Every stock in the mall is getting obliterated on Tariff headlines and slow spending. Finding dips to buy and places to hide.
We wanted clues as to how consumer stocks were going to handle the News when reporting earnings over the next couple weeks and, for the most part, the answer seemed to be "poorly", at least when it came to the Big Box names which continue to be plagued by Tariff headlines and ambivalent customers.
As more or less anticipated, Target and Best Buy posted ok numbers and guided cautiously (see: "Beat and Guide Lower" from earlier this week). On which is the only name of the three I own turned in a glorious quarter and outlook (sees ~35% Q1 growth!) but was only rewarded with a rather anemic bounce:
What Did We Learn:
The risk is still to the downside. ONON could have bounced higher. In fact, it really should have gotten a bigger bump from today's report, which was about perfect. Best Buy arguably could have seen a gain on slightly better than expected news and Target hasn't seemed this lost in years but not in a surprisingly way. The net result was negative returns on the collective as the tape still can't get out of its own way.
Tomorrow sees Abercrombie and FootLocker in the morning. I expect ANF to be impressive but shares to fall almost no matter what they say.
The consumer is still stepping up for what they really want. ONON margins were over 60% (a record high) with huge growth. Look for that to be a bright light for FootLocker in the morning during what should be an otherwise dismal report.
Gap is Thursday. I've got some ideas in the number but we'll talk about that in the morning.
