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7 Retail Stocks That Are Getting Reamed

Retailers are struggling almost across the board, but these have been hit the hardest

By Anthony Mirhaydari, InvestorPlace Market Strategist

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Source: Mike Mozart via Flickr

U.S. equities are continuing their relentless upward climb on Monday, extending the S&P 500’s streak without so much as a 3% pullback, to levels not seen since the mid-1990s. This is a historic demonstration of quiet, volatility-free buying. Geopolitical tensions are being ignored. Federal Reserve policy tightening is shrugged off. And even the rollout of third-quarter earnings isn’t resulting in much directional action, especially for retail stocks.

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But while the broad market averages are holding to the pattern, there is action in the individual sectors. Retail stocks, in particular, are under intense pressure at the moment, battered by intensifying e-commerce competition between Amazon.com, Inc. (NASDAQ:AMZN) and Wal-Mart Stores Inc (NYSE:WMT) as well as relatively tepid U.S. consumer spending as measured by the personal consumption expenditures metric.

As a result, the SPDR S&P Retail (ETF) (NYSEARCA:XRT) is down roughly 6% from its recent high, taking out its 50-day moving average in the process. Here are seven sector stocks feeling the heat:

Retailer Stocks Getting Reamed: Dick’s Sporting Goods (DKS)

Dick’s Sporting Goods Inc (NYSE:DKS) shares have collapsed all the way back to levels not seen since 2010, down more than 60% from their high late last year, as the company has been battered by online competitors and recent word Amazon is looking at selling sportswear. Shares of suppliers like Nike Inc (NYSE:NKE) have been hit by waning demand as well.

The company will next report results on Nov. 14 before the bell. Analysts are looking for earnings of 27 cents per share on revenues of $1.9 billion. When the company last reported on Aug. 15, earnings of 96 cents missed estimates by four cents despite a 9.6% rise in revenues.

Retail Stocks Getting Reamed: Sears (SHLD)

Retailer Stocks Getting Reamed: Sears (SHLD)

Sears Holdings Corp (NASDAQ:SHLD) shares are on the slide again on Monday, testing critical support at the $6-a-share level down 40% from its July high, after the company’s largest outside shareholder announced he will exit the board. The company seems to be on perennial bankruptcy watch, with reports that vendors are tightening terms over fears of nonpayment while Reuters reported back in August some stores were having problems stocking their shelves.

The company will next report results on Dec. 7 before the bell. Analysts are looking for a loss of $3.23 per share on revenues of $4 billion. When the company last reported on Aug. 24, a loss of $1.16 per share beat estimates of $2.48. It also faced a 22.9% decline in revenues year-over-year.

Retail Stocks Getting Reamed: Chicos (CHS)

Retailer Stocks Getting Reamed: Chicos (CHS)

Chico’s FAS, Inc. (NYSE:CHS) shares have fallen back to levels not seen since 2009, a decline of nearly 60% from highs seen late last year. The company was hit with a downgrade this morning from Citigroup analysts and was downgraded last week by Bank of America Merrill Lynch analysts as the headwinds against specialty retailers grow more ferocious.

The company will next report results on Nov. 22 before the bell. Analysts are looking for earnings of 14 cents per share on revenues of $538 million. When the company last reported on Aug. 30, earnings of 18 cents per share missed estimates by 3 cents on a 9% decline in revenues.

Retail Stocks Getting Reamed: Express (EXPR)

Express Inc. (NYSE:EXPR) shares have dropped out of a three-month consolidation range to return to levels last seen in August. In late September, analysts at FBR met with management to discuss restructuring efforts and efforts to increase online penetration. But headwinds, including lukewarm mall traffic and heavy promotional activity among competitors, will limit upside in the near term.

The company will next report results on Nov. 30 before the bell. Analysts are looking for earnings of eight cents per share on revenues of $487 million. When the company last reported on Aug. 23, earnings of 1 cent per share beat estimates by 2 cents on a 5.2% decline in revenues.

Retail Stocks Getting Reamed: Ulta Beauty (ULTA)

Retailer Stocks Getting Reamed: Ulta Beauty (ULTA)

Ulta Beauty Inc (NASDAQ:ULTA) shares are down nearly 60% from their early June highs, returning to early 2016 levels in what is the most serious pullback for the stock since the late 2013/early 2014 unpleasantness. The selling pressure intensified after Goldman analysts removed the stock from their conviction buy list; a move that followed a downgrade by Cleveland Research analysts last week.

The company will next report results on Nov. 30 after the close. Analysts are looking for earnings of $1.67 per share on revenues of $1.34 billion. When the company last reported on Aug. 24, earnings of $1.83 per share beat estimates by five cents on a 20.7% rise in revenues.

Retail Stocks Getting Reamed: TJX (TJX)

Retailer Stocks Getting Reamed: TJX (TJX)

Shares of off-price retailer TJX Companies Inc (NYSE:TJX) are dropping out of a four-month consolidation range capping a two-year-long sideways slide after hitting a high of $82.36 in the summer of 2015. Many analysts are still optimistic, with an initiation at buy from Bernstein last month and an upgrade by Northcoast analysts shortly before.

Back in August, RBC Capital Markets analysts sounded an alarm and downgraded the stock on concerns over the sustainability of market share gains on comments from vendors (often, full-price retailers) that they are looking to lower their sales to off-brand channels.

The company will next report results on Nov. 14 before the bell. Analysts are looking for earnings of $1 per share on revenues of $8.9 billion. When the company last reported on Aug. 15, earnings of 85 cents per share beat estimates by a penny on a 6% rise in revenues.

Retail Stocks Getting Reamed: Gap (GPS)

Retailer Stocks Getting Reamed: Gap (GPS)

Gap Inc (NYSE:GPS) shares are down more than 9% from their recent high — partially reversing the impressive 30% gain off of the mid-August low — after negative guidance by competitor J. Jill Inc (NYSE:JILL) generated some intense profit taking. The company is in the midst of a shift, looking to bolster the store footprint of well-performing Old Navy and Athleta brands and closing underperforming (and higher-priced) Gap and Banana Republic stores.

The company will next report results on Nov. 16 after the close. Analysts are looking for earnings of 55 cents per share on revenues of $3.8 billion. When the company last reported on Aug. 17, earnings of 58 cents per share beat estimates by five cents on a 1.4% decline in revenues.

Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2017/10/retailer-stocks-dks-shld-chs-expr-ulta-tjx-gps/.

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