Kohl's Corp. (KSS) turned in a rosy Friday sales report, but the stock was only up just more than 1% to $64.81 a share early Monday. It ended the day up 2.87%. Urban Outfitters, Inc. (URBN) shined Friday, but the stock was only up as much .08% to $36.19 a share Monday morning, before closing up 2.05%. Nordstrom, Inc. (JWN) also sold well, but only rose about 1% to $51.98 a share in the morning. It closed the day up 1.51%.
Still, these retailers are trailing e-commerce stocks. Much of the success for these retail clothing names came on the back of strong digital spending, which some might think would provide a significant boost to these stocks, but are actually powering e-commerce names like Amazon.com Inc. (AMZN) . Amazon rose 5.28% Monday to $1,581 a share. eBay Inc. (EBAY) jumped 1.27% to $28.82 a share. Wayfair Inc. (W) rose 3.54%9. Etsy Inc. (ETSY) popped 6.54%.
Some of these big retail names aren't getting traction in the market Monday because investors are scooping up digital-focused and e-commerce stocks that have fallen hard of late and could be ripe for buying, Zev Fima, Research Analyst for Jim Cramer's Action Alerts Plus said. The Nasdaq was leading the U.S. market higher Monday, as the tech-heavy index rose 2.06%. This is leaving investors' risk appetite to move to tech rather than to retail, Fima added. Amazon, for example, was trading at a trailing 12-months price-to-earnings ratio of roughly 140 before October sent the U.S. market way down, with heavy selling in tech. Now Amazon's PE ratio is 87.
Investors are wary of consumer discretionary stocks, especially retailers, as the economy is expected to slow down in 2019 meaningfully, which Goldman Sachs strategists pointed out in a recent note. Several retailers reported descent earnings reports, some of which beat expectations, but stocks in the sector came down, as investors feared weakness in 2019.
Kohl's online traffic was so strong that it had website issues.
"KSS was one of several retailers to experience website issues during the Thanksgiving/Black Friday time period, presumably from a significant increase in traffic," a team of Morgan Stanley analysts wrote in a note out to clients Monday. The analysts added, "CEO Michelle Gass noted Thanksgiving online sales hit a record, with 80% of online traffic coming from mobile devices." Kohl's sold 60 instapots and 40 fitbits each minute on Thanksgiving.
For Nordstrom, "Both Men's and Women's Footwear appeared to have strong foot traffic throughout the day," the Morgan Stanley analysts said.
"Urban Outfitters experienced the greatest year-over-year increase in line counts, more than doubling its traffic," the analysts said.
More broadly in retail, "industry sources point to eCommerce sales strength" as a reason for the big spend in the past few days, Morgan Stanley said. Online spending for Thanksgiving and Black Friday combined is estimated by Adobe Analytics to have grown 25% year-over-year to $9.9 billion. Last year's increase was 17%. Looking forward, 2018's Cyber Monday could see spending of more than $3 billion, for a more than 25% year-over-year increase, according to Mastercard Spending Pulse. "Our initial early numbers are showing that overall online retail sales this morning are in line with the season expectations and will likely set new records for this individual day," said a Mastercard SpendingPulse note.
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