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3 Retail Stocks With Surprising Revivals

Year-to-date outperformance is a bit baffling for these retailers

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retail stocks jcp shld rsh splsYTD Return: 41%

Staples (SPLS) bounced around in 2012 on chatter that it would be taken private, but that has yet to happen. Instead, SPLS has been working to close stores and move away from the brick-and-mortar business model.

It might surprise you, but Staple is the second largest online retailer, behind only Amazon (AMZN).

Still, the shift resulted in over $1 billion in charges in just one quarter last year … which paved the way for a $160 million loss from continuing operations. Besides, online retailing for office supplies is extremely competitive, which kills margins. Just look at the most recent quarter for Staples, which featured a 4% year-over-year drop in revenue and a whopping 14% drop in net income.

On top of that, Staples just announced it will match prices from Amazon. Yeah — that should be really good for profit margins.

No wonder more cutbacks and downsizing are on the way. The Boston Globe recently reported that CEO Ron Sargent is reorganizing the SPLS management team, laying off workers and closing even more stores. The only reason for any kind of long-term optimism is that SPLS stock comes with a 12-cent dividend, yielding just under 3% and paying you for patience.

Bail out quickly if it gets cut.

Marc Bastow is an Assistant Editor at InvestorPlace. As of this writing, he was long AAPL.

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