Retail Stocks Soar

The two “hottest” IBD industry groups to end 2021 were retail department stores and consumer electronics retailers. The six-stock retail department store group collectively rallied 136% in 2021, earning the most gains among the 197 industry groups tracked by IBD. Consumer electronics retailers, a five-stock group, was up 107%. In addition, jewelry retailers gained 81% in 2021. Data Investors Business Daily

Retail Sales and Earnings

Investors and fund managers bought shares of Macys (M), Bed Bath and Beyond (BBBY), Kohls (KSS), Dillards (DDS), Dicks Sporting Goods (DKS), and Best Buy (BBY) on Monday. We’ve adding these stocks to our watchlist.

Click to enlarge charts.

Department stores like Macy’s (M), Dillard’s (DDS) and Kohl’s (KSS) all posted better-than-expected earnings for the holiday shopping season.

Macy’s printed a double bottom pattern, popping on above average volume on Monday when the S&P500 was trading markedly lower in the morning session. When the indices found buyers, Macy’s soared 18% on above average volume (+152%).

Macy’s topped estimates whith robust sales in Q3 to end 2021. Earnings growth accelerated $1.23 per share, vs. views for 31 cents. 

Management an increase in sales of 36%, posting $5.44 billion vs. estimates for $5.2 billion. Same-store sales also increased to 37.2%. Online sales climbed 19% vs. the same period on 2020, surging 49% vs. the same period in 2019.

As a result, Macy’s management expects net sales of $24.12 billion-$24.28 billion vs. prior guidance of $23.55 billion-$23.95 billion. 

Consumer electronics retailers Best Buy (BBY) and Conn’s (CONN) reportedly saw spending increases on home-office and home-improvement renovations. Conn’s for example gained more than 100% in 2021. At the same time,

Signet (SIG) Jewelry tallied robust sales to end the 2021 shopping season.

Retail Department Stores

Dillard’s handily beat estimates for the third quarter, finishing off 2021 with earnings of 586%, highlighted by an increase in revenue of 434%, while posting a huge increase (48%) in same-store sales.

Technically speaking, the stock surged (+14.73%) on Monday, while attempting a break out from a flat base on above average volume of (+77%).

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Happy Trading,

Vinny

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