>> A mixed picture is emerging from the US retail sector. On the doom and gloom side, Macy's. The stock was down nearly 20% in Thursday trading for its biggest one day loss ever. The department store retailer Thursday warned the all-important holiday shopping season was not as strong as it hoped.
And brought down profit expectations for all of 2018. I'm Conway Gittens in New York. This warning is quite the mystery since Macy's has seen four quarters of sales gains. And the overall trends have been quite favorable. Consumers have been shopping and the retail sector was making a comeback.
Mastercard said holiday sales were the strongest in six years. And given the fact that unemployment is low and wages are rising, there is a general sense on Wall Street that this is not an economic problem, but specifically a Macy's problem. Besides being on the wrong side of the long trend of consumers shifting away from malls in favor of online shopping, Macy's has another problem.
Its primary product is apparel. Other clothing shops, such as Kohl's and Victoria's Secret parent, L Brands, also issued disappointing holiday sales figures. But on the bright side, chain stores like Target, which sell everything. The discount retailer Thursday said it saw a near 6% surge in holiday sales and is on track for its best annual sales numbers in 13 years.
Target scored a big win with consumers shopping for toys, baby products, and gifts among other things. And its Drive Up service, where consumers shop online and then drive to their local store to pick up the order without getting out of the car. Surged during the holiday season, making up 25% of the company's digital sales.
But Target shares are down in a retail sector sell-off as investors fear more pain and more retail bankruptcies are to come.