Despite the fact that the retail sector enjoyed its best holiday shopping season since 2006 in November and December of 2010, many retail stocks fell today. The reason behind the drop was that many stores’ December sales missed analysts’ expectations. Stores like Gap Inc (NYSE: GPS) which announced today that their sales in December were flat compared to those in December 2009, Target Corp (NYSE: TGT), whose sales grew only 1.4 percent over 2009’s, and Macy’s Inc (NYSE: M), whose sales were up 4.5 percent but still missed analysts’ expectations. As a result, GPS fell 6.88 percent, TGT dropped 6.8 percent, and M fell 4 percent.
Not all retail stocks were down today though. American Eagle Outfitters Incorporated (NYSE: AEO) gained 4.01 percent (after some intense option trading) even after announcing that sales in December 2010 fell 6 percent compared to the year before and Aeropostale Inc (NYSE: ARO) rose 4.07 percent when it announced a 3 percent increase in December sales, year-over-year. For a really comprehensive breakdown of retail sales and YoY comparisons, visit the RetailSails blog.
Covestor models active in the retail sector: Precedent-Based, Abandon Stock, Long-Short Generalist, Diversified Buybacks, Rule #1.
*Prices courtesy of Yahoo Finance, chart courtesy of Google Finance.
