Retail reckoning see online sellers crushed while Walmart hangs tough

Jun. 16, 2022 2:35 PM ETWalmart Inc. (WMT)FVRR, CHWY, POSH, OSTK, DTC, MELI, SFT, TGT, BABA, RVLV, CVNA, ETSY, W, FTCH, BOXD, EBAY, JD, CPNG, AMZN, COST, IBUY, XRTBy: Clark Schultz, SA News Editor35 Comments

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Internet retail stocks were particularly hard hit on Thursday as investors continued to digest the previous day's Federal Reserve decision, which saw the central bank announce its largest rate hike in over a quarter century.

The word of the day in the retail sector is recession, which if it occurs could send 2023 sales estimates for online retailers much lower. Higher gas prices and the Federal Reserve's forecast for higher unemployment are seen as potential spending drags. Analysts have also noted that the quick pace of interest rates hikes raise the odds for an impact on second-half results and resets the thinking on valuation and discounted cash flow multiples.

Carvana (CVNA), Revolve Group (RVLV), Fiverr International (FVRR), Etsy (ETSY), Shift Technologies (SFT), Wayfair (W), Farfetch (FTCH), Boxed (BOXD), MercadoLibre (MELI) all fell more than 8%. Solo Brands (DTC), Overstock.com (OSTK), eBay (EBAY), Poshmark (POSH), JD.com (JD), Chewy (CHWY), and Coupang (CPNG) all dropped as well.

Online retail giants Amazon (AMZN) -5.03% and Alibaba (BABA) -6.65% were also in reverse.

Target (TGT) -3.39% and Costco (COST) -1.76% also fell on Wednesday, but Walmart (NYSE:WMT) +1.05% is an outlier with investors betting on a positive trading-down effect for the Bentonville beast.

The Amplify Online Retail ETF (IBUY) fell 6.55% and the SPDR S&P Retail ETF (XRT) was off 5.21% compared to the 3.63% drop for the Dow Jones Industrial Average and 4.50% decline for the Nasdaq. Read the latest update on the broad market.

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