth is the latest disappointing data point in what has become a truly barren landscape of economic news. The stubbornly high unemployment rate, lack of substantive GDP growth and fear over Europe’s fiscal issues all have taken their toll on U.S. retailers.
The all-important same-store sales metric for June was truly disappointing. Sales for the 20 chains in the Thomson Reuters same-store sales index rose a paltry 0.1% year over year. By comparison, last June the index jumped 6.7% from the prior year.
Still, some retailers are bucking the trend. Not surprisingly, two of these are discount retailers that tend to thrive during tough economic times; each saw same-store June sales surge. Two high-end retailers also had a surge in same-store sales, which proves the notion that there’s no recession among the wealthy class.
Here are four retail stocks that could make you money during tough economic times.
Discount clothing/department store retailer T.J. Maxx, which is operated by parent TJX (NYSE:TJX), saw solid sales gains in June, with revenue for the five-week period that ended June 30 coming in at $2.3 billion, up 9% year over year. The retailer’s eclectic mix of discounted name-brand fashions definitely is appealing to shoppers in search of value, and hence the June sales surge.
Fellow discount designer-label seller Ross Stores (NASDAQ:ROST)reported some of the largest gains of any retailer in June, with same-store sales surging 7% in the month. That was well above estimates for a gain of just 4.6%.
Ross Stores said it sees Q2 earnings coming in at 77 or 78 cents a share, up 20% to 22% from the same period a year ago. Previously estimates called for EPS of between 72 and 75 cents a share.
Luxury retailer Saks (NYSE:SKS) didn’t see any slump in its same-store sales, as its well-heeled customer base came in and spent $274 million for the five weeks ended June 30. That figure represents a 6% boost in the metric year over year.
The company said it saw strong gains in cosmetics and fragrances, men’s private brand, tailored clothing and shoe departments for men and women. This gives literal meaning to the term “well-heeled.”
Luxury retailer Nordstrom (NYSE:JWN) reported an even bigger boost in same-store sales for June than Saks, with total sales coming in at $1.04 billion during the month, an 8.1% increase in same-store sales for the five-week period ended June 30.
The company also announced plans to add two new Nordstrom Rack outlet stores.
Nordstrom also has its sights set on the Big Apple, as it entered into an agreement with Extell Development Co. to open a seven-story department store. The new store won’t open until 2018, but in the meantime, investors can get their luxury fix simply by adding JWN to their portfolios.
Source URL: http://investorplace.com/2012/07/4-robust-retail-stocks-for-tough-times-tjx-rost-jwn-sks/
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