This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Be Selective With The Retail Group

TheStreet Premium Services

A complimentary preview
of Options-Profits Previews

In the luxury department store space, Saks (SKS) has put near-term pressure on sales for the group because of the impact Hurricane Sandy had on their east coast presence. The company posted a 0.7% same store sale increase in the fourth quarter of 2012, slightly better than the flat guidance, but below the 6.3% same store sales increase Nordstrom (JWN - Get Report) reported and the 5.3% increase at Neiman Marcus.

Based on the commentary from MasterCard Advisors, it's possible that the impact of winter storm Nemo, which dumped large amounts of snow in New England (a big market for Saks), could have impacted sales at Saks in February, dragging down sales for the luxury department store group.

Management has been cautious on sales, stating that 2013 will be a volatile year given higher taxes and fiscal uncertainty. Saks is also in the midst of a transition year as they expand IT initiatives and improve the e-commerce business. That will put pressure on margins as well as the stock near-term (it's trading at a premium to the department store group).

Gap (GPS - Get Report) and TJX (TJX - Get Report) were two retailers that pleasantly surprised investors with their better-than-expected February same store sales last week. Gap's Old Navy division was surprising resilient despite the impact the payroll tax had on lower-end consumers. The company is delivering trend right merchandise and is managing inventories well, and the stock has been on an uptrend since reporting earnings at the end of February.

TJX, the operator of TJMaxx, Marshalls and Home Goods stores, benefitted from the improved weather conditions at the end of the month and exhibited strength in the home business during the month.

It's become a tough environment for retailers to manage their business given not only the payroll and gasoline concerns, but also the political uncertainty surrounding the sequester. Sarah Quinlan, Senior Vice President at MasterCard Advisors, says retailers are "seeing changes in sales day to day, week to week, and month to month. As such they have to manage their business on those time frames."

That being said, today's broad industry report shows that not all retailers are being negatively impacted by the external pressures. Retailers that have the right strategy and the right merchandise are winning in this environment. Not all retailers are created alike.

-- Written by Lindsey Bell in New York.

>To follow the writer on Twitter, go to Lindsey Bell.

EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
Top Rated Stocks Top Rated Funds Top Rated ETFs