A Surprising Week in Retail Ahead of #BlackFriday

Walmart, Abercrombie & Fitch, Foot Locker & The Gap Surprise to Upside

Lots and LOTS of brain damage about how to salvage retail these days. And there should be: look at THIS graphic of empty retail storefronts in New York City. So, here, there are some interesting suggestions for the future of retail by a venture capitalist. And, here, a real stretch by Williams-Sonoma Inc. ($WSI) with the acquisition of augmented reality 3D imaging startupOutward for a nice sum of cash. Meanwhile, US e-commerce sales jumped 15.5% in Q3. In a CURIOUS week which calls into question the full power of the "Amazon Effect" (just kidding, no it doesn't) many down-and-out retailers like Abercrombie & Fitch Inc. ($ANF), Gap Inc. ($GPS) and Foot Locker Inc. ($FL) surprised to the upside. TJX Co. ($TJX), on the other hand, broke its 8-year sales growth streak while missing revenue estimates all while competitor, Ross Stores Inc.($ROST), blew it out of the water. Perhaps TJX' miss is a one-time thing that truly is attributable, as its CEO said, to poor merchandising and weather or, as we asked on Twitter, maybe the discounters are subject to a trickle-down effect...? Elsewhere, we should note that Poshmark, an app-based fashion marketplace that we have credited for contributing to millennials' distaste for malls, raised $87.5mm in Series D funding. Finally, Black Friday may put a dent in household debt levels as credit spending is on the rise. We're sure that'll play out just fine.

Lots of Busted #Retail Narratives

Get em' a body bag. This is getting ugly. A few counter-narratives got napalmed this week in the retail space. It was a solid flameout, but, by the end of the week, there were some relative positives...

First, the narrative that discounted apparel retailers are doing just fine. Well BAM! Then The TJX Companies Inc. ($TJX) reported totally lackluster numbers for its T.J. Maxx and Marshall's brands. The floor fell out from under the stock in response. (To be fair, though, Ross Stores Inc. ($ROST) reported revenue and earnings growth though, still, at a slower pace).

Second, that "there will be winners from the bankruptcies." Well, that narrative got absolutely dumped on when Dick's Sporting Goods ($DKS) reported numbers. We're old enough to remember the bump that Dick's was supposed to get from The Sports Authority liquidation. Well, the stock got no such bump on its way to a 14% decline (though, there could be some credence to the argument that this is short term pain once the COB sales of recently liquidated competitors, e.g., Gander Mountain, end).

Can Super Hipster save the day? No, no, of course not. His jeans are too frikken tight...as evidenced by the bloodshed that was Urban Outfitters ($URBN) earnings report.

Okay, enough doom and gloom already: footwear is clearly safe. Wait. No. No its not. Foot Locker ($FL) reported and the stock immediately got pummeled. Apparently the white Adidas thing is over. Next?

Now, on the flip side, Target ($T) busted expectations favorably despite declining numbers across the board (other than a fairly meaningful increase in e-commerce); Ralph Lauren ($RL) exceeded pretty low expectations, though same stores sales comps declined 11%; Gap Inc. ($GPS) generally surprised all around and saw its stock rewarded. And then there was Walmart ($WMT). The behemoth reported growth in revenue and same store sales numbers and a KICKA$$ 63% sales growth figure for e-commerce (though this perhaps shows they were starting from virtually nothing).

Some narratives that DID hold: consumers don't want to spend discretionary income to be a walking billboard for brand. Apropos, American Eagle Outfitters' numbers were bloody. And women's specialty retail continues to be beaten down: Ascena Retail Group ($ASNA) - better known for brands like Dress Barn and Ann Taylor - offered horrible guidance and subsequently traded down 29%. Bon-Ton Stores showed same store sales down 8.8% and a net loss of nearly $60mm. Fresh off of getting a target painted on its back by the ratings agencies, big and tall men's apparel retailer Destination XL Group Inc. ($DXLG) announced some pretty bearish guidance. Finally, Florida-based department store Stein Mart Inc. ($SMRT) got OBLITERATED by the perfect storm of massive discounts and light foot traffic on its way to suspending its dividend and a massive stock plummet (though e-commerce showed improvement). 

Did you get all of that?