Blood Bath for Retail Stocks Rolls On

U.S. retail stocks slumped once again on Friday morning amid a cascade of corporate earnings reports in the sector.

The drop in names like Nordstrom, J.C. Penney, and Dick’s Sporting Goods follows a drubbing on Thursday as Macy’s reported a particularly sharp drop in comparable-store sales.

The moves underscore the challenges facing brick-and-mortar retailers, which are closing stores as they contend with competition from e-commerce firms like Amazon.com, where consumers are increasingly spending their money.

 

A Commerce Department report on Friday showed a seasonally adjusted 0.4% jump in retail sales in April, and revisions higher to prior data, which eased concerns about a broader slump in consumer spending.

But the data also showed a growing divide: sales among nonstore retailers, which includes online shopping, jumped 1.4%, while department-store sales had a more mild rise of 0.2%. Nonstore sales are up nearly 12% over the past 12 months, while department store sales were down 3.7%.

“Non-store retail sales continued to benefit from the structural shift towards online shopping,” said Andrew Hunter of Capital Economics, in a note to clients.

 

As Amazon’s shares climbed 0.6% Friday morning, J.C. Penney fell 7.6%, Nordstrom sank 8.2%, and Dick’s dropped 6.6%. All are down more than 10% this year, and J.C. Penney has fallen more than 40%.

Nordstrom’s total sales actually rose in the most recent quarter, but investors chose to focus on a 2.8% drop in same-store sales at its department stores and Nordstrom.com. J.C. Penney reported a surprise profit, but revenues came in below expectations. Dick’s reports earnings on Tuesday.

Sears Holdings slid 7% and Vitamin Shoppe dropped 6.2%. The SPDR S&P Retail exchange-traded fund, the largest ETF tracking retail stocks specifically, was down 1.5% in morning trade, following its 2.7% drop on Thursday.

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