They might be shifting to the discount retailers, but consumers are still not dead. How should you trade?
U.S. retailers reported a mixed bag of May sales results on Thursday, with consumers focused on lower prices and essentials like food, but signs emerged that tax rebates were helping to spur some spending.
Wal-Martand Costco performed well, but I thought comps for the department stores were terrible, says Howard Davidowitz, Chairman Of Davidowitz and Associates.
Analysts also caution that once the stimulus funds are spent, longer-term issue like high consumer debt and soaring gasoline and food costs could still hurt sales.
Do you see any value plays?
Just yesterday I started buying J. Crew which I think has been unduly punished, replies Karen Finerman on CNBC’s Closing Bell. I think they have a great management team and their inventories are in good shape. I find the valuation attractive.
I still like Guess , adds Davidowitz, because of their tremendous international presence and Children’s Place because they got rid of the Disney stores.