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Retail: Big Price Divergence Week     

Footwear (down), Discount stores (up) swapping places. Apparel still quietly ebbing and flowing. There’s your greatest near-term risk.

Some notable callouts from our Stock Divergence Monitor today…

  1. Footwear Retail is the clear loser – pretty much across the board – as we see companies coming in with weakness on the margin line of the P&L. Note that Timberland (TBL) is one of the big losers from a brand perspective, which definitely did not help the retail side.
  2. On the flip side, we’ve got the discount stores start to show signs of life. For the first  time in weeks, Target was not the Underperformer in that space – but rather Wal-Mart that graciously stepped in to fill the void. We still don’t like either.
  3. The key space that has yet to crack is Apparel Brands/Retail/Department stores. Simply put, people want to believe…and will not think otherwise until they see some ugly press releases that tell them to remove the blinders. That’s your greatest risk in both earnings and stock prices heading into May/June.

Retail: Big Price Divergence Week     - 212