On Thursday, all three U.S. indices closed at record highs. It was the first time since 1999 that all three posted record highs on the same day. This morning, those gains are getting trimmed as retail sales disappointed investors.
The S&P 500 is down by 4 points to 2,181, the Dow Jones Industrial Average is slipping by 42 points to 18,571 and the Nasdaq is off by 9 points to 5,219. The S&P Retail ETF is higher by 1 cent to $45.26.
The U.S. Census Bureau released July retail sales this morning, but they were lower than expectations and virtually unchanged from the previous month, while economists expected an increase of 0.4 percent. July’s sales were 2.3 percent above last year. Clothing sales fell 0.5 percent from June to July and were down 1.2 percent from July 2015. General merchandise stores fell 0.1 percent from June and 1.1 percent from last year. Department stores continue to bleed with sales falling 4.0 percent from last year.
Internet sales continue to explode with an increase of 14.1 percent over last year. Health and personal-care stores jumped 7.8 percent over last year. Restaurants are still commanding consumer dollars as those sales increased another 5 percent and Millennials are buying furniture as they age, with sales for home furnishings stores rising 4.3 percent.
J.C. Penney Company Inc.’s losses were slashed as the retailer stays steady on its turnaround strategy. The second-quarter loss of 5 cents a share easily beat the FactSet estimate for a loss of 14 cents a share. Like overall July retail sales, J.C. Penney’s had higher sales in home furnishings and beauty products and that combined with a cost-cutting program helped the company achieve its goals. The department store also said it was on track to log its first full-year adjusted profit in five years. J.C. Penney stock was higher in early trading to $10.15. Over the last three months the stock has increased by 25 percent.
Nordstrom Inc. is rising over 9 percent this morning after the department store retailer turned in a strong performance for the second quarter. The company said that the Anniversary Sale was very successful and raised its full-year guidance on earnings per share based on the improvements in the second quarter. The earnings of 61 cents a share beat the FactSet estimate for 56 cents a share. Sales were lighter than Wall Street expected and down from last year, but investors zeroed in on the sales increases at the Nordstrom Rack stores and the e-commerce sites. Beauty and footwear were the top-performing categories for the company.
Dillard’s Inc. is slipping by 4 percent to $63.75 following its second-quarter earnings results that were posted after the market close on Thursday. The department store chain said that its profits fell by more than 50 percent year-over-year. Comparable stores fell by 5 percent. Net income fell to $12.1 million, or 35 cents a diluted share, from net income of $29.9 million, or 75 cents, a year ago. Net revenues fell 4 percent to $1.49 billion from $1.55 billion, which included a 4.1 percent decrease in net sales to $1.45 billion.
Macy’s Inc. stock is taking a pause in trading today after Thursday’s explosive jump of 17 percent following the department store’s second quarter earnings report. The stock is down by 24 cents this morning to $39.57. While Macy’s sales were down 3.9 percent for the quarter, investors focused on the sequential improvement. Investors were also pleased to hear that Macy’s was trimming its physical store count.