Retail Is Alive and Kicking
Posted at 5:30 p.m. EST, Feb. 17, 2010
The most maligned industry out there might be retail. No matter what happens to the companies, people think the news is bad. These people are stuck in the past.
In the past few days, we have had fabulous reports from VF Corp (VFC), Perry Ellis (PERY) (mentioned in the columnist conversation) and Phillips Van Heusen (PVH). These three pretty much run the full spectrum in clothing retail. But The North Face, Arrow and Perry Ellis seem to mean nothing to people.To me, they are terrific barometers. So is Jones Apparel (JNY), another company that last week reported a nifty quarter, which was obscured by some one-time hits. Darden (DRI) and Whole Foods (WFMI) are two other plays I consider quintessentially retail. Whole Foods in itself is a sign of a healthy consumer because it is as expensive as all getout to go there; yet, its take-home business is booming. But it isn't so booming that it's hurting the Olive Gardens and the Red Lobsters of the world. Or, consider Panera (PNRA), Chipotle (CMG) and Cheesecake (CAKE). These are moderately priced places, and you could argue that strength there doesn't mean much. I say, "Wait a second, these places saw slowdowns when things got tough; the slowdown is over." Speaking of places that saw slowdowns, how about Abercrombie & Fitch (ANF), the quintessential overpriced teen retailer? Even this company has its act together now. I can throw in a whole bunch that haven't recently reported, Tiffany (TIF) and Nordstrom (JWN) being the best examples. Also, do you think we would get all of those upgrades of Home Depot (HD) if business wasn't improving? How about that great recent number from Costco (COST), which is propelling that stock up nicely? The simple conclusion: Retail is alive and well. Once again, because unemployment is high, we dismiss it, or we say it is an unimportant time of the year, or that a calendar shift helped the results. I say, give me a break. Things are better. That's all there is to it. Random musings: Applied Materials (AMAT) and Hewlett-Packard (HPQ) seem pretty terrific to this guy. At the time of publication, Cramer was long Costco and Home Depot.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV