|Bid||0.00 x 800|
|Ask||0.00 x 1000|
|Day's Range||43.35 - 44.48|
|52 Week Range||38.10 - 52.96|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.01|
|Expense Ratio (net)||0.35%|
I will start with the conclusion first. There is more good than bad in this Nike (NYSE:NKE) earnings report. Long-term, Nike's revenue miss is not a reason to sell Nike stock, as the broader thesis remains intact.Source: Alessio Jacona via FlickrInvestors on Wall Street have a habit of overshooting trends. Recently, the experts have all been in agreement that NKE was a stock that everyone should absolutely own. Then, at some point like today, they realize their overzealousness and sell NKE down in droves.The important thing that follows such a situation is how far they fade it. Last year, we saw a similar situation where they were enamored with Nvidia (NASDAQ:NVDA) and they took that stock too far, too fast. Then, it got cut in half last year from the all-time high.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Beaten-Up Stocks to Buy as They Reverse Course Today the thesis is that NKE situation here is completely different than NVDA and the dips in Nike stock here could soon be an opportunity. Nike Stock EarningsLast night, Nike reported earnings and the stock is falling 4.5% on the headline. The problem is that the stock came into the earnings up 19% year-to-date and it actually set an all-time high yesterday. So giving back a little on good news is healthy as it builds a better base for more upside. This would also depend on the markets continuing the rally this year.Management delivered a strong report in the face of adversity. They beat on almost all metrics especially in China and the Eurozone where they faced the biggest hurdles. There, NKE grew sales double digits in spite of currency, geopolitical headwinds and central bank interference.So management is doing its job very well. You don't maintain high growth in a monster company without excellent execution. It's not that Nike delivered a bad report. The selling today is more a matter of overexuberance from Wall Street going into earnings.But while gross margins continue to expand, expenses remain a concern. But I don't worry about it for as long as they are putting it to good use and the strong results prove it. This is a proven team and I don't have a reason to doubt Nike now. How to Play Nike's Earnings DipThis dip is an opportunity to hold the stock for the long-term. It is definitely not a reason to leave money on the table. Nike's earnings report doesn't change the broader "buy" thesis.However, Nike stock is not cheap; It sells at 33x earnings, but it's not bloated either. It's much cheaper than Lululemon (NASDAQ:LULU), which sells at a 44 P/E, and Under Armour (NYSE:UA) still operates with a loss. Clearly, it's not an overvalued stock, so it would make for a reasonable starting point.Technically, since the stock is near all-time highs and falling there are some levels to watch for support.The volume profile since the December lows suggests that the NKE stock value area spans all the way to $75 per share. Obviously, it's not likely to head straight there as there are several interim support levels.The one area that interests me the most is $82/$83 per share. It has been pivotal since last June. I would be surprised if the bulls would let it fail without a strong fight. This usually creates congestion, which translates into a stall in the fall. Bottom Line on NKE StockThe next lowest big pivot area is around $79/$80 per share. This was the ledge from which NKE fell last 12% last October, so I imagine will be another battle zone for bulls and bears if the first support fails. These are not forecasts but mere scenarios that I need to know if I am trading the stock.I don't believe that this dip will cause many analysts to downgrade their outlooks on it as it is still trading below their average price targets. So if markets, in general, are going to be higher later then so is Nike stock.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on Twitter and Stocktwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Retail Stocks That Will Continue to Rebound in 2019 * 5 Stocks To Buy for the Happiest Employees * 7 ETFs for a Millennial Portfolio Compare Brokers The post Don't Sell Nike Because of Its Revenue Miss appeared first on InvestorPlace.
People for the Ethical Treatment of Animals (PETA) has taken a stake in newly-public Levi Strauss & Co. in order to urge the denim icon to switch its cow-skin leather patches to vegan leather ones. The activist organization says it has purchased the minimum amount of shares necessary to propose shareholder resolutions, and both attend and speak at annual shareholder meetings."PETA is heading to Levi's boardroom to urge the company to stop peddling these patches, which cause cows immense pain and suffering," PETA President Ingrid Newkirk said in a statement. Levi's ended its first trading day up a whopping 32%, and is up 1.1% in Friday premarket trading. The SPDR S&P Retail ETF has gained 8.8% for the year to date while the S&P 500 index has rallied nearly 14% for the period.
Retail stocks were hammered in late 2018 amid concerns that the global economy was slowing and that the global consumer was consequently losing confidence. The SPDR S&P Retail ETF (NYSEARCA:XRT) dropped 30% from early September 2018, to late December.Then, the post-Christmas rally happened. Retail stocks, and the market in general, staged a huge turnaround the day after Christmas. They have stayed on a solid uptrend ever since because global economic fundamentals have started to stabilize and improve, while the global consumer has regained confidence in 2019.All in all, the S&P Retail ETF is up 15% since Christmas Eve.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor the most part, this rebound in retail stocks should continue because the fundamentals continue to improve. Trade and FX headwinds are becoming less severe. The rate hiking headwind has turned into a accommodating monetary policy tailwind. Consumer confidence metrics across the globe, and in particular the U.S., are bouncing back. Job markets globally remain healthy. Wages globally are heading higher.Overall, the economic fundamentals today continue to support a strong retail environment for the foreseeable future. Consequently, the early 2019 rebound in retail stocks should continue over the next several months. * 10 Stocks on the Rise Heading Into the Second Quarter Which retail stocks will lead this continued rebound? Let's take a deeper look. Nike (NKE)Source: rodrigofranca via Flickr Category: Athletic Apparel % Gain Since Dec. 24: 28%Shares of global athletic apparel giant Nike (NYSE:NKE) have been on a tear in 2019. Since bottoming out in late 2018, Nike stock is up nearly 30%, and now trades at fresh all-time highs.Why the big rally? Nike has continued to expand its dominance in the athletic-apparel category using faster-than-peer product innovation -- an enhanced direct retail strategy -- and unique marketing campaigns that have energized the core customer base. As Nike has done this, North America sales growth has come back into solidly positive territory. International growth has remained hot. Margins have recovered. And the whole company is back to firing on all cylinders.This rally in Nike stock will continue because this dominance is nothing new. Nike has dominated the athletic-apparel scene for over twenty years now. Time and time again, competitors arise and threaten Nike's dominance. Time and time again, Nike responds effectively, crushes the competition and only expands its dominance. This will continue to happen for the foreseeable future, and it will keep Nike stock on a long-term upward path. Home Depot (HD)Source: Shutterstock Category: Home Improvement % Gain Since Dec. 24: 17%Shares of Home Depot (NYSE:HD) dropped big in late 2018 amid concerns that the U.S. housing market was finally cooling after years of red-hot growth. But as financial markets have rebounded in 2019, so has Home Depot stock. It's up nearly 20% since late 2018.Why the big turnaround? U.S. housing market fundamentals have stabilized and improved in 2019. Specifically, the Fed went from hawkish to dovish, and stopped hiking rates. That caused mortgage rates, which had been on a sharp run up in late 2018, to fall big in early 2019. Also, consumer confidence has bounced back, wages have continued to rise, the unemployment rate remains low, housing starts have come roaring back and home-improvement-related retail sales rose over 8% year-over-year in January 2019. * 5 Stocks To Buy for the Happiest Employees All these improvements will continue so long as U.S. economic fundamentals remain solid, which they should. Americans will keep buying and remodeling homes. And Home Depot's sales and profits will continue to rise. As such, so long as the U.S. economy remains on solid footing, the rebound in Home Depot stock should persist. Lowe's (LOW)Source: Mike Mozart via Flickr (modified) Category: Home Improvement % Gain Since Dec. 24: 20%The story at Lowe's (NYSE:LOW) parallels the story at Home Depot. The stock was killed in late 2018 on slowing U.S. housing market concerns. It's rebounded in a big way in 2019 as housing market fundamentals have stabilized and