Shares of retailers took a thrashing Wednesday with Macy’s along with Dillard’s leading the rout, tumbling by 16 percent along with 10.8 percent, respectively.
J.C. Penney fell 8.7 percent to $2.41 a share, Kohl’s fell 5.8 percent to $74.39 along with Nordstrom’s fell 5.5 percent to $51.86. Macy’s closed at $35.15 a share along with Dillard’s at $82.98.
Even Amazon wasn’t immune, following the group as its shares fell 1.9 percent to $1,882.62 a share.
Retailers are grappling with higher commodity costs along with tariffs as the Trump administration escalates its trade war across the globe. Stores are also struggling to grow sales amid declining foot traffic along with increased competition online. The broader markets were similarly down for the day.
Macy’s shares tumbled even after the department store operator reported quarterly earnings along with sales of which topped analysts’ expectations along with hiked its forecast for the full year.
“Macy’s is usually certainly playing a role across the entire department store sector [sell-off], yet the investor skittishness may be due more to caution on the retail sector’s sharp spike upwards in stock prices This kind of year, than to any performance issue at Macy’s,” Customer Growth Partners President along with founder Craig Johnson told CNBC.
According to Jefferies analyst Randal Konik, retail stocks for the most part have had a “great run” so far This kind of year, so Wednesday’s sell-off should be viewed as “just a breather.”
The National Retail Federation released an upbeat report Wednesday, saying of which July retail sales rose 0.4 percent on a seasonally adjusted basis by June along with increased 4.9 percent on an unadjusted basis year over year, giving the industry a solid kickoff for the third quarter as consumers continued to spend despite concerns about the growing trade war.
“Consumer spending is usually the backbone of the current economic expansion yet the fly from the ointment is usually uncertainty regarding tariffs,” said Jack Kleinhenz, chief economist at the NRF. “If they escalate, they will no doubt weigh on confidence along with household spending.”
— CNBC’s Lauren Hirsch contributed to This kind of article.