Retail recap: Lazard Capital comments
The Fed’s rate cut has certainly lifted the retail sector to the best performing of the day; however, Lazard Capital says the fundamentals for the sector still look bleak.
Lazard Analyst Todd Slater says his research suggests the month of January saw store traffic and sales trends below reduced expectations.
“Outside of hot-trending Ugg footwear and American Apparel basics, there’s not much percolating on the fashion horizon,” Slater wrote in a research note today. “While most retailers are becoming disciplined inventory managers, many are still struggling to liquidate holiday product, and markdowns remain higher than year-ago levels.”
Slater says the best defensive plans “may prove futile. Although January is typically a clearance-driven month, promotional cadence is noticeably higher than last year,” Slater wrote.
Among the small cap retailers leading the rally today are Bon-Ton Stores Inc. (Nasdaq: BONT), Christopher & Banks Corp. (NYSE: CBK), Shoe Carnival Inc. (Nasdaq: CVL) and Talbots Inc. (NYSE: TLB).
