Retail stocks were climbing Friday on hopes the U.S. economy, shuttered by the coronavirus pandemic, would be returning to life sooner than expected.
Stocks were rising in general. And the SPDR S&P Retail EFT (XRT) - Get Report, which tracks the performance of scores of U.S. retail stocks, was climbing 3.2% as investors looked beyond the current situation toward a post-covid-19 future.
President Donald Trump on Thursday outlined plans to reopen the economy in three phases. The White House has yet to ensure, however, that testing for the coronavirus will be made more readily available, as business leaders and infectious disease experts have urged.
Phase one would see restaurants, gyms, movie theaters and large sporting venues reopen if they adhere to strict social-distancing requirements.
“We’re starting our life again,” Trump said at a press briefing. “We’re starting rejuvenation of our economy again."
The company, which suspended its dividend and furloughed most store associates last month, in February agreed to sell a controlling stake in Victoria's Secret to private equity firm Sycamore Partners.
Kohl's (KSS) - Get Report entered a credit agreement with Wells Fargo Bank for a $1.5 billion senior-secured, asset-based revolving credit facility. The company said in a regulatory filing that said the new credit agreement is intended to provide Kohl’s with financial flexibility.
Nordstrom (JWN) - Get Report shares were also climbing. On Thursday the Seattle high-end retailier said it had amended its $800 million revolving line of credit and closed an 8.75% secured debt offering of $600 million.
"These actions provide additional liquidity and flexibility in response to uncertainty related to the novel coronavirus," the company said.
Last week during a conference call, incoming Chief Executive Sonia Syngal said that "while the full impact and the duration of the outbreak is unknown, we are better positioned than most in our space to navigate the uncertainty ahead.
"One, we have healthy free cash flow generation and nearly $1.7 billion of cash on hand at year-end," Syngal said, according to a transcript of the call. "Two, we have a longstanding large-scale vendor relationship network that supports us; and three, we are well prepared to be prudent with the other levers of our business, including expense and inventory management, as well as capital spending."
Stichter also lifted her price target on TJX, owner of the T.J. Maxx, Marshalls and Home Goods chains, 30% to $60 a share from $46, saying that "TJX's recession-resistant model is a winner in the current environment."
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