Retail Stocks Continue Their Losing Streak

U.S. retail investors are having a rough week.

Macy’s (ticker: M) and Kohl’s Corp. (KSS) and Nordstrom (JWN) all reported first-quarter earnings on Thursday that fell short of particularly low market expectations. And retailer JCPenney Co. (JCP) followed up Friday morning with another earnings miss, sending that company’s stock plummeting 9 percent in early trading.

Macy’s stock took a huge hit on Thursday, plummeting more than 15 percent after the company reported adjusted earnings per share of 24 cents on revenue of $5.34 billion. The numbers fell short of consensus analyst expectations of 35 cents in EPS and $5.47 billion in revenue.

After previously announcing plans to close 100 more store locations this year, Macy’s reported a 39 percent drop in profits in the first quarter. The company is currently in the process of shifting its business model more in line with off-price retailers such as Ross Stores (ROST) and TJX Companies (TJX).

For investors, GlobalData Retail managing director Neil Saunders says the Macy’s turnaround effort is “not a venture for the faint of heart.”

Kohl’s actually beat Wall Street’s earnings expectations by reporting EPS of 39 cents compared to consensus estimates of 29 cents per share. However, revenue of $3.84 billion and a same-store sales decline of 2.7 percent on the quarter came up short of analyst forecasts. Wall Street was anticipating $3.9 billion in revenue and a same-store sales decline of only 1.2 percent. Kohl’s stock traded down more than 6 percent on the news.

The rest of the U.S. retail sector is trading…

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