The majority of retailers blew away lowered estimates Thursday morning, helping the market move higher at the open (before it pulled back in the lead-up to the stress tests being revealed). Three retailers that tell the story are listed below with my analysis of each stock.
- Wal-Mart (NYSE:WMT): +5% vs. +2.9%. Stock has struggle to get out of its own way recently after it gained 18% in 2008 and was one of the best performers in the market. WMT was down 11% heading into Thursday for the year, but was poised to open higher on the better than expected number. During the height of the recession WMT was the place to shop, it is now clear shoppers are moving on up again and leaving Wal-Mart behind. The stock is not a bad value play at current levels, but investors should be looking at more growth, high-end retailers.
- Aeropostale (NYSE:ARO): +20% vs. +9%. Stock has been on a tear recently and high a new intraday high on Wednesday before closing down 4%. A rally of over 180% since the low in December has the stock as one of the best performing retailers. The attractive price-point the company offers along with the fact parents are willing to curtail their spending for their teens has helped ARO continue with brisk sales. Buying the stock here is a reach due to the recent rally; a pullback must occur before I consider the stock a buy.
- Buckle (NYSE:BKE): +18.2% vs. +11.3%. The Buckle has been one of my favorite retailers for a long time because they have attractive price points along with a heavy reliance on denim. The numbers from denim giant True Religion (NASDAQ:TRLG) Wednesday highlighted that sales of jeans continued right through a major recession. If you are able to get into BKE near $35 it would be a time to start buying.