Although retail bankruptcies are on track to become the highest since the Great Recession, there was some good news on Wall Street last week.
It all started when Target raised its earnings guidance, citing “improved traffic and sales” over the past two months. The news brought Target’s shares up nearly 5 percent.
Investors apparently took that as a good sign for retailers, and shares of Gap, Kohl’s, Dillard’s, and Urban Outfitters each climbed between 5 and 6 percent.
Even Sears, the extremely troubled store chain that recently admitted it has “substantial doubt it will survive,” saw an increase in share price of a whopping 7.2 percent.
JCPenney, which announced plans to close 138 stores earlier this year, has announced plans to put specialty toy shops in all its remaining facilities. It said the company has been “pleasantly surprised” by its current experiments with larger toy inventories. Its shares climbed 7.8 percent in trading on July 13.
As for Target, research firm Cowen said, “we are turning incrementally more positive on [Target] given impressive performance over the last several quarters.”
An analyst with Gordon Haskett Research Advisors wrote, “Over the past few weeks, the Street has shrugged off any…good news [about retail], so it will be interesting to watch if [Target’s] favorable update will change the narrative around the retail group.” He did note that Gordon Haskett still recommends selling Target stock.
Although the stock market ended up on a modestly higher note at the end of Thursday’s trading, investors were waiting for upcoming corporate earnings reports before they made any big moves.
“Markets are really biding their time until we get into tomorrow’s more robust earnings releases,” Eric Wiegand, senior portfolio manager for Private Wealth Management at U.S. Bank, said on July 13.
On Friday, the Dow, S&P500, and NASDAQ inched higher. But we will see what happens in the markets as major players like Bank of America, Goldman Sachs, Netflix, and IBM announce their earnings this week. Hopefully, some other brick-and-mortar retailers will have good news, too.
Photo: Target corporate headquarters in Minneapolis, Minnesota. (Ken Wolter / Shutterstock.com)
