KSS - Kohl's Corporation
| Previous Close | 49.02 |
| Open | 48.71 |
| Bid | 48.96 x 1100 |
| Ask | 48.97 x 800 |
| Day's Range | 48.22 - 49.24 |
| 52 Week Range | 43.33 - 83.28 |
| Volume | 1,527,774 |
| Avg. Volume | 4,219,003 |
| Market Cap | 7.792B |
| Beta (3Y Monthly) | 1.12 |
| PE Ratio (TTM) | 10.81 |
| EPS (TTM) | 4.53 |
| Earnings Date | Nov 19, 2019 |
| Forward Dividend & Yield | 2.68 (5.47%) |
| Ex-Dividend Date | 2019-09-10 |
| 1y Target Est | 55.71 |
- TipRanks
Goldman Sachs: 5 Strong Value Stocks To Buy Now
October is set to be a particularly volatile month for the market. That’s because this is a critical period for many investors and companies that manage performance to calendar year-end. So how can you best take advantage of the current investing climate? One option is to turn to value stocks. Luckily Goldman Sachs has released a report revealing its top value stocks right now. According to the firm, these are stocks that "have the potential for continued asymmetric upside.""While fundamentals will also determine the long-term trajectory of stocks, we use signals from options and credit markets to identify 20 value stocks from among those where our analysts' estimates show strong value scores," the firm’s Vishal Vivek told clients recently. These are stocks that sold off over the last year, but are now showing strong rebound potential.Here we ran the 20 stocks recommended by the firm through our database to find the 5 stocks on the list with the most Street support. Indeed, as you will see below, all five stocks covered below show a ‘Strong Buy’ or ‘Moderate Buy’ consensus from Wall Street. This is based on all the ratings received by each stock over the last three months- and means analysts believe now is a compelling time to buy into these names. Let’s take a closer look: 1\. Marathon Petroleum Based in Ohio, Marathon Petroleum (MPC – Get Report) is a leading downstream energy company. The company operates the US’s largest refining system 3 million + barrels per day of crude oil capacity across 16 refineries. Five out of six analysts covering Marathon are bullish on the stock’s outlook. And the average analyst price target works out at $68 (23% upside potential). Encouragingly, MPC’s 2Q19 results came in strong across the board. Plus synergies from its Andeavor acquisition are starting to come through more rapidly. Achieving a $1.4 billion synergy target would be a major catalyst says RBC Capital’s Brad Heffern. He is also a fan of Marathon’s retail business, Speedway. This “is the most attractive retail franchise in our coverage universe, and the extension of the Speedway model to the acquired ANDV stores could provide meaningful upside” stated the analyst. Even though the stock is trading down 7% year-to-date, shares have rallied 12% since the start of September. 2\. Morgan Stanley All four analysts covering Morgan Stanley (MS – Get Report) rate the stock a buy right now. On average these analysts see shares climbing 37% from current levels. Most tellingly, Citigroup’s Keith Horowitz recently upgraded MS from Hold to Buy while boosting his price target from $48 to $52. He advised investors to use weakness as an opportunity to increase exposure to a high-quality franchise with limited rates exposure.“We see Morgan Stanley net income growth of 2-3% over the next two years by continuing to gain market share in both its institutional and retail franchises, which compares more favorably against the flat to slightly declining net income growth among the rest of the bank universe” the analyst told investors. Shares are down 12% on a one-year basis, but have climbed 10% year-to-date. 3\. Kohl’s Corp Although this department store retail chain scores a Moderate Buy rather than Strong Buy consensus, Kohl's (KSS – Get Report) still has its fair share of supporters. For instance, five-star Guggenheim analyst Robert Drbul has just reiterated his KSS buy rating. After hosting a lunch with Kohl's CEO Michelle Gass and VP Mark Rupe, Drbul wrote “In an increasingly dynamic retail environment, we believe KSS remains a strong operator, led by a talented team with a clear strategy.”Despite a poor second quarter (as reflected by stock performance) Drbul notes an improvement in seasonal goods and traffic during August. “As we think about the remainder of '19, we reiterate our BUY rating as we believe management has the playbook to drive positive comps in 2H19 given the multitude of initiatives planned (led by the expanded Amazon partnership)” he writes. Kohl’s now accepts returns from Amazon (AMZN) customers at all of its more than 1,150 Kohl's stores nationwide. 