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What Is the Impact of Rioting—if Any—on Retail Stocks?

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Across the country, thousands of peaceful protests—and some riots—have broken out in response to the killing of George Floyd at the hands of a police officer. 

Many people might be wondering whether the select cases of rioting and looting have had an impact on the stock prices of companies that had to close stores or reduce hours. So far, the answer is no, none at all.

However, that doesn’t mean the impact can’t become worse, should riots drastically increase or worsen, but for now investors have shrugged off the potential negatives.

Let’s observe the impact on companies:

Target  (TGT) - Get Free Report, Nike  (NKE) - Get Free Report, Apple  (AAPL) - Get Free Report and Walmart  (WMT) - Get Free Report all announced some store closures and/or reduced hours at some locations to comply with government curfews and protect employees from possible endangerment.

Between Friday, May 29 and Tuesday, June 2, Target shares fell 3.2%. Walmart shares fell 0.8%. Apple was largely flat. Nike rose 3%.

Target and Walmart shares fell because it was closing or reducing hours at hundreds of stores—200 for Target. That’s 10% of all of its stores, a fairly material development for Target sales, so the stock dipped a bit. But when the protests end, the company will likely open stores back up and in that case, it will only have lost revenue for a few days at some store locations. That would represent a minimal impact on quarterly sales and won’t impact longer-term projections. 

Still, "I think people are going try to figure out the impact the of the protests and riots on sales," Telsey Advisory Group analyst Joe Feldman told TheStreet.

With 10% of stores closed for two weeks, and accounting for the fact that urban stores generally see higher sales volumes than rural or suburban ones see, the sales impact would be in the low millions or hundreds of thousands, very minimal. But if they stay closed longer, the impact may be more meaningful.  

To learn more about the impact of riots on Apple and Nike, watch the video explainer above.

The major takeaway? Where the riots could impact these stocks is if they caused so much damage that consumer spending falls harder than currently expected—but recently, the economic data have trended well. 

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