Retail Stocks Bounce After Earnings Selloff
By Dean Seal
Retail stocks are unexpectedly rebounding after a punishing
earnings season selloff that aroused concerns about the state of
the consumer and the longevity of ongoing supply chain
The SPDR S&P Retail exchange-traded fund, which tracks an
equal-weighted index of stocks in the retail industry, rose 6.7% on
Wednesday, a bump up from a 30% decline since the start of the
Department stores and big-box chains have been reporting drops
in first-quarter sales as consumers, who can't fall back on
government stimulus like last year, tighten their belts in response
to historic inflation.
Even retail giants, including Walmart Inc. and Target Corp.,
that posted higher first-quarter sales have been caught up in the
wider selloff. After Target missed Wall Street earnings estimates a
week ago, its shares dropped 26% to a 52-week low in the first half
hour of trading and continued to slide.
But Target shares advanced 4.3% to $156.51 on Wednesday as part
of the larger lift across the retail industry that managed to miss
shares of Walmart, which ticked down.
Apparel companies are seeing some of the biggest gains of the
pack. Shares of Abercrombie & Fitch Co., after tumbling 31% to
open at a 52-week low of $18.31 the day before, climbed 16.7% to
$22.29 on Wednesday. Abercombie's Tuesday decline dragged shares of
rival American Eagle Outfitters Inc. down as well, but American
Eagle soared back up 12% to $13.57 on Wednesday.
After Express Inc. bucked industry trends and raised its annual
sales forecast on Wednesday, its shares fell to a 52-week low of
$2.30 in early trading before regaining 11.3% to hit $2.65. Shares
of Gap Inc., which are down 40% this year, increased 11.8% to
$10.60. Shares of Urban Outfitters Inc., which sank 8% to $17.99 on
Tuesday after missing Wall Street earnings expectations, rose 14.6%
to $20.63 Wednesday.
Department stores are big winners in the retail bounce as well.
Dillard's Inc. shares are up for the year after climbing 12.6% to
$265.45 on Wednesday, as are shares of Nordstrom Inc. after a 13.1%
gain to $23.39. Shares of Kohl's Corp. rallied 12.8% to $40.79 on
grumblings of refreshed buyout bids. Shares of Big Lots Inc., down
34% this year, rose 13.9% to $29.87.
Among electronics stores, shares of GameStop Corp. jumped 25.4%
to $111.70 on heavier-than-usual volume for the frequently volatile
stock. Shares of Best Buy Co., down 23% this year, rose 8.6% to
Other big gainers included Dick's Sporting Goods Inc. shares,
which rose 9.5% to $78.01 after the company said sales declined in
the first quarter and that it would cut its annual earnings
outlook. Shares of Bath & Body Works Inc. increased 9.2% to
Write to Dean Seal at firstname.lastname@example.org
(END) Dow Jones Newswires
May 25, 2022 15:23 ET (19:23 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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