improved.Importantly, though, Lowe's appears to finally be gaining share against Home Depot for the first time in a long time. For the past several years, Home Depot has consistently out-comped Lowe's in a sign that Home Depot was gaining market share and Lowe's was losing market share. But to end 2018, the gap between Lowe's and Home Depot's comparable sales growth was the narrowest it's been in two years. In January 2019, Lowe's actually out-comped Home Depot.The implication? For the first time in a long time, Lowe's is leveling the playing field with Home Depot and actually gaining share in the home improvement market. Lowe's stock is still materially cheaper than Home Depot stock. As such, as home improvement stocks continue to rebound, Lowe's stock could be the big winner. Target (TGT)Source: Mike Mozart via Flickr (Modified) Category: General Merchandise % Gain Since Dec. 24: 26%In late 2018, shares of Target (NYSE:TGT) fell off a cliff as investors were spooked by slowing comparable sales growth and compressing margins against the backdrop of a slowing U.S. economy. Target stock dropped big. But it's also rebounded big since then, staging a 26% rally since Christmas Eve.The turnaround in Target stock was powered by a few things. First, the U.S. economy stopped slowing and started stabilizing. Second, the U.S. consumer regained confidence in early 2019 and general merchandise retail sales rose 2.2% in January 2019. Third, Target reported solid holiday-quarter numbers that underscored that Target remains a healthy growth company with a red-hot digital business and stable margins. * 3 Out-of-Favor Consumer Stocks to Buy This turnaround in Target stock will continue because the fundamentals remain favorable and the stock remains cheap. Given stable U.S. economic fundamentals and Target's newly developed omni-channel retail presence, this company projects as a stable low single-digit revenue grower and high single-digit profit grower over the next several years. Yet, Target stock trades at just 13x forward earnings. That's too cheap for that level of growth, meaning this rally in Target stock will persist. Ulta (ULTA)Source: Mike Mozart via Flickr Category: Health & Personal Care % Gain Since Dec. 24: 46%Shares of Ulta (NASDAQ:ULTA) have been on a roller coaster ride over the past several months. In late 2018, Ulta stock dropped nearly 30% in just over a month. In 2019, however, Ulta stock has rebounded by nearly 50% in just over two months.The big selloff in late 2018 was the result of a below-consensus holiday-quarter guide converging on a rich valuation. The big rebound has been the result of the company blowing the lid off that below-consensus guide and reporting very strong holiday-quarter numbers. It also helps that comparable sales growth accelerated, margins expanded and the forward guide was strong -- all against the backdrop of a resurgent U.S. consumer. Now, Ulta stock is now making new highs.Ulta stock will continue to make new highs for the foreseeable future because this company is getting its groove back. New product launches in late 2018 helped reinvigorate comparable sales growth back to the near 10% range. These new product launches will continue to drive healthy customer enthusiasm and traffic gains through 2019. As they do, Ulta's revenues and profits will continue to impress, and Ulta stock will stay on an uptrend. Foot Locker (FL)Source: Shutterstock Category: Athletic Apparel % Gain Since Dec. 24: 22%Foot Locker (NYSE:FL) stock dropped big in late 2018 amid slowing U.S. economy concerns. But as the U.S. economy has stabilized, Foot Locker stock has rebounded.The rebound in Foot Locker stock has been especially large (over 20% since Christmas Eve) because of a strong holiday-quarter earnings report that underscored healthy operating fundamentals for the company. Comps rose 10%. Margins expanded in a big way. Inventories fell. The guide was healthy. Investors cheered. Foot Locker stock popped. * 3 Bank Stocks Whacked Down by the Fed In the big picture, Foot Locker's numbers have been getting better for a long time now. Now, they are finally good again, and this tells me that the worst is in the rearview mirror for FL. Going forward, Foot Locker will remain an important and stable player in the athletic-apparel retail landscape. FL's growth profile, coupled with the current 11x forward earnings multiple, should be enough to keep Foot Locker stock on a winning path. Best Buy (BBY)Source: Best Buy Category: Electronics % Gain Since Dec. 24: 43%In late 2018, there was a rumor flying around that the consumer electronics space was rapidly slowing. Consequently, shares of Best Buy (NYSE:BBY) dropped nearly 50% in a matter of three months.That rumor was a bunch of hot air. In early 2019, Best Buy reported strong holiday-quarter numbers that included positive comparable sales growth, big digital sales growth, margin expansion and an above-consensus full-year guide. Those numbers were proof that Best Buy remains the leader in the still-growing consumer electronics space. Consequently, Best Buy stock rallied.Still, Best Buy stock is pretty cheap at just 12x forward earnings. That's too cheap for Best Buy, a company which should report positive comps and healthy margins for the foreseeable future thanks to secular tailwinds (the widespread emergence of IoT and AI technologies). As such, a cheap valuation and favorable growth fundamentals should keep BBY stock on an upward trend for the foreseeable future.As of this writing, Luke Lango was long NKE, HD, TGT, FL, and BBY. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Specialty Retail ETFs to Buy the Industry's Disruption * 5 Stocks To Buy for the Happiest Employees * 3 Out-of-Favor Consumer Stocks to Buy Compare Brokers The post 7 Retail Stocks That Will Continue to Rebound in 2019 appeared first on InvestorPlace.
Casey's General Store (NASDAQ:CASY) stock is stuck in a trading range but this presents opportunities. It recently reported quarterly results and the reaction to CASY stock has so far been sub-optimal. But CASY is falling into support, so it's time to evaluate owning the shares for the mid and long term.Source: Shutterstock CASY is lagging the sector as it is down 1% year-to-date, whereas the SPDR S&P Retail ETF (NYSEARCA:XRT) is up 7% for the same period. So it has some catch up to do in the short term. But for the 12 months period, CASY is up 13% much higher than the sector exchange-traded fund.When management reported, it beat earnings estimates for this quarter and this was a triple-digit increase over this same period last year. Sales on the other hand were soft. CASY missed expectations by almost 6%, which is also a flattish red performance relative to last year. The good news in this is that clearly management is able to manage through tough times.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTo that, management lowered its next quarter earnings estimate but raised it for the full year of 2019. This indicates that they have a hold on their business and that they have a plan to fix it by year-end. * 10 Stocks on the Rise Heading Into the Second Quarter This gives me confidence in the team, so if I own the shares I stay in them for as long as my thesis remains intact. For those looking to invest in Casey's General Store stock for the long term, this is as good a time to buy. Management over-delivered on earnings and is forecasting better results for the full-year outlook.For those who prefer to trade the CASY stock short term, there are important levels to note. How to Approach CASY Stock TodayIt is rare to see a brick-and-mortar retail company like CASY be a momentum stock, but this one acts like it. It has its fans since last year when the equities were in free fall into December, it traded in a three-month horizontal trading range. They did not fall into lower lows like the rest. In fact, CASY stock set its lows two weeks before the S&P 500 Christmas bottom.So when markets, in general, hit their bottom in December, CASY set a higher low at $121 per share and rallied to set new all-time highs. Since then, it has had four 10% moves in either direction, so clearly, traders in it are active.In December, CASY stock set its low of $117 per share. This is the biggest pivot and it has been in contention since 2015. On the way down, such pivots act as support because both bulls and bears fight over them hard, thereby creating congestion. This was also the same spot from which Casey's General Store stock broke out last September. Management reported earnings and the stock sprang to its higher trading range.Conversely, the net reaction to the March earnings report was negative after a brief pop. So now it needs to hold $124.5 or risk retesting $120, which is the last line of short-term defense before the December low. While this is not a forecast, it is a realistic scenario that investors need to know. * 7 Video Game Stocks on Steep Discount I don't look for help from the Wall Street experts as they are split with their opinions between BUY and HOLD and the stock is trading well below their average price target ranges.So I could try to be surgical in my entry points or just buy CASY stock near potential support and stick to tight stop loss levels. Otherwise, I trade it from the long term and not worry so much about finding the perfect entry point as long as I don't chase it too high. Right here, CASY should have enough support to serve as a decent entry point for a swing trade higher or a long-term hold alike.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on Twitter and Stocktwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Specialty Retail ETFs to Buy the Industry's Disruption * 5 Stocks To Buy for the Happiest Employees * 3 Out-of-Favor Consumer Stocks to Buy Compare Brokers The post Casey's General Store Stock Is a Short and Long-Term Winner appeared first on InvestorPlace.
