Last week, major retailers reported better-than-expected April
same-store sales, led by
Limited Brands, Inc.
), which reported a 20% increase in April same-store sales, while
raising its first-quarter forecast. Also notable,
Costco Wholesale Corporation
) posted a 12% April same-store sales gain, boosted by gasoline
sales and appreciating foreign currencies. Excluding gasoline sales
and windfall currency gains, Costso's same-store sales rose an
impressive 7% in April. (A later-than-usual Easter helped with
What makes these numbers all the more impressive is that they
cover April, when gasoline prices were soaring. To fight these
higher gasoline prices, consumers in April seemed to plan their
shopping trips more carefully, but they kept shopping! Now that
crude oil prices have fallen, this will likely help consumer
confidence to rise, fueling higher retail sales in May. The fact
that the commodity bubble now appears to have burst may convince
more businesses and consumers to resume their spending with
However, not all consumer stocks are faring as well as LTD and
COST. It seems some big names continue to struggle, and it is
doubtful they'll turn things around anytime soon.
Here are seven consumer stocks investors should sell:
Nike Inc. (NKE)
During the past 12 months, sporting goods and athletic wear
) has watched the value of its stock drop 8%, compared to a gain of
16% for the S&P 500 Index. Earnings numbers haven't been
stellar for Nike either, which missed analysts' estimates by 4% in
the most recent quarter.
Target Corp. (TGT)
Discount retail chain
) has had a rough year so far, dropping 17% in 2011. And in the
past 12 months, this big-name retailer has watched its stock value
drop 12%. Sell this stock as it trades close to its 52-week low of
Carnival Corp. (CCL)
Cruise and vacation company
) is down 13% in the last three months, and has returned only a
meager 1% in the past year compared to double-digit percentage
gains by the broader markets. Analysts are projecting that CCL's
earnings will drop 9 cents this quarter compared to the company's
EPS last year. Quarterly earnings growth of -13%, year over year,
in its last income statement is also discouraging.
Sony Corp. (SNE)
Global technology developer and retailer
) is another blue-chip stock worth selling. Year to date, SNE stock
has dropped 20%. Additionally, the stock is down 16% in the last 12
months. In its last income statement, Sony posted quarterly revenue
growth of -1% and a quarterly earnings growth of -9%, year over
Panasonic Corp. (PC)
Another consumer technology developer making the list is
), which is down 13%, year to date. Looking further back, PC stock
has lost 10% in the last 12 months. Investors should also be
deterred by the company's quarterly revenue growth of -7%, year
over year, from its last income statement.
Best Buy Co. (BBY)
Perhaps the biggest loser on this list is
Best Buy Co.
) which has watched its stock slide 11%, year to date, and 31% over
the past six months. Earnings wise, analysts are projecting a
4-cent drop in EPS compared to this quarter last year. Sell this
stock, which is trading close to its 52-week low of $28.09.
Campbell Soup Co. (CPB)
Convenience food company
Campbell Soup Co.
) may claim to sell hearty soups, but its stock has been
unfulfilling of late. Year to date, this blue-chip stock is down
3%. Quarterly earnings growth of -8% is just another reason to
ditch Campbell Soup.