Wall Street Is Expecting The Worst Of The Retail Apocalypse This Week
The focus of earnings season shifts this week to brick-and-mortar retailers, with companies including Macy’s and Nordstrom set to announce first-quarter results. Analysts are not expecting to be impressed. “Of the 13 retail sub-industries in the S&P 500, just four have reported or are expected to report earnings growth for the first quarter,” John Butters, the senior earnings analyst at FactSet, said in a note on Friday. Roughly 3,500 brick-and-mortar retail stores are expected to close over the first half of 2017, and executives could announce more cost-cutting measures in their earnings results. Retail trade lost nearly 30,000 jobs from January through March, and the vast majority were in large department stores, according to the Bureau of Labor Statistics. The losses in February and March marked the worst two-month decline since November and December 2009. The subindustries leading forecasts for earnings growth in the first quarter are internet and direct-marketing retail and home improvement, Butters said. That’s not surprising. Warren Buffett put it aptly on Saturday when he said “the department store is online now.” The Berkshire Hathaway CEO also told shareholders at the annual meeting that he was “too dumb” to not invest in Amazon. Jeff Bezos, Amazon’s CEO, is “a different species,” Buffett added. Read more at Business Insider.