4\. Valero Energy Among the large cap refiners, Valero (VLO – Get Report) remains the one (essentially) pure play refining company, with modest exposure to ethanol and renewable diesel. Like other stocks covered here, VLO is trading down 25% over the last one year- but up 10% year-to-date. What’s more all five analysts polled on VLO rate the stock a buy right now. With a $98 average analyst price target, analysts are anticipating upside of 18% from current levels.“The primary positive that we see with VLO is that it has the highest exposure to the Texas Gulf Coast, which could benefit from widening crude differentials” explains JP Morgan’s Phil Gresh. He believes VLO should have its choice of light and heavy crude on the Gulf Coast, with a unique angle on its Texas exposure. 5\. Conagra Brands Packaged food giant Conagra Brands (CAG – Get Report) may be down 20% on a one-year basis, but the stock has bounded back from its lows. Year-to-date shares have rebounded an impressive 39%. Out of all six analysts covering the stock, four rate CAG a buy right now. That gives the stock a ‘Strong Buy’ consensus. Meanwhile the average analyst price target stands at $32 (9% upside potential). JP Morgan’s Kenneth Goldman has just boosted his price target from $31 to $33. “We believe that CAG has many levers to pull in terms of innovation and synergies” he explains. Visit TipRanks Analysts’ Top Stocks page, to find the latest stock picks from the Street's best-performers.
- TheStreet.com
This 5.5% Yielding Dividend Stock Is Way Too Cheap
Income investors are far better compensated in dividend stocks like this, as the S&P; 500 Index on average yields less than 2%.
- Zacks
Kohl's (KSS) Up 6.4% Since Last Earnings Report: Can It Continue?
Kohl's (KSS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
- Zacks
Kohl's (KSS) Stock Down on Weak Comps & Escalated SG&A Costs
Kohl's (KSS) comps down for two straight quarters now. Additionally, rising SG&A expenses are a concern.
- American City Business Journals
Kohl's seeks 90,000 seasonal employees for holidays
The retailer plans to host its first national hiring event as part of its efforts to prepare for the holiday shopping season.
- InvestorPlace
Wait for More Clarity on Macy’s Stock
It has been a rough few years for mall retail stalwart Macy's (NYSE:M) and M stock. Once the center of the American retail landscape by virtue of being at the center of every mall in America, Macy's has since become increasingly less relevant in the American retail landscape it used to dominate.Source: Shutterstock You can thank e-commerce for that. Long story short, e-commerce disrupted the traditional retail world, Macy's failed to adapt quickly enough, and is now left with a bunch of stores that aren't as busy as they used to be, and an e-commerce business that isn't as big as it should be. * 7 Momentum Stocks to Buy On the Dip The numbers speak for themselves. Over the past five years, Macy's revenues have dropped 10%, Macy's operating profits have dropped 50%, and Macy's stock has dropped 70%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWill the slide ever end? Maybe. There is a potential path forward here wherein Macy's sales and margin stabilize, leading to a breakout rally in M stock. But, this path lacks visibility at the current moment. Instead, the most likely path forward here is continued weakness in the numbers and in shares.The implication? Don't count out Macy's stock yet, but don't count it in, either. Instead, monitor the stock from the sidelines, and see how things progress over the next few quarters. Macy's Stock Could Breakout HigherThere is a potential pathway wherein Macy's stock soars from current levels, and that pathway was outlined in an investor presentation management gave at the Goldman Sachs Annual Global Retail Conference in early September.The strategy is simple. Use technology to optimize the supply chain, and lower logistics expenses. Leverage data to reduce promotional activity, and grow gross margins. Refresh stores to be more tech-savvy and less labor-dependent, thereby reducing labor expenses and stabilizing sales. Increase usage of private label brands, so as to create a differentiated product value prop which also helps stabilize sales trends.To be sure, doing all of that is a tall order. But it's doable. And, if management does manage to do all of that, Macy's stock could explode higher from here.Here are the numbers: Net revenues are around $25 billion and dropping. Best case scenario, better product SKUs, a more attractive store presentation, and heavier