American Retailer Earnings Highlights
All figures below are in US dollars.
- Nordstrom (JWN/NYSE): Earnings per share were $0.33 (vs. $0.22 forecast) and revenue was $3.46 billion (vs. $3.35 billion forecast).
- Urban Outfitters (URBN/NYSE): Earnings per share at $1.10 (vs. $0.85 forecast) and posted revenue of $1.18 billion (vs. $1.16 billion estimate).
- Abercrombie & Fitch (ANF/NYSE): Earnings per share $2.50 (vs. $2.30 forecast) and posted revenue of $1.21 billion (vs. $1.19 billion estimate).
Another solid quarter for U.S. consumer spending on apparel was overshadowed by the proven fact that Macy’s needed to delay its earnings release as a result of the revelation of a… massive fraud Output. A single worker has reportedly stolen greater than $130 million from the corporate lately. For comparison, this amount is nearly equal to the shop’s total profit for the complete last quarter.
Macy’s is hoping that the nostalgia of the Thanksgiving parade will soon transform the network – from the embarrassing lack of management control to the proven fact that the stock suffered a 4% decline on the news.
Profit increases triggered a muted market response for the opposite three clothing retailers. Much of the excellent news appears to have been incorporated into prices in the shape of high expectations. Abercrombie & Fitch continues to “rise from the dead” (on this case, “the dead” being clothing brands from my teenage years), up greater than 90% within the last twelve months.
All three firms commented on the strength of the U.S. consumer market and increased freight rates resulting from port strikes earlier within the fiscal quarter.
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What!? I, are you nervous?
Back within the bad old days (not the nice old days) in June 2022, shortly after I began writing this column, I wrote about how I used to be pretty bullish on the direction of the stock market. This was based on how exaggerated the market commentators appeared to be. I are likely to think: If everyone already thinks the sky is falling, how much worse can it get?
The opposite appears to be the case today. “It feels like the election was a spark that seems to have raised spirits,” Ben Carlson said recently wrote. “Excitement is in the air again for investors.” It seems as if many consider that the sky won’t ever fall again.
What are animal spirits?
“Animal Spirits” is a term utilized by economist John Maynard Keynes to clarify irrational investor behavior. Traditional economics views people as rational beings who act logically based on facts. However, in real life, investors often act based on emotions, rumors, or gut feelings. Keynes attributes this behavior to the proven fact that humans have “animal spirits.”
Carlson needs to be an authority on one of these investor sentiment as he has a 400 episode podcast actually called. And to prove his point, Carlson cites probably the most recent record since 2008 for the sum of money poured into the stock market:
Many of the world’s largest investment banks participated. They forecast moderately positive returns next yr (the S&P 500 is currently around 6,000).
Preliminary summary of Wall Street S&P 500 2025 year-end targets: 6,000: Jefferies 6,400: UBS 6,500: Morgan Stanley, Goldman Sachs 6,586: CFRA 6,600: RBC, Barclays 6,700: BMO 6,500-6,700: Wells Fargo Inv Institute 7,000: Yardeni, CapEcon, Deutsche Bank
— Sam Ro (@samro.bsky.social) November 25, 2024 at 12:05 p.m
There is little doubt that the Republicans’ likely changes – including tax cuts, promised regulatory changes, AI speculation and straightforward momentum-based investor psychology – have turned the “vibecession” right into a sentiment rally or boom. (We’re still determining what to call it when the economy’s sentiment overwhelms its data.)
