NEW YORK (TheStreet) -- Retail sales for June were largely disappointing following several months of better than expected results tied to warmer than usual weather. We sold out of Costco (COST) last week - having run 14% from its recent lows we didn't like the risk/reward. But it's a name that continues to be on our radar screen given its quality brand, dominance in the club warehouse market, strong returns and steady recurring revenues which is driven by its membership fee business.
The company disappointed on the same store sales line coming in at the low end of its guide at 3% gain ad 4% consensus. But underlying fundamentals remain strong with core US comps at 3% (and a nice 11% 2 year stacked basis), International comps up 8% (an impressive 17% 2 year stacked) and traffic remained solid at 3% despite the Independence Day shift.
In the meantime, we will stick with our TJX (TJX) position which continues to mail it in with 7% June comps, higher earnings guidance and a strong inventory position. Jim and I debate whether to keep taking gains in this one, but with strong momentum and secular growth in the off priced segment - we will continue to enjoy the ride. Plus at 15x forward estimates the stock trades below its earnings growth rate of 16-18%. As a sidenote, please check out our latest addition in the retail segment Nike (NKE) and why we continue to add to Caremart (CVS) - which is now posted on the site.
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
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
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
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