Call it a pre-winter meltdown.
The bout of unseasonably warm weather has melted shares of retailers this week — just as many are set to report earnings. Shares of Macy's, Kohl's and Nordstrom are down roughly 4 percent in the last two sessions, and some traders warn that the bloodbath could continue heading into the end of the year.
Seaburg expects the big department stores to not only disappoint on earnings later this week, but also provide weak guidance, which will send the stocks into a downward spiral. "Department stores have an inventory issue, and mall traffic is down," Cowen & Co.'s head of sales trading said. "We're looking at a scenario where these stocks will sell off on earnings, sell off on guidance and stay low for a relatively long period of time."