We have noticed this trend for quite a while here, but Walmart (WMT) is taking away more and more US business as consumers go into a death spiral [Jan 15: Will There Be Anywhere Left to Shop in 2010?]. But nevermind that, the stock market is up, because this is a backward looking number and in 6 months everything will be fine… we continue to whistle past the graveyard. Remember, Walmart is turning into a de facto grocery store so as inflation ramps up in food, just by selling the same amount of units their same store sales will increase…

As expected, Walmart solid, Costco (COST) doing fine on bulk purchases and a lot of gasoline sold and everyone else taking it on the chin… some scary numbers out there especially in apparel (one of the easiest things to cut back on – it is non essential to add more clothing). Target (TGT) is also alarming because it’s where the middle class usually shopped, but alarming drops there as well, considering it’s size. Abercrombie & Fitch (ANF) is my bellweather for discretionary teen spending and even they had -10% same store sales. Kohl’s is another bellweather for me. Just ugly. I remain amazed I still hear people denying there is a recession… hope is all powerful.

Some of the ugly numbers, SSS = same store sales (all these missed analysts expectations by a country mile)
Target (TGT) -4.4% SSS
Gap (GPS) -18%
JCPenney (JCP) -12.3%
Abercrombie & Fitch (ANF) -10%
Kohls (KSS) -15.5%
American Eagle (AEO) -12%
Limited (LTD) -8%
Nordstrom (JWN) -9.1%
Saks (SKS) -2.9% <— short of analyst estimates but relatively speaking holding up!

The few winners aside from the few mentioned above are Aeropostale (ARO) +2.5% SSS, which is a “value” name for teen retailing and… well some drugstores.

The pooring of America continues as the middle class gets gutted by inflation, and lack of access to their house ATM. This was long predicted – now it’s starting to really show in the numbers. [Dec 8: Do the Bottom 80% of Americans Stand a Chance?] The fantasy of a “all clear” in 6 months continues by ivory tower set in NYC. More job losses coming as shops close and cut back staff, lower home prices coming, and more inflation as the Fed continues to print dollars to save NYC bankers. $3.75-$4.00 gas this summer….it will continue to worsen in 6 months. That’s the hilarity of this “rebound in 6 months” fallacy, albeit we might get a short uptick with the rebate checks. I continue to look for another “stimulus plan” to be announced before the next election – continuing our downward spiral of debt to pass onto our grandchildren…. anything to win votes.

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Last 5 posts by Trader Mark

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