The Market Vectors®Retail ETF (RTH) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors US Listed Retail 25 Index (MVRTHTR). The Index is a rules-based index intended to track the overall performance of 25 of the largest U.S. listed, publicly traded retail companies.
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Margin declines at retailers are all the rage (I, II) as discounting keeps accelerating with savvy consumers waiting for the best deals. Latest analyst margin estimate cuts: GPS 32.7% from 38.2%, JCP 36.7% from 38.2%, M 41% from 41.3%, ANF 60.1% from 63.6%.
A group of retailers protest the conclusions of a credit card study sponsored - not coincidentally - by credit card giants such as Mastercard (MC), Visa (V), and American Express (AXP). Though the data from the credit card outfit claims stores are pocketing the difference from paying less in interchange fees to the tune of $825M since Oct. 1 and on pace for $8B in savings this year, the Merchants Payments Coalition isn't buying it. "Calling this research amateurish would be an insult to amateurs."
Retail shares fall just days before Black Friday, as weak consumer spending data puts the kabosh on optimism for a holiday spending spree: Nordstrom (JWN -1.9%), Target (TGT -1.9%), Best Buy (BBY -1.8%) and Macy's (M -2.4%).
Amazon (AMZN -2.6%) pressures retailers for market share due to its competitive price advantages, a report by William Blair found. The firm has an average 11% price discount on each item, and even higher for online bulk sales. Retailers rated at above-average risk for share loss: HGG, BBY, BBBY, TGT, DKS, KSS, PETS
Genesco (GCO +8.7%) holds on to gains after reporting the $240M acquisition of U.K.-based Schuh Group - a specialty retailer of casual and athletic footwear. The purchase gives Genesco an immediate presence in Europe, as well as a boost to FY11 earnings.
Phillips-Van Heusen (PVH) boosts its Q2 earnings view on strong May sales in its Calvin Klein and Tommy Hilfiger units. Both Q2 and FY11 earnings are expected to be at the high end of their already upbeat range. Shares +0.5% premarket.
Sears' (SHLD -2%) debt moves another notch deeper into junk as Fitch downgrades to B from B+, citing concerns over the sharp decline in profitability, and an inability to turn operations around. Both Sears and Kmart stores continue to lose market share to their peers.
PetSmart (PETM) announces a $450M share repurchase and increases its dividend to 14.5 cents. “We believe the stability and predictability of our cash flow demonstrates the continued strength of our business,” says CEO Bob Moran, "creating shareholder value remains a priority." Shares flat AH.
Tuesday Morning (TUES -14%) slides after lowering its FY outlook for the second time this year due disappointing sales. CEO Kathleen Mason blames the usual suspects: inflation, the weak housing market, and a pullback in discretionary spending.
Nordstrom (JWN +3.8%) gets a lift from better-than-expected May retail sales and a buy initiation from Dorthy Lakner at Caris & Co. Citing efforts to increase its presence in designer goods, Lakner says the company should "benefit from the ramp-up in spending from affluent customers."
Polo Ralph Lauren (RL -9.2%) sinks to the bottom of the S&P after reporting its disappointing quarter and big jump in inventories, raising concerns about future markdowns. Costco (COST -1.1%) is lower after taking a $49M accounting charge related to rising prices. Retailers and apparel companies (RTH -0.3%) perk up but continue to lag.
Economists estimate that growth in retail sales slowed to 0.5% in March from 1% in February, indicating that higher costs for fuel and food are restraining consumer spending. The figures, from the Commerce Department, are due out in ten minutes.
Tiffany's (TIF) strong Q4 bodes well for sellers of luxury goods. Gross margin rose more than two points to 60.9%, "with the increase primarily reflecting the recapture of higher product costs through retail price increases." Ex-forex fluctuations, worldwide sales surged 12%, and comps were up 8%. TIF +5% premarket. (PR)