Customers quit an Abercrombie & Fitch store in San Francisco, California.
David Paul Morris | Bloomberg | Getty Images
The retailers take a beaten Wednesday, are harmed by a handful of poor earnings reports and the threatening threat of tariffs on clothing imported from China.
Canada Goose shares lost more than a quarter of the value after the company Sales growth over the next three years will not be as robust as before. Abercrombie & Fitch shares were down nearly 25% as momentum cooled down on its Hollister brand over the last quarter. That news also sent shares of rival teenager American Eagle down about 5%. And Michael Kors owns Capri Holdings' stock fell about 1
"This is not a place that is considered very healthy in terms of long-term prospects for investors," said well Fargo retail analyst Ike Boruchow. "You have a group where the basics are weaker."
Then you throw in the idea of 25% tariffs on clothing and shoes, as the White House has suggested in its ongoing trade crisis with China, "and there is a real earnings problem," he said.
Abercrombie CFO Scott Lipesky told analysts at A conference call after earnings. The dealer has not yet baked further rates in the earnings outlook. Abercrombie imported about 25% of his trademark receipts from China to the US in fiscal 2018. "We are still working in the hypothetical world here," he said. very involved with our sourcing partners. … We have a playbook in place if the hypothetical becomes reality. "
With all the losses in the room, the S & P 500 Retail ETF (XRT) was down almost 3% on Wednesday afternoon, in line with the fifth consecutive day of decline for the first time since November 20. This also makes an eight-day long tape strip for the XRT and puts it on pace for its worst day since May 13, when it lost 3.76%.
Boruchow said it is less signs that consumers are withdrawing, but more that "parts of the industry" are weakening High-end bag makers are struggling as tourism falls off, for example, and some mall-based clothing retailers see sales slowly as more women choose to shop Platforms such as Stitch Fix and Rent Runway
Department store chains Kohl are, JC Penney and Nordstrom recently showed that they are not immune to these trends, either kicking a deal in the room just last week with their poor quarterly earnings reports.
Dick's Sporting Go ods was a bright spot on Wednesday morning, reporting tax results in the first quarter that topped Wall Street estimates and increasing prospects for the whole year. But its share price reversed the course from previous gains and was last down at more than 5% and coinciding with the rest of the industry.
When looking at the 20 worst executive shares among the S&P 500 years to date, a whole is seven dealers: Nordstrom shares are down 30%, the shares in Macy have fallen by 29.5%, shares in Walgreens have lost 25.3%, Kohl's share is 23%, share capital has fallen 21.6%, CVS shares are down 20% and the Gap shares have lost 19.3% so far this year.
– CNBCs Gina Francolla contributed to this reporting.