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Dolce > Dick’s
As the old adage goes, "Nordstrom giveth and Dick's taketh away."
Shares of the former were higher Wednesday, after luxury shoppers helped the storied department store post an improbably solid quarter amid a broad retail malaise that's spared few.
I'll include language I've employed several times since Walmart and Target stunned investors last week. I'm spilling more ink on retailers' results this quarter because this is a critical juncture for consumer goods demand. In addition to the long aw
Look at 2 year (stack) growth in some retail categories for C2Q21. That is, category sales C2Q21 growth over C2Q19.
New cars +24%, used cars +29%, furniture +28%, electronics -1%, clothing -5%, shoe +3%, sporting goods +54%, dept stores -4%, warehouse clubs +15%, nonstore +62%, food services and drinking +5%.
Sporting goods was one of the best categories and DKS is the best sporting goods retailer, for F2Q21 its 2 year stack comp was +86%. Hard to comp well over “best”, specifically over a +86% 2 year stack comp.
On the other hand, comping well in the worst categories like clothing, shoe, dept store, food srvc/drinking categories should be more doable. Screen for a name in those categories that is below pre-pandemic price and is a fundamentally solid company, and it is probably worth working on.
(The electronics number puzzles me, as BBY’s 2 year stack comp was +32%.)
https://www.census.gov/retail/index.html using non seasonally adjusted
WSM also beat substantially, maintained guidance. Another data point for the higher income consumer’s insousciance. For now, anyway.
I amended this article to include Dick’s midday reversal, which was amusing. Management told analysts the guidedown was purely precautionary and wasn’t based on any actual signs of slowing demand. As Bloomberg put it, “the company didn’t explain how it calculated the new forecast if it isn’t based on current trends.”
Come October, Baxter’s report will probably be one word….”Damn!”