10 January 2019 by jbchevrel
Retailers notably underperformed US IG CDS in today’s session. Macy’s Inc (FD) CDS widened c40bp after they cut their annual profit and sales forecasts, announcing that sales slowed in the key pre-Christmas period of mid-December. EPS expected range was downwardly revised to $3.95-4.00 per share, vs previously $4.10-4.30. In parallel, A one-off development was a fire in its West Virginia distribution centre. But beyond that, underperformance in sectors such as fashion and jewellery point to bad Christmas sales. In the same sector, FD’s peer Kohl’s Corp (KSS) widened 13bp, after its holiday sales growth of 1.2% disappointed. The latter has to be compared with a c7% comp sales growth last year. The Christmas period seems to have been a tough test for the retail sector, as online shops makes competition fierce.