usage of private label brands drives sales stabilization over the next several years. At the same time, gross margins -- which are at 39% and dropping -- improve as promotional activity becomes smarter and less prevalent, and the supply chain becomes more efficient. Labor expense reduction pulls out unnecessary SG&A dollars, and the opex rate somewhat stabilizes around 36%.Fast forward to 2025. Macy's could be looking at $25 billion in revenues, with 39% gross margins and a 36% opex rate. Ultimately, that makes right around $3 in EPS seem doable by then. Even if you throw just a conservative 10-times forward multiple on that $3 EPS estimate, that implies a 2024 price target for M stock of $30 -- almost double today's price tag. Secular Challenges Remain for M StockThe problem with the bull thesis on Macy's stock today is that secular challenges cloud visibility towards a $30 price tag for M stock.What are those secular challenges? First and foremost, it appears the retail world has moved on from Macy's. Right now, the consumer environment is as healthy as possible -- low unemployment, big wage gains, low rates, good credit, etc. Yet, Macy's reported comparable sales growth of just 0.3% last quarter. That's awful considering the backdrop, and it is broadly indicative of the fact that while consumers are spending money, they aren't spending money at Macy's.Second, Macy's is in a tough position where it may be tough to become relevant again. Other retailers have clear and differentiated value props. Nordstrom (NYSE:JWN), for example, is the premium fashion mall retailer. Kohl's (NYSE:KSS), meanwhile, has off-price, off-mall appeal. Best Buy (NYSE:BBY) gives customers quasi-necessary, in-store advice on the latest tech gadgets.What is Macy's differentiated value prop? Tough to say. They are somewhat stuck in the middle ground between premium fashion and off price, and don't really offer customers all that much that is unique to Macy's. Until they do, it could be tough for Macy's to improve traffic trends.Third, management is all about reducing promotional activity. That's a smart move. But, right now, it looks like promotions are the only thing driving traffic into Macy's stores. Thus, reduced promotional activity could have a materially negative impact on sales, which could result in continued profit erosion despite margin improvement.Big picture: there are still big secular challenges here, none of which have been have been fixed, yet. Until they do get fixed, it is probably best to avoid M stock. Bottom Line on M StockThe retail environment has changed dramatically over the past several years, as customers and sales have migrated in bulk into the digital channel. Some traditional retailers will survive this migration. Some traditional retailers will not.Right now, Macy's is having a tough time convincing investors that it will wind up in the first group. Until they do, it's probably best to avoid M stock despite its home run potential in the long run.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post Wait for More Clarity on Macy's Stock appeared first on InvestorPlace.
- Zacks
Keurig Adds Coffee-Maker Line, New Facility to Create Jobs
Keurig (KDP) opens production and supply-chain facility in Allentown, PA, which should add 400 jobs. Further, it expands the coffee-maker line, with the launch of the K-Duo portfolio.
- Business Wire
Kohl’s Donates $1.5 Million to Milwaukee Art Museum
Kohl’s (KSS) today announced a donation of $1.5 million over three years to the Milwaukee Art Museum. The financial support allows the Museum to continue the family-friendly Kohl’s Art Generation program, an interactive art experience in the community that encourages youth and family engagement in art. “Kohl’s is happy to continue partnering with the Milwaukee Art Museum to create great experiences for families,” said Jen Johnson, Kohl’s senior vice president of corporate communications.
- Business Wire
Kohl’s Cares, Charlie Brown! Holiday Collection Features Families’ Favorite Peanuts Characters
This holiday season, Kohl’s (KSS) is giving customers more ways to give back with books, plush and games featuring family-favorite Peanuts characters. Each item in the collection gives families fun ways to connect with each other and their favorite characters, with 100 percent of Kohl’s net profit benefiting organizations that improve the health and wellness of children and families nationwide. Priced at just $5 each, the Kohl’s Cares Peanuts collection is available now for a limited time while supplies last at all Kohl’s stores nationwide and on Kohls.com.
- InvestorPlace
Buy Nordstrom Stock, But Not Because of Its Low Valuation
Nordstrom (NYSE:JWN) stock has suddenly moved into rebound mode. After hitting a multi-year low of around $25 per share, the stock has surged over the last few weeks, taking Nordstrom stock to almost $35 per share.Source: Jonathan Weiss / Shutterstock.com JWN remains far away from delivering impressive profit growth, and its low multiple may not persuade investors to buy after the recent run-up. Still, it has become a lucrative choice for an unexpected group -- dividend investors. Nordstrom's Amazing TurnaroundNordstrom stock has seen an impressive run since it announced an earnings beat on Aug. 21. The report began a rally that has taken JWN stock higher by about 40% in less than a month. Positive developments on trade talks with China have further fueled the rally.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Big IPO Stocks From 2019 to Watch Yes, amid the Amazon (NASDAQ:AMZN) threat, JWN and peers such as JCPenney (NYSE:JCP), Kohl's (NYSE:KSS) and Macy's (NYSE:M) have faced challenges over the last few years. As late as 2015, Nordstrom stock traded at over $83 per share. However, fears of Amazon and factors such as the trade war have helped send JWN to recent lows of around $25 per share.While the competition spelled bankruptcy for Sears (OTCMKTS:SHLDQ) and could for JCPenney, Nordstrom has found a way to remain relevant in a retail environment increasingly moving online. As a result, we now see a turnaround in Nordstrom stock.Even with the huge run-up, the forward price-to-earnings ratio stands at about 10.4. That does not seem expensive. Also, it has maintained an average P/E ratio of around 18.7 over the previous five years and such multiples usually signal a strong long-term buy. Dividends Have Become the Draw for JWNStill, looking at profits, one has to wonder if Nordstrom stock will face more permanent multiple compression. Analysts predict profits will shrink by 8.6% this year. For next year, Wall Street forecasts an increase of only 3.3%. It also predicts long-term earnings increases of 3.68% per year over the next five years. Given the slow pace of profit growth, the low P/E ratio alone would not persuade me to buy Nordstrom stock.However, I see a reason for dividend investors to buy stock in JWN. The silver lining in the long-time decline in JWN stock is the rising dividend yield. As late as 2014, JWN investors earned 1.22% in dividends. At that time, investors received $1.32 per share. The annual payout now stands at $1.48 per share and has remained at that level since 2016.Still, despite a modest increase, the yield has now risen to just over 4.3%. And it remains there despite the massive increase in the stock over the last month.To be sure, this payout presents somewhat of a burden. With a dividend payout ratio of 49.33%, the payout claims nearly half of the company's profits. Still, with growth returning, the company has no reason to put the stock at risk by cutting the dividend. Moreover, even with only 3%-plus profit growth, the payout ratio will fall over time. Final Thoughts on Nordstrom StockNordstrom stock should continue to rise over time, but not for a reason many would expect. Yes, the forward P/E of 10.4 looks cheap, both by S&P 500 and even by JWN standards. However, with profit growth expected to remain in the low-single-digits for years into the future, the P/E may not return to long-term averages of around 18.7.Still, the long-term decline in Nordstrom stock has led to an unexpected result -- a high dividend yield. JWN has become a well-suited vehicle for producing a cash return exceeding both the S&P 500 and most any bank deposit. Moreover, with a P/E ratio that remains low, they should receive the added benefit of a rising stock price.For retail investors wanting both growth and income, JWN stock may have just become the equity of choice.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Buy Nordstrom Stock, But Not Because of Its Low Valuation appeared first on InvestorPlace.
- TipRanks
Goldman Sachs: 3 High-Yield Dividend Stocks to Buy Now
According to Goldman Sachs, the time is now ripe for dividend investing. The firm’s chief US equity strategist, David Kostin, writes: “With the 10-year Treasury yield at just 1.5% and the Fed likely to cut two more times this year, investors should look for opportunities in dividend stocks.” Similarly, in a recent interview with CNBC, Mark Tepper, president and CEO of Strategic Wealth Partners, commented: “As an investor, it’s important to understand that the 30-year yield is pretty much in line with the dividend yield on the S&P 500 right now. So, which would you rather own over the next 10 years?... You’re getting the same yield with a growth component if you invest in stocks.”For investors looking to pick up some top dividend names, Goldman Sachs screened for stocks with both strong dividend growth and high dividend yields, based on dividend estimates and payout ratios. We used TipRanks to pinpoint three of the most promising stocks on Goldman Sachs’ dividend growth list. As you will see all three of the stocks covered below have a buy consensus from the Street, based on the last three months of ratings: 1\. AT&T (T)Telecom giant AT&T is one of the highest yielding dividend stocks singled out by Goldman Sachs. Currently investors receive a lucrative 5.63% yield, which translates to an annualized payout of $2.04 (paid quarterly). For comparison’s sake, the average tech stock manages a dividend yield of just 0.96%. And you can add to the picture extremely compelling dividend growth of 34 consecutive years. That makes T one of the elite Dividend Aristocrats, S&P 500 companies with over 25 years of straight dividend growth. Such a strong dividend outlook also provides foundation for the company’s share price, which has been on a roll recently. Year-to-date, T has now surged 27% to $36.25. That’s reflected in the fact that the stock’s average analyst price target now falls below the current share price. However, T maintains its Strong Buy analyst consensus. Plus five-star Cowen & Co analyst Colby Synesael has just reiterated his T buy rating with a price target of $40 (10% upside potential). According to the analyst, shares can continue to grind higher over the coming months. He points out that T is still executing against its 2019 guidance, while potential asset sales (i.e. from the Latin American and tower portfolios) could reduce risk and help pay down debt. Meanwhile Tigress Financial’s Ivan Feinseth has a Strong Buy rating on T, explaining: “We reiterate our Buy rating on AT&T as positive Business Performance trends continue to accelerate driven by the ramp-up of its high-speed 5G network, and the continued leverage of its WarnerMedia acquisition… We believe significant upside exists from current levels and continue to recommend purchase.” Overall, six out of eight analysts covering the stock rate AT&T a buy right now. 2\. Kohl’s Corp (KSS)With over 1,100 stores across the US, and annual sales of around $19 billion, KSS is one of the US’s largest retail chains. Although share prices have struggled recently, investors still enjoy an annualized payout of $2.68 (paid quarterly). That’s thanks to eight consecutive years of dividend growth pushing the yield to 5.52% vs the 2.07% services sector average. In the stock’s favor comes a recent tie up with a major rival- e-commerce giant Amazon (AMZN). On July 8 Kohl’s announced that it now accepts Amazon returns after a successful pilot program. KSS will pack, label and ship the returns for free, but hopes the initiative will “drive customers into our stores, and we are expecting millions to benefit from this service.”“It’s an interesting marriage because what Kohl’s needs is store traffic, and what Amazon needs is to make customers happier with a place to return their items,” Cowen & Co analyst Oliver Chen commented. “The dream is that it’s a fair but attractive split where that shopper will come in and purchase other items.” He recently reiterated his buy rating on the stock with a $58 price target (19% upside potential).Writing more recently, Guggenheim’s Robert Drbul reiterated his buy rating following Kohl’s Q2 results. Despite a choppy retail environment, the analyst notes that 1) management has the playbook to drive positive comps in 2H19; and 2) KSS remains best in class at expense management. Plus the analyst adds: “the company remains committed to returning cash to shareholders… and has improved its balance sheet over the past 12-18 months. We continue to view the management team and strategy in place at KSS favorably.” Given the ongoing highly competitive retail environment, Drbul does lower his KSS price target from $70 to $60. However, from current levels that still indicates upside potential of 24%. Overall, the stock reveals a cautiously optimistic Moderate Buy consensus. It has scored 6 recent buy ratings (including from Goldman Sachs’ Alexandra Walvis\- who has a $56 price target on the stock), alongside 4 hold ratings and 1 sell rating. 