Daily Gains Letter

Retail Sector

The U.S. retail sector is that segment of the U.S. economy related to consumer purchases at the retail level. In the simplest form, the retail sector consists of Americans buying goods and services at retail establishments, or stores. The retail sector accounts for about 10% of U.S. gross domestic product (GDP).

Muted Retail Growth to Move Higher? How to Play the Sector Minus Risk

Retail Growth to Move HigherRetailers continue to fight for the limited dollar of the consumer. The retail sector is extremely competitive and success is contingent on the right strategy of attack, which means offering the right product mix, competitive pricing, and in the ultra-competitive apparel sector, it means keeping on top of the trends and consumer sentiment. A good product today could be passé a year from now, as consumer sentiment changes rapidly.

Why Target Failed in Its Canadian Expansion

Target Corporation (NYSE/TGT) beat Wall Street estimates on Wednesday, despite recording a massive $5.1-billion charge after deciding to exit Canada in what has to be one of the biggest blunders in retail his ... Read More

My Early Black Friday Retail Sector Outlook

Early Black Friday Retail Sector OutlookRetailers will be getting the aisles set to go when the big—and at-times legendary—Black Friday begins in four days’ time. This is the most important day of the year for the retail sector: it could be the difference between having a good year or a marginal one. I have heard some retail pundits say this Friday could generate as much as 30% of the total year’s sales—on just this one day. Why “Black” Friday? The “black” refers to the fact that it could potentially turn a year of losses into a year of profits based on this day’s sales. This is why the retail sector is pumped to go. We have already heard about an early start to Black Friday with some re ... Read More

Darker Clouds Ahead for Retail Space…But Not for Retail Investors

Muted Retail SectorThis past week, as many of my readers may recall, I discussed the slowing that’s occurring in the global economy as demonstrated by consumer spending at both McDonalds Corporation (NYSE/MCD) and Wal-Mart Stores Inc. (NYSE/WMT). Now, my concerns have just picked up following Wednesday’s retail sales reading. The core reading excluding automotive and food sales grew a mere 0.1% in July, according to the U.S. Department of Commerce, which was below the 0.3% estimate and the weakest reading since way back in January, when Old Man Winter was blamed for everything. But with the winter excuses over, it still appears consumers are hesitant on wanting to spend. Not only is consumer spending on everyday items dryin ... Read More

Shift in Consumer Spending Habits Sure to Reward This Stock

How a Few Clicks Could Reward This Company BigThere was a time in the past when Wal-Mart Stores, Inc. (NYSE/WMT) was the top retail stock for investors and the go-to place to find a bargain. I used to refer to the retailer as the “Death Star” of the retail sector, killing off smaller rivals via its expansion. But as my stock analysis points out, that was yesterday. The shopping environment is much more competitive now; it’s almost akin to a bowl of piranhas, where there are multiple retailers vying to snap up fewer consumer dollars. According to my stock analysis, Wal-Mart doesn’t only have the big-box stores like Costco ... Read More

A Compelling Case for This Retail Discounter

While Others Flee This Discounter, It Tops My ListThere is a lot of hurt out there in the retail sector as consumers have yet to come back in full force. The soft consumer sentiment has impacted retailers across the board, from the specialty retailers to department stores. Even the discount and big-box stores, which are pretty resilient when spending declines, are hurting at the register. Consequently, we saw a consolidation in the discount sector after Dollar Tree, Inc. (NASDAQ/DLTR) decided to snap up rival Family Dollar Stores, Inc. (NYSE/FDO) in a cash and stock deal valued at $8.5 billion, or about $74.00 per share. I last talked about picking up a company like Family Dollar Stores in April as ... Read More