Shoe giant Nike gears up to report financial results after the bell, and legendary denim brand, Levi's, goes back on the public market on Thursday.
In the wake of the new Hudson Yards shopping destination launch on Manhattan's West Side, Brookfield Properties has announced a partnership with Convene, a company that creates event spaces, to launch a 73,000-square-foot venue at Brookfield Place in downtown Manhattan. Convene will build and operate the space, which will house several rooms for meetings and events both large and small. The venue will also have a cafe. The SPDR S&P Retail ETF has gained 8% in 2019, the ProShares Decline of the Retail Store ETF has lost 6% for the period, and the S&P 500 index has rallied 12.6% for the year so far.
According to thredUP's 7th annual resale report, the secondhand apparel business is booming and is expected to hit $51 billion by 2023.
St. Patrick's Day is around the corner and investors across the world are keen on trying their Irish luck for green returns in their stock portfolio.
Buckle Inc. reported Friday fiscal fourth-quarter sales that fell below expectations, as earnings also missed. The shoes and apparel retailer's stock was still inactive in premarket trade. Net income for the quarter to Feb. 2 declined to $41.1 million, or 84 cents a share, from $42.0 million, or 87 cents a share, in the same period a year ago. The FactSet EPS consensus was 85 cents. Sales fell 6% to $264.4 million, below the FactSet consensus of $265.5 million, while online sales grew 1.3% to $33.9 million. Same-store sales were down 0.6%, matching the average estimate of two analysts surveyed by FactSet. The stock has lost 4.8% over the past three months, while the SPDR S&P Retail ETF has climbed 5.9% and the S&P 500 has rallied 8.0%.
Shares of GameStop Corp. were indicated up nearly 1% in premaket trade Thursday, after shareholders Hestia Capital Partners L.P. and Permit Capital Enterprise Fund L.P. urged the video games retailer to tender up to $700 million worth of its stock and bring in new board members. Based on Wednesday's stock closing price of $11.20, the proposed tender amount would represent about 61% of the shares outstanding. Hestia and Permit, which combined own 1.3% of GameStop shares outstanding, sent a letter to the company's board sharing concerns regarding the "dramatic underperformance" of the stock. They said they believe a fair value of the company is "at least" $19 per share, which is 70% above Wednesday's closing price. The shareholders urged the company to return a significant portion of its cash, which they estimate to be about $1.5 billion as of the end of fiscal 2018, to shareholders. The stock has tumbled 27.6% over the past 12 months, while the SPDR S&P Retail ETF has gained 1.0% and the S&P 500 has tacked on 2.2%.
