Market Overview

Retailers Are Awfully Weak This Morning

Retailers Are Awfully Weak This Morning

Another earnings season, another poor performance for retailers.

Shares of Kate Spade & Co (NYSE: KATE) were trading lower by nearly 20 percent after the company reported a top and bottom line earnings beat in its second quarter print but slashed its full year fiscal 2016 earnings per share, EBITDA and sales guidance.

Related Link: Jefferies Is Bullish On Handbags, Says Buy Coach And Michael Kors Ahead Of Earnings

Kate Spade is a premium maker of handbags and accessories. The entire sector has been on edge the bast few years as companies like Kate Spade, along with Coach Inc (NYSE: COH) and Michael Kors Holdings Ltd (NYSE: KORS) are dealing with a rapidly changing industry and shifting consumer tastes - not to mention an uncertain economic outlook that has many perspective buyers holding on to the extra few hundred dollars in cash rather than splurging on a luxury good.

Shares of Coach and Michael Kors were also hard hit Wednesday morning, each down nearly 6 percent.

Business Insider reