Promotions, crimped margins and online shopping weighed on most of the group, with the exception of the really, really good companies out there. While the SPDR S&P Retail Sector ETF (XRT) is up about 1.5% since the beginning of February, a few juggernauts in the retail sector have been much stronger.
In my earlier article, I suggested eight stocks that I thought would perform well from February to April: Amazon (AMZN), TJX (TJX), Nike (NKE), Costco Wholesale (COST), VF (VFC), Starbucks (SBUX), Michael Kors (KORS) and Macy's (M).
Since then, each stock has had a positive return, with the average return being roughly 7.5%. Compare that to the sector's 1.5% performance.The difference might not seem huge in absolute terms, but these stocks have done about five times better than the sector. My list has vastly outperformed the broad-based index. Equities in general have posted a monster rally in the past six trading sessions, with Wednesday's action mostly being a day to digest the big move. If the broader market can cooperate, I think many of the beaten down retail stocks will start to rise.
Is everything fixed? Is it all perfect? Will bricks and mortar enterprises overcome the barrage of online shopping? Definitely not. It's not all fixed and it certainly isn't perfect. The big shift to online shopping is only in the early stages. But some of these names, particularly my list of suggested stocks, will continue to dominate. You can go ahead and add Under Armour (UA) to the list as well. I feel foolish for having left it out in the first place.
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