Shares of Express Inc. plunged 8.9% toward a record low in premarket trade Wednesday, after the fashion apparel retailer beat fourth-quarter profit expectations but missed on net sales and provided first-quarter outlook that was worse than forecasts. The company swung to a net loss for the quarter to Feb. 2 of $1.1 million, or 2 cents a share, from a profit of $27.4 million, or 35 cents a share, in the year-ago period. Excluding non-recurring items, such as costs related to the CEO departure and Homage investment, adjusted EPS fell to 19 cents from 33 cents but was above the FactSet consensus of 15 cents. Net sales declined 10% to $628.4 million, missing the FactSet consensus of $629.6 million, as same-store sales declined 6% versus expectations of a 6.2% drop. For the first quarter, Express expects a loss per share of 27 cents to 34 cents, compared with the FactSet consensus for a per-share loss of 4 cents, and a same-store sales decline of 9% to 11% versus expectations of a 5% decline. The stock has tumbled 32% over the past 12 months, while the SPDR S&P Retail ETF has gained 0.1% and the S&P 500 has tacked on 1.0%.
Sephora said Monday that it will add 35 locations in 2019, including a store in New York's newest development, Hudson Yards, which launches on March 14. Other cities getting a new Sephora store include Palm Springs, Calif., Washington D.C., and Ft. Lauderdale, Fla. Sephora has 460 stores in the Americas, and 660 locations in J.C. Penney Co. Inc. stores. E.L.F. Beauty Inc. announced in February that it will close all of its 22 stores. The SPDR S&P Retail ETF has gained 8.1% for the year to date while the S&P 500 index has rallied 10% for the period.
Off-price retailer Ross Stores Inc. said Monday that it plans to add 100 new locations in 2019. The company currently operates 1,502 Ross Dress for Less locations in the U.S. and Guam, and 243 dd's Discounts across 18 states. The new additions would include 75 Ross stores and 25 dd's Discounts. "As we look out over the long-term, we remain confident that Ross can grow to 2,400 locations and dd's Discounts can become a chain of 600 stores given consumers' ongoing focus on value," said Ross Stores President Jim Fassio in a statement. Ross Stores stock has rallied 7% for the year to date, the SPDR S&P Retail ETF has gained 8.1%, and the S&P 500 index has gained 9.4% for 2019 so far.
Shares of Burlington Stores Inc. sank 5.2% toward a 2-month low in premarket trade Thursday, after the off-price retailer reported fiscal fourth-quarter earnings that beat expectations but sales that missed. Net income fell to $184.4 million, or $2.70 a share, from $240.7 million a year ago, which included a tax-reform related benefit. The company didn't provided year-ago EPS, but said EPS declined 22%. Excluding non-recurring items, adjusted EPS was $2.83, above the FactSet consensus of $2.77. Total revenue rose 2.8% to $2.00 billion, but was below the FactSet consensus of $2.06 billion, as same-store sales growth of 1.3% missed expectations for a 3.2% rise. For 2019, the company expects adjusted EPS of $6.93 to $7.06, compared with the FactSet consensus of $7.06, and total sales to rise 9% to 10%, while the FactSet consensus of $7.29 billion implies 9.7% growth. The stock has gained 6.0% over the past three months, while the SPDR S&P Retail ETF has advanced 4.6% and the S&P 500 has tacked on 5.3%.
Cato Corp. reported Thursday a February same-stores decline of 10% from a year ago, while net sales declined 12% to $59.1 million. The discount apparel and accessories retailer's stock was still inactive in premarket trade. "February same-store sales were well below our expectations," Chief Executive John Cata said in a statement. The company said it closed 3 stores during the month. Over the past year, stores operated declined to 1,308 in 31 states from 1,351 stores in 33 states. Cato's stock has rallied 20.5% over the past 12 months, while the SPDR S&P Retail ETF has slipped 0.6% and the S&P 500 has tacked on 1.6%.
