Why Retail Stocks Like Sears, Macy's & Kohl's Are Surging

Shutterstock photo

Shares of several major U.S. retail chains surged on Wednesday, including Sears SHLD , Macy's M , Kohl's KSS and Target TGT .


Sears saw its stock price jump 5.4% before the opening bell on Wednesday after the struggling department store announced that it raised $100 million in new financing. On top of that, the company said that it is still looking for another $200 million in financing. Sears' CFO Rob Riecker noted that the new loan "demonstrates that we continue to have options to finance our business."

However, the company is still struggling to fight its way back after comparable-store sales fell roughly 16% during the first two months of the fourth quarter. Shares of Sears currently hover up around 4.47% on the day.


Shares of fellow once-mighty retailer Macy's popped more than 2.70% as investors continue to be impressed by the company's solid holiday shopping season. Last week, Macy's announced that comparable store sales gained 1% in November and December.

"Macy's had a solid holiday shopping season, and we are pleased that our November/December performance resulted in positive comp sales for the period, setting us up for a positive fourth quarter… We intend to close the fourth quarter in a good position and head into 2018 with momentum," Macy's CEO Jeff Gennette said in a statement.

Investors might also be pleased to note that the company remains committed to cutting costs. This includes the planned closure of 11 stores in early 2018, along with streamlining some "non-store functions."


Kohl's stock climbed over 2% as investors seem pleased with the department store's holiday sales growth. On Monday, the company reported that total and comparable November and December revenues jumped nearly 7% year-over-year.

The company noted that both online and in-store sales popped.  "All lines of business and all regions reported positive comp sales. As expected, growth in digital demand accelerated significantly in the Holiday period from the year-to-date trend. In addition, we experienced positive sales in our stores driven by stronger traffic," Kohl's CEO Kevin Mansell said in a statement.

Looking ahead, Kohl's raised its fiscal 2017 earnings guidance. The company now expects to post full-year EPS in the range of $4.10 to $4.20, up from its previous guidance of $3.72 to $3.92.


Shares of Target climbed over 3.20% as they inch near their 52-week high after the company reported that its holiday sales rose 3.4% from the year-ago period. This year-over-year jump was driven in large part by an increase in digital sales.

Target now expects to grow its digital sales by 25% in 2017. The retail giant also projects that Q4 comparable sales will jump around 3.4%, while full-year 2017 comps are expected to rise by over 1%. Along with a large increase in online sales, the company raised its overall fourth-quarter and full-year 2017 EPS guidance.

Looking ahead to 2018, Target projects to post a "low single-digit" jump in comparable store sales.

Other Retailers

Shares of department store chain Dillard's DDS jumped over 2.70%, while Nordstrom JWN stock popped nearly 2.40%. Dick's Sporting Goods DKS stock also rose, climbing nearly 1.50%.

Retail sector EFTs also jumped, including shares of the SPDR S&P Retail ETF XRT and the Direxion Daily Retail Bull 3x Shares ETF RETL .

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SPDR-SP RET ETF (XRT): ETF Research Reports

DIR-D RTL BL 3X (RETL): ETF Research Reports

Nordstrom, Inc. (JWN): Free Stock Analysis Report

Target Corporation (TGT): Free Stock Analysis Report

Dick's Sporting Goods Inc (DKS): Free Stock Analysis Report

Macy's Inc (M): Free Stock Analysis Report

Dillard's, Inc. (DDS): Free Stock Analysis Report

Kohl's Corporation (KSS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: XRT , RETL , JWN , TGT , SHLD

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com