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Apparel retailers are being whacked



Customers leave an Abercrombie & Fitch store in San Francisco, California.

David Paul Morris | Bloomberg | Getty Images

Retail stores take an evening Wednesday, hit by a handful of bad earnings reports and the threatening threat of tariffs on clothing imported from China.

Canada Goose shares lost more than a quarter of their value after the company's revenue growth over the next three years will not be as robust as before. The Abercrombie & Fitch shares were down to almost 25% as the momentum cools on its Hollister brand over the last quarter. The news also sent shares of rival teenager American Eagle down about 5%. And Michael Kors owns Capri Holdings' stock fell by about 1

0% as it suffers from a poor demand for his handbags.

"This is not a room considered to be very healthy in terms of long-term prospects for investors," said Wells Fargo retail analyst Ike Boruchow. "You have a group where the foundation is weakened."

Then you throw the thought of 25% tariffs on clothing and footwear proposed by the White House in its ongoing trade war with China, "and it's a real profit problem," he said.

Abercrombie CFO Scott Lipesky told analysts on a conference call after the earnings, the retailer has not yet added additional rates to his earnings prospects. Abercrombie imported about 25% of its commodity revenue from China to the US in fiscal policy 2018. "We are still working in the hypothetical world here," he said. "We remain very committed with our sourcing partners. … We have a playbook in place if the hypothetical becomes reality."

With all losses in space, the S & P 500 Retail ETF (XRT) was down almost 3% in Wednesday afternoon, in line with the fifth consecutive day, with decreases for the first time since November 20. This also makes an eight-day lost stripe for XRT and puts it on pace for its worst day since May 13, when it lost 3.76%.

Boruchow said there are fewer signs that consumers are withdrawing, but more that "parts of the industry" are weakening. High-end handbag makers are struggling, for example, tourism falling out, and some shopping mall stores are selling slowly as more women choose to shop on platforms like Stitch Fix and Rent the Runway.

The department store chain Kohl & # 39; s, JC Penney and Nordstrom recently showed that they are not immune to these trends either by rejecting sales in space last week with their poor quarterly earnings reports.

Dick's Sports Goods was a bright spot on Wednesday morning, reporting fiscal first-quarter earnings, peaking Wall Street estimates and increasing its outlook for the entire year. But its share reversed the course from previous gains and was last down at more than 5%, which coincided with the rest of the industry.

On the 20 worst results during the S & P 500 years so far, a lot of seven retailers: Nordstrom shares have fallen by 30%, Macy's shares have fallen 29.5%, Walgreens shares have lost 25 , 3%, Kohl's share capital has fallen by 23%, Foot Locker's shares have fallen 21.6%, CVS shares have fallen 20% and Gap shares have lost 19.3% so far this year.

– CNBCs Gina Francolla contributed to this reporting.


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