Stock prices ripping to all-time highs and improved reads on the health of the U.S. consumer have sent investors back to some bloodied retail stocks.
Can one blame investors for searching in the retail stock bargain bin of late?
Retail sales in June rose 0.6% after gaining 0.2% in May, marking the third consecutive month of increases. Excluding automobiles, gasoline, building materials and food services -- otherwise known as "core " retail sales -- sales gained 0.5% last month after a similar increase in May.
Meanwhile, May's consumer credit report showed revolving credit outstanding, notably credit cards, rose at a 2.97% annual pace. That brought revolving credit outstanding to its highest level since mid-2009. April showed a solid 1.7% increase April.
With the backdrop of this better data on consumer spending, the market is likely wagering the pivotal back to school and holiday shopping seasons for retailers will be stronger than anticipated. TheStreet takes a brief look at which retailers have gained the most attention by Wall Street over the past month.
Remember John Doe investor: Nordstrom has really been struggling.
1. Nordstrom (JWN)
Share price performance past month: +9.1% vs. +4% S&P 500
Surging stock prices may send rich folks back into Nordstrom for a new handbag or pair of shoes, in the eyes of the market. But investors may want to keep in mind how awful Nordstrom has been performing -- despite lofty levels for stock prices -- due to the shift to online shopping, few must-have apparel fashions in recent quarters and exec missteps.
The high-end department store delivered a stunning first-quarter earnings miss and ugly guidance reduction. First-quarter earnings of 26 cents a share trailed forecasts for 46 cents a share. Sales tallied $3.19 billion compared to estimates for $3.28 billion. Comparable-store sales fell 1.7%. For the year, Nordstrom slashed its earnings guidance to $2.50 to $2.70 cents a share, down from $3.10 to $3.65 a share previously.
On the positive side, things can't get any worse, right?
Target shoppers smiling again?
2. Target (TGT)
Share price performance past month: +8.2% vs. +4% S&P 500
Solid retail sales and consumer credit trends are likely spurring optimism that Target has bounced back from a weak start to the second quarter. Target said back in May that second-quarter sales may drop as much as 2% from the prior year due mostly to tepid consumer spending post Easter. Second quarter earnings were seen in a range of $1 to $1.20 a share, compared with Wall Street estimates at the time of $1.19.
Large changes could be coming to Macy's in 2017.
3. Macy's (M)
Share price performance past month: +6.2% vs. +4% S&P 500
In addition to surging stock prices and more optimistic data on U.S. shoppers, investors may also be liking Macy's decision to input a new CEO.
Amid a prolonged stretch of sluggish sales, Macy's announced in June that its president, Jeff Gennette, who has spent 33 years at the company, will assume the role of CEO in the first quarter of 2017. Gennette was previously elevated to president in 2014. Gennette will take the baton from longtime Macy's chief Terry Lundgren, who helped create the modern-day Macy's and has been its CEO since 2004. Lundgren will continue to serve as executive chairman.
Investors appear hopeful Gennette will move more quickly to monetize Macy's lucrative real estate, modernize stores and shutter under-performing locations. But investors shouldn't expect anything drastic just yet.
"We are not yet ready to announce big changes because the strategy that Terry [Lundgren] laid out in terms of mobile, omnichannel and improving our in-store experience are all things that still apply today," Gennette told TheStreet in an interview after his appointment, adding, "We just have to continue to improve on them and also look at big opportunities to address the secular changes."