Are retailers good for a short-term trade if they continue to top low expectations?
Macy's reported a $59 million first-quarter loss Wednesday because of lower sales and the costs of consolidation, which the company said should start paying off next year. The results topped forecasts and sent shares nearly 4% higher.
Sales in the quarter were stronger in the Northeast and in Texas but weaker on the West Coast and in Florida. Womens' apparel continued to be a tough category, while men's products did better.
Meanwhile, Wal-Mart said on Tuesday that quarterly profit rose 7 percent as discounts drew in bargain-hunters, but issued a cautious outlook for the current period.
How do you trade it?
I think you get long Kohl’s and Nordstrom into their earnings reports which are Thursday after the bell, replies Jeff Macke. They should be better than apocalyptic and that should be good enough for a pop. But remember, it’s a trade not a long term buy.
If you go into Kohl’s, says Guy Adami, I’d make sure to be out by Friday.
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Trader disclosure: On May 14, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (MSFT), (INTC), (WMT), (EMC), (DIS); Pete Najarian Owns (AAPL), (BKC), (ENER), (TSO), (XLF); Pete Najarian Owns (C) Calls, (MSFT) Calls, (YHOO) Calls; Finerman Owns (GS); Finerman's Firm Owns (JCP), (MSFT), (SUN), (TSO), (VLO), (AEO), (PLCE); Finerman's Firm Owns (YHOO) Puts And Call Spreads; Finerman's Firm Owns (C) And (C) Leaps; GE Is The Parent Company Of CNBC; NBC Universal Is The Parent Company Of CNBC; Charles Schwab Is A Sponsor Of "Fast Money"