NEW YORK (TheStreet) -- Shares of Macy's, (M) Kohl's (KSS) and Nordstrom (JWN) were all surging in mid-morning trading on Thursday, the day that each of them reports 2016 third quarter results. Macy's and Kohl's reported results before today's opening bell, while Nordstrom reports after the market close.
Investors should be looking at guidance for these results because retailers are working in a "very, very competitive and tough environment," Recon Capital Partners CIO Kevin Kelly said on Fox Business' "Mornings With Maria" on Thursday. Foot traffic is down and margins are contracting.
"They've had a good year and year-to-date in regards to returns because they were so heavily beaten last year. But it is really bad right now," he said. That's why investors need to just focus on what the companies say going forward.
However, if the current market rally and current corresponding sentiment continues, then people might feel richer and spend more money, Fox Business' Maria Bartiromo noted.
If that happens, then certain stores like Macy's can "easily beat" their comps, Kelly said. "So that's why we're focused on the guidance and what managements say. So don't focus on the past. Listen to what they're going to guide to."
Another performance metric to consider is how a store is doing on its e-commerce platform, Kelly noted. "Because think about this. Amazon.com (AMZN) is now the world's largest retailer so we need to focus on what they're going to say to combat these threats."