Retail stocks traded mostly lower
Thursday in reaction to disappointing November and December sales data from Macy's Inc (NYSE: M).
Macy's Problem
Data continues to support a "strong" consumer, including numbers from credit card providers that show 10-percent online sales
growth for the retail sector during the holiday season, Strategic Wealth
Partners' Mark Tepper said during a CNBC "Trading
Nation" segment. Overall, retail sales grew by 5 percent, which makes it apparent that Macy's has problems that are likely
company-specific, he said.
Macy's is simply "not a good company," Tepper said, terming it a "dinosaur" department store that failed to evolve over the
years. The company suffers from a lack of any pricing power, as shoppers walk into stores "expecting massive discounts,"
obliterating margins, Tepper said.
Macy's shares were trading down 1.07 percent at $25.83 at the time of publication Friday.
Cramer: Adapt Or Suffer
After the Macy's earnings report, CNBC's Jim Cramer
said during his daily "Mad Money" show that every retailer needs to "adapt to this new environment" or "suffer the
consequences." Macy's failure to adapt puts it in the "ugly" section of retail, Cramer said — as opposed to "horrifying"
category which includes names like Sears Holdings Corp (OTC: SHLDQ) and J C Penney Company Inc (NYSE: JCP).
A Deserved Punishment?
Macy's stock deserves the "punishment" it saw Thursday, but the overall sell-off in other retail names is unjustified, Pro4ma
founder and CEO Liz Dunn told CNBC during
Thursday's "Power Lunch" segment. Rival retailers like Target Corporation (NYSE: TGT) and Kohl's Corporation (NYSE: KSS) performed against "lofty" expectations, she said.
The consumer remains in "good shape," Dunn said, adding that the retail sector is diverging into winners and losers.
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