Retail, Life and Musical Review
"The sun will come out tomorrow (maybe)"
- Saks (SKS): I've talked about it, pondered it, shopped the stores and met the CEO. Yet, somehow I'm still surprised in a good way by the numbers being posted by Saks. The company calls itself a Specialty Store but that does a disservice to the 37.5% comps the chain posted for May. Specialty stores do occasional 37.5% comps. Department stores, which Saks actually is, never put up those kind of figures.
What gives? Let's go to the Minyanville Mailbag! Wide Awake Minyan Little Suzanne writes:
"Ah, Jeff, perhaps this "Back By Demand" article will explain a few things:
Saks got smart. You never, never mess with little bitty women. One of the "I'm through with you, bubba" letters they got was from moi. And it wasn't sweet. I would not even visit the company's shoe department after it stopped selling petite sizes. (And that was a big sacrifice on my part.) Now, Saks has me back. Prolly Mrs. Jeff Macke and I share some of the responsibility for Saks' big numbers. ;-)
Thanks for all your great work on the 'Ville and Fast Money.
Thank you, Suzanne. I can't improve on a word of it.
- Jos A. Banks (JOSB): The stock is nearly fully recovered from a blow-up last June when the shares tumbled nearly 50% after a series of disappointments. I liked the company going into today's numbers but the real impressive trick and trade was by Prof. Red Katsenelson. Red wrote very favorably about the stock last August, when the rest of the world was busy hating Jos. A in a big way.
Red, meet my friend Suzanne. Suzanne, meet Red. You guys have both left me speechless with your insights. [Shaking my head with a wry, bemused, beguiled smile.]
- Costco (COST): Sure, there was a gas kicker for Cost. Big deal. The company put up great numbers in a blah month and they did it with their own special mix of basics with one-off fashion kickers. Someday this stock is going to break-out in a meaningful way. If it has the courtesy to give me a good entry point, I'll be along for the ride as a shareholder.
- Nordstrom (JWN): 11 straight months of beating comps. The stock is still consolidating gains. As a trade, it's likely dead-money. As an investment, I'm staying long.
- Wal-Mart (WMT): Missed because of apparel. IF (intentionally big IF) Wal-Mart is going to make apparel work, it is going to have to start by selling clothes to lower-middle income Mothers. May is Mother's Day month. Wal-Mart apparel remains very much a hypothetical notion, as far as being a business driver.
But so what, I still think the stock works higher.
- Macy's (M): Careful what you wish for. Macy's is finding that being the single biggest department store chain in the country isn't all wine, roses and solid comps. A few more months like this and the NYSE is going to go back to reserving the single M ticker for Microsoft (MSFT).
- Abercrombie and Fitch (ANF): It's Guess' (GES) world. ANF just lives in it, at this point. Ironically, if not for the shorts, the stock would be in the 60's.
Not a great month but nothing spectacular. I've been saying on both the Buzz and the Tee Vee that the consumer was more "blah" than "dead." May seemed to resume the net result of March and April: the good retailers are winning, the bad ones are flailing.
If you're looking to work a broader thesis about the rolling over shopper from these results you're going to have to go elsewhere for support. From where I'm sitting, the retailers are a trading zone sector between now and back to school in September. I'm not looking for continued momentum to the upside, even in the winners but the short-side is too crowded.
I've got cash in my pocket and will look to put it to work if/when I see deep discounts. Judging by today's tape, that moment may be coming in the next few weeks.
In other news...
If you read about my morning yesterday, you can guess my mindset for most of the day. Suffice it to say that I'm not much of a "thrower" of either tantrums or equipment yet, somehow, my coffee-ruined keyboard ended up hurled against my wall and was damply strewn at my feet with the instructions to "think about what it's done."
Of course, it's in several dozen pieces, so I'm not sure the lesson will do it much good.
In any event, I wrote the buzz, destroyed defenseless plastic then headed off to my 4-year old daughter's "graduation" ceremony. She's graduating from pre-pre-kindergarten to pre-kindergarten, making the event a dangerous place for a born cynic in a rage to be.
Then the kids lined up and started singing and dancing to a set of treacly Broadway songs and the strangest thing happened. "A Spoonful of Sugar," sung slightly off-key by a dozen not-quite-synched up voices, stopped my darkness dead in its tracks. I was literally gobsmacked, reduced to staring dumbly with my mouth open, moving only to return my little girl's smile and wave.
When they followed it up with a depression-era anthem (written in late 70's NYC about the Great Depression) "Tomorrow," my eyes started welling before the kids had bet their bottom dollar at the top of the song. By the big finish (arms flailing upward, shout singing "You're only a day awaaaaay" I was weeping like Adam Morrison.
Officially, I'm blaming the pollen count. It's off the charts out here, people, and I'm not used to the climate yet.
Those of you who aren't yet parents might actually even find that a plausible excuse.
No investment take-aways from the show. Just sharing a personal perspective check and giving a gentle suggestion to give your kids or a parents a hug, if you have the opportunity.
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