Shares of Abercrombie & Fitch Co. shot up 9.0% in premarket trade Wednesday, after the apparel retailer beat fiscal fourth-quarter earnings and sales expectations and provided an upbeat outlook, as strength in its Hollister stores offset weakness in Abercrombie. Net income for the quarter to Feb. 2 rose to $96.9 million, or $1.42 a share, from $74.2 million, or $1.05 a share, a year ago. Excluding non-recurring items, adjusted EPS slipped to $1.35 from $1.38, but was well above the FactSet consensus of $1.15. Net sales fell 2% to $1.16 billion, but beat the FactSet consensus of $1.13 billion, as same-store sales growth of 3.0% topped expectations of a 1.4% rise. Among store brands, Hollister sales rose 1% to $712.9 million, beating the FactSet consensus of $690.9 million, while Abercrombie sales fell 9% to $442.7 million to miss expectations of $446.0 million. For 2019, the company expects sales to rise 2% to 4%, while the current FactSet consensus of $3.61 billion implies 0.5% growth. A&F's stock has rallied 10.5% over the past three months, while the SPDR S&P Retail ETF has gained 1.5% and the S&P 500 has advanced 3.5%.
Shares of BJ's Wholesale Club Holdings Inc. were indicated up over 1% in premarket trade Wednesday, after the membership-based warehouse retailer reported fiscal fourth-quarter profit and sales that beat expectations. Net income for the quarter to Feb. 2 fell to $64.3 million, or 46 cents a share, from $66.7 million, or 71 cents a share, in the year-ago period. Excluding non-recurring items, adjusted EPS rose to 44 cents from 36 cents, above the FactSet consensus of 36 cents. Total revenue declined 3.9% to $3.42 billion, but beat the FactSet consensus of $3.36 billion, as membership fee income jumped 11% to $73.1 million. Same-store sales rose 2.9%, beating expectations of 2.1% growth. For 2019, the company expects EPS of $1.42 to $1.50, surrounding the FactSet consensus of $1.47, and net sales of $12.9 billion to $13.2 billion, below expectations of $13.4 billion. The stock has rallied 12.7% over the past three months, while the SPDR S&P Retail ETF has gained 1.5% and the S&P 500 has tacked on 3.5%.
For a long while, the retail sector has not gotten much respect on Wall Street. This is probably a lingering effect due to the shellacking that retail stocks received from the onset of the phenomena that Amazon (NASDAQ:AMZN) brought down upon them over a decade ago. Brick and mortar retail did have stints of optimism last year where the group came back in favor but only to crash into Christmas right back into five-year pivot support. Target (NYSE:TGT) fared relatively better than the collective. Target stock put in a higher low in December, easily beating the one set in the fall of 2017.Source: Mike Mozart via Flickr (Modified)This is constructive price action from the long-term charts that's better than say Best Buy (NYSE:BBY).Case in point, Monday -- on a day where the equity markets saw panic selling -- TGT closed only down 0.40%. Compare this to the SPDR S&P Retail ETF (NYSEARCA:XRT) that fell 2% on the same day. This was going into the uncertainty of the company's earnings report, which it delivered this morning.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTGT even beat typical high flyers like Salesforce (NYSE:CRM), which fell 4% going into its earnings event.This morning, Target stock is flying high up 4.4% on a strong earnings report. Management beat expectations, especially in holiday comparable sales. This number was in question because of the disastrous December retail report that shook the sector a few weeks ago. Yet, here is another actual result report that contradicts the anomalous number. * 10 Best Stocks to Buy and Hold Forever These days, investors demand that not only companies beat expectations, but also raise forward guidance. TGT did just that and raised its guidance range for the full year of 2019. This propagates an air of confidence that translates into stock buying action on Wall Street.Year-to-date, TGT stock came into the earnings report already up 10%. This is double that of what Walmart (NYSE:WMT) and almost inline with the S&P 500. All this is to say that Target stock has its fans on Wall Street, which means that management is doing things right.Yet most analysts who cover it rate it as a HOLD and therein lies the opportunity. Some of these analysts will have to upgrade Target stock because management sounds like they are executing on a consistent plan.Maybe this is the time to go long a stock that just delivered a beat and raise. The momentum is clear and there is more upside opportunity