Our Experts Comment the Times Series

See All the Comments

Retail Hurts

15 May 2017 by lberuti

Most of the earning season is now behind us on both side of the Atlantic. In the US, more than 90% of the S&P companies have now reported their Q1 results It has been a bright reporting season so far with 75% of companies beating analysts’ mean EPS estimates and 64% beating the mean sales estimate. The retail sector has not fared that well though. When most US retailers reported last week – a few are stll due like GPS ( Gap Inc ) on Thursday -, they all appear to suffer one way or another from slower foot traffic on online shopping. Over the last 5 trading sessions, in an otherwise fairly stable credit market - CDXIG is 1bp tighter at 62bps and CDX HY 5bps tighter at 324bps -, they have been the worst performing group and all without exception saw their risk premium increase. To name a few, M’s ( Macy’s Inc ) 5-year CDS traded 42.5bps wider at 272.5bps, JCP’s (J C Penney Company, Inc) 109bps wider at 880bps, JWN’s (Nordstrom, Inc) 19.5bps wider at 163.5bps, KSS’s (Kohl’s Corporation) 11bps wider at 238bps and GPS’s 11.5wider at 272.5bps.