3\. Valero (VLO)Last but not least, Goldman Sachs draws our attention to Valero- the world's largest independent petroleum refiner and a leading ethanol producer. From a dividend perspective, VLO offers a high yield of 4.61% with eight years of dividend growth, easily beating the sector’s average yield of 2.54%. Moreover, the annualized payout currently stands at $3.60 (paid quarterly). Indeed, VLO has a very strong program to return capital to shareholders, with $11+ billion returned in 2015–18.And we can see that the stock boasts only buy ratings from the Street right now. In the last three months, six analysts have published buy ratings on the stock with an average price target of just under $100. For instance, Goldman Sachs’ Neil Mehta upgraded VLO from Hold to Buy three months ago. Citing the stock’s recent underperformance, the analyst also told investors “we expect the company to benefit from increased flows of crude to the US Gulf Coast where much of Valero’s refining capacity is located.” He has a $92 price target on the stock (18% upside potential).Another analyst singing the stock’s praise is RBC Capital’s Brad Heffern. After the company reported a very standard VLO beat for the second quarter, Heffern wrote “We like Valero Energy for its position at the bottom of the global refining cost curve and its significant leverage to the US Gulf Coast refining market.” However, the analyst did that the 2Q19 bar was relatively low and should have been more easily cleared. His buy rating comes with a $98 price target. Discover the Street’s best-rated stocks with the Top Analysts’ Stocks tool
- Moody's
Greenwich Capital Commercial Funding Corp., 2007-GG9 -- Moody's Affirms Two Classes of GCCFC 2007-GG9
Moody's rating action reflects a base expected loss of 71.9% of the current pooled balance, compared to 82.3% at Moody's last review. The second largest specially serviced loan is the 126-130 Main Street ($9.8 million -- 26.9% of the pool), which is secured by two mixed-use buildings in downtown New Canaan, Connecticut, located eight miles north of downtown Stamford.
- American City Business Journals
Sona Chawla to step down as president of Kohl’s
Kohl’s Corp. president Sona Chawla will step down in mid-October, the retailer said Friday. Chawla joined Kohl’s (NYSE: KSS) in 2015 as its chief operating officer, according to the company’s website. Before joining the Menomonee Falls-based department store chain, Chawla spent seven years with Walgreens in senior leadership roles.
- Business Wire
Kohl’s Announces Sona Chawla’s Plans to Step Down in October, Paul Gaffney Named Chief Technology Officer
Kohl’s (KSS) today announced that Sona Chawla will step down from her role as president at Kohl’s in mid-October to pursue new opportunities. “I want to thank Sona for her partnership and leadership in helping to drive our business forward and setting us up for the future,” said Michelle Gass, Kohl’s chief executive officer. “Amongst many contributions, Sona has been instrumental in our progress as a leading omnichannel retailer, driving innovation and growth across our digital business and stores, as well as providing leadership to our logistics strategy and long-term technology roadmap.
- Zacks
Nordstrom (JWN) Debuts Local 'Mini' Stores in New York
Nordstrom (JWN) opened its first Nordstrom Local store in New York today, expanding its store portfolio.
- Simply Wall St.
Only 4 Days Left To Cash In On Kohl's Corporation (NYSE:KSS) Dividend
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be...
- Business Wire
Kohl’s Announces 2025 Sustainability Goals with Focus on Climate Action, Waste and Recycling, and Sustainable Sourcing
The goals support and accelerate the company’s commitment to seeking solutions that focus on long-term sustainability. “At Kohl's we are committed to being a responsible corporate citizen, making our communities stronger by supporting initiatives and organizations that focus on health and wellness, sustainability, and environmental efforts that benefit all families,” said Michelle Gass, Kohl’s chief executive officer. Kohl’s sustainability initiatives are part of the company’s corporate social responsibility platform.
- American City Business Journals
Larry Montgomery, who helped make Kohl's a national brand, dies at 70
Larry Montgomery led Kohl's Department Stores Inc. on a surge of growth that is likely impossible for any retailer to repeat in today's economic environment — expanding the chain's brick-and-mortar footprint fivefold to nearly 1,000 stores in a decade.