than downside risk from here. This makes a good base for TGT bulls to work off.Target has rallied in the face of market-wide adversity with the tariff headlines. This is investors voting with their actions. Since they don't ring bells at perfect entry points, risking some money on a bullish bet here is not likely to be a mistake, so it's worth the try.Fundamentally, TGT stock is cheap selling at a price-to-earnings ratio of 13, which is three times cheaper than WMT. Management is addressing the AMZN threat by using their online sales so retain market share. They seem to have embraced the shift in shopping patterns and their plans are working. However, I still remain skeptical that the collective brick-and-mortar online efforts, in general, are not taking back sales but rather merely stopping the bleeding for now. Bottom Line on Target StockThe macroeconomic environment still favors the retail sector, especially in the U.S. We have full employment and consumers still have a strong spending appetite. So the sector is likely to continue strong. If the stock markets rally from here, then TGT is likely to be in the lead pack. Conversely, if the bears succeed in creating another correction, then Target has shown relative strength, so it may hold up better.This morning's pop in TGT almost fills a huge gap from its last earnings report. This came after Target stock collapsed from Nov. 12. So there is a lot more work to do in order to recover all the red candles all the way back to $87 per share.This is a lot of room to cover and there is likely resistance along the way, especially at $80 and $83 per share. I don't like chasing big pops, so I may want to hold out another tick before buying shares on this rally. Sometimes it's best to nibble first, so taking a position in tranches makes the most sense. This way, if it rallies, then I am already in. If it falls, then I will have the opportunity to average into a reasonable position in TGT. * 7 Consumer Staples ETFs to Buy Now Conversely, if TGT stock falls below $71.70 I would expect another test of $67 per share. While this is not a forecast, it is a scenario that lurks below. The rhetoric in the media is that the stock market is long in the tooth here, so a correction may become a self-fulfilling prophecy. I am not of that opinion, but I won't be surprised if we talk ourselves into a small correction here before the next leg up in equities.The bottom line is simple. The Target team is executing well and the results prove it. Those who want to buy a quality retail stock ought to consider it for their portfolio. It has far less froth to shed than a lot of the other competitors.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on Twitter and Stocktwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Big Data Stocks That Deserve a Closer Look * 7 Best Energy Funds to Outperform the Market * 5 Blue-Chip Stocks Ready to Rise Compare Brokers The post Why Target Stock Will Keep Flexing Its Muscle In the Months Ahead appeared first on InvestorPlace.
Shares of Children's Place Inc. tanked 16% in premarket trade Monday, after the children's apparel retailer reported fiscal fourth-quarter earnings and sales, and provided a full-year outlook, that were all well below expectations, citing the "unprecedented" challenge from the bankruptcy of rival Gymboree. Separately, the company said it won an auction to buy the intellectual property and related assets of Gymboree and Crazy 8. The company swung to net income of $12.02 million, or 74 cents a share, from a loss of $9.9 million, or 57 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted EPS came to $1.10, below the FactSet consensus of $2.10. Net sales fell 6.9% to $530.6 million, missing the FactSet consensus of $553.1 million, and the 0.6% decline in same-store sales missed expectations of a 2.7% increase. For fiscal 2019, the company expects adjusted EPS of $5.25 to $5.75, below the FactSet consensus of $8.84; net sales of $1.89 bln to $1.92 bln, versus expectations of $2.01 billion; and same-store sales of flat to down 1%, compared with expectations of 3.7% growth. "We overlap with nearly 70% of the approximately 800 Gymboree and Crazy 8 stores, all of which will complete their liquidation events and close within the next 60 days," said Chief Executive Jane Elfers. "Additionally, we are challenged by a very late Easter." The stock has tumbled 23.2% over the past three months while the S&P 500 has gained 3.8%.
Short sellers have bet on the demise of brick-and-mortar retailers, but several of these stocks have rallied, racking up huge losses for the shorts.