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Cramer: Macy's In Retail's 'Ugly' Category, Sears 'Horrifying'

Jayson Derrick

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. 

Related Links:

Macy's Receives Mixed Analyst Reaction After Q3 Earnings Beat, Sales Miss

Bed Bath & Beyond Rallies After Q3 Print, But Analysts Aren't Buying It

Photo by EEJCC/Wikimedia. 

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