- Bloomberg
The Trade War Is About to Hit Your Pocket. Literally
(Bloomberg Opinion) -- Americans better make the most of their Labor Day discount shopping. It could be the last they see for a long time.A 15% tariff that went into effect Sept. 1 on about $112 billion of goods imported from China will start pushing up prices of clothing, shoes and other consumer goods arriving at U.S. ports this week.That should start taking a serious toll on shopping in the U.S. While 82% of intermediate inputs are already affected by tariffs, just 29% of consumer goods have had levies to date. That figure will now rise to 69%, and 99% when a final tranche is imposed on Dec. 15, according to the Peterson Institute for International Economics.The Trump administration – or at least its trade representative, Robert Lighthizer – has recognized the risk of bringing the trade war to consumers’ pockets. The current total-war scenario, with tariffs imposed on almost the entirety of imports from China, was first threatened more than a year ago, but Lighthizer has worked hard to excise the sorts of goods purchased by price-sensitive shoppers from his product lists.The latest escalation means that sort of strategic precision is no longer possible. Around the country, apparel retailers have already worked out where best to jack up prices, while toy shops and sporting-goods stores will be doing the same ahead of the post-Thanksgiving tranche.One unexpected ally for the Trump administration is the retail industry itself. This is a business that invented the term “sticker shock,” after all, so trying to hide the costs of Trump’s policies from consumers isn’t exactly unfamiliar terrain.“The teams are working on a targeted pricing strategy in certain categories,” Gap Inc. Chief Financial Officer Teri List-Stoll told an investor call last month.“We have lots of tools in place to monitor elasticity and what the competitive environment is,” Kohl’s Corp. Chief Executive Officer Michelle Gass told analysts Aug. 21. “So we'll make very sound and surgical decisions.”There’s already a model for how this is likely to play out. One of the first rounds of tariffs imposed by the Trump administration applied a 25% levy on washing machines, but an April study by economists at the Federal Reserve and University of Chicago found that retailers instead decided to spread the pain around.Prices for washing machines jumped about 12% more than those of comparable goods after the levies were imposed – which might have suggested that stores and suppliers were taking some of the pain rather than passing the full 25% cost onto consumers. There was a telling exception, though: The price of dryers rose by about the same magnitude, despite the fact that they weren’t affected by the tariffs. In other words, retailers were splitting the extra cost between two similar products in an attempt to minimize the apparent rise in prices.As a result, shoppers are unlikely to see markup racks with “Prices raised on account of trade war” tags on them. Instead, watch out for harder-to-pin-down increases in categories where individual chains have pricing power, as well as weakening of gross margins, cost-sharing with Chinese vendors, and efforts to shift parts of the supply chain to other source countries. Returns on equity for consumer and durable goods companies in the S&P 500 index are already at recessionary levels, despite the general buoyancy of stocks in 2019; you’d be bold to bet that was set to improve over the balance of the year.Consumer sentiment is tracking down from its recent rosy levels in any case. Expectations for the economy suffered their sharpest monthly fall since 2012 in the University of Michigan’s latest survey. Views of current conditions fell to their lowest level since President Donald Trump was elected, and Republicans posted their most pessimistic consumer sentiment since Trump’s inauguration.(1)The strong U.S. economy over the past two years gave President Trump latitude to prosecute his trade battle with China – but as it starts to weaken, that may test his resolve. Given the relief in financial markets in recent days at signs of a detente, he might want to consider the benefits of a more lasting peace.(1) There's a strong partisan split in consumer sentiment, with views jumping sharply depending on whether or not a consumer's favored party is in the White House.To contact the author of this story: David Fickling at dfickling@bloomberg.netTo contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Motley Fool
3 High-Yield Stocks at Rock-Bottom Prices
These look like good values -- and pay hefty dividends to boot.
- Yahoo Finance
Goldman Sachs recommends 3 ways to trade the U.S.- China trade war
Goldman Sachs strategists have a few ideas to protect your portfolio, as the trade war with China reaches fever pitch.
- Motley Fool
Kohl's Taps Facebook for New Clothing Line
The retailer is counting on the social media site to have the right fashion sense for millennials.
- Motley Fool
Don't Be Fooled: Kohl's Isn't an Undervalued Dividend Stock
This brick-and-mortar retailer pays a big yield -- but it also faces big challenges.
- Simply Wall St.
Should You Care About Kohl's Corporation’s (NYSE:KSS) Investment Potential?
Today we are going to look at Kohl's Corporation (NYSE:KSS) to see whether it might be an attractive investment...
