JCPenney, Dressbarn among retailers struggling to keep up with online shopping

Channel: Fox Business
Published: 8 hours ago

FOX Business’ Jackie DeAngelis, Phil Orlando, chief equity markets strategist at Federated Investors, and Belpointe chief market strategist David Nelson discuss the sell-off in retail and how U.S. stocks are beginning to recover amid trade war tensions. FOX Business Network (FBN) is a financia...

It is a rough day, though, however, for retailers same store, sales mis at home, depot kohl's, cutting air outlook, coupled with bad news from a few names that lets quite listen. This emitted, a lot of these shows, are already down 95 percent from all-time highs. I'M gon na bring exactly the angelus to help us break this all down jackie good afternoon to you, charles will retail, certainly importa ...
t when you're looking at the broader market, because it gives us a sense of consumer sentiment how people are spending and and how they feel About the economy, the earnings that came out today were not stellar, let's start with jc penney, because i think this is an important onemissing on the top and bottom line were a larger loss than expected. Those same store sales. They were down more than 5 %. The ceo of jc penney actually said that the tariffs imposed by president trump haven't had an impact on the company just yet, but they are concerned about that second potential round of tariffs on the other remaining 300 billion dollars of goods, and he said that it would Have a more meaningful impact so certainly something to watch for. On the cold side, another department store missing its earnings, lowering its outlook for the full year and the ceo they're saying the year started off slower than we'd like nordstrom's macy's. You can see that they'redown on the session as well in sympathy and the department stores, have a challenge here: they're trying to move locations they're trying to spiff up their displays to get consumers in the door, but that's really difficult to do when it's so easy to Shop online with competitors like amazon or you can go straight to the manufacturer and buy off their website. Sometimes the pricing is more competitive, and certainly you don't have to go to the store it's easier. More convenient for people home depot is another one that investors are focused on, the numbers were better, they beat the estimates, but they were down because same store. Sales grew at the slowest level that the company'sseen in three years. Finally, i'm just gon na end here with store closures, looking at dress barn, the parent company they're saying that it's going to close 650 dress barn stores and i actually looked up the entire amount of stores that were closed for last year, according to coresight research.

5860. For charles at this point in the year, were only in may already seven thousand announced closures, so you can see that brick-and-mortar stores and retailers are still struggling here. Yeah you're absolutely right, jackie in fact lucky to stay with us and i want to bring back, fill and and david. I told you feel if you're not careful, we're not gon na. Let you go so gentlemenlet's talk about this, because investors look at this and they wonder this brick-and-mortar story, how much of it it's actually a reflection of the overall strength of the the consumer out there. I think the consumer is in pretty good shape and, and you look at the, we just got a retail sales number the other day on april, disappointing on the surface, but the march number was revised higher and because of the changing calendar on eastern passover every year. You'Ve got to look at those two months in combined what i refer to as the may profes con retail sales retail sales were up about three and a half percent year-over-year. Those two months combined, i thinkwhat that does is it - tells us that the consumer has shrugged off the the difficult winter. The the government shut down the negative wealth effect in the fourth quarter and and we've eradicated the stench from the december and the february numbers that were poor. So i think the consumers in decent shape it feels like also wall street, starts to take things in consideration. Right now, home depot is up four bucks from where it opened right. The low of the sessions are in 186, it's already up a buck.

That to me is what i'm looking for how wall street reacts now to the other mains, because, let's face it, jcpenney is down like 98 percent fromits all-time high asn a you know. The parent company dress barn s down 99 percent from anti. They have been slaughtered, but a name like home depot seems to beginning to benefit it. It out, there'll be survivors for sure, but the you know big box to man there's just not enough of it out there. The source stores have to shrink. I walked into the mall and stanford recently and i noticed that williams-sonoma was gone. I was kind of shocked to see that the amazon effect is real, i'm not as encouraged right now, because amazon is only up fractionally on the day and then last quarter. Wasn'T that great, it wasn't wasn't horrible, but growth clearlyhad slowed this this. I i'd have a word of caution here for really poor for the consumer or for a little bit on the consumer. The fact that amazon slowed in the last quarter. That bothers me a lot. You know jackie, i was looking at comments from a home depot visa via the tariffs are saying that they've been manageable.

So far. Maybe a billion dollars in new tariffs would be another billion, but he also said that's just 1 % of sales and that they're doing things already like trying to move supply chains. You know we know that the industry sent the white house a letter. Yesterday, the foot at least the foot were makers, did andthey, don't want any parts of this, but do you see where they might start to make long-term changes anyway, with with respect to supply chain? Absolutely i mean they'll be forced to you know the president's been holding back after he raised the tariffs and china retaliated. He had that extra punch he's sort of saving that in his back pocket before he moves forward. But if this you know, the tensions continue to worsen here and a deal really can't be struck, say by the end of june, and the president decides he is gon na go after that remaining 300 billion dollars. You know companies like nike, for example, that manufactures so much in china. They are goingto, be forced to find other alternatives, and that's certainly going to change the business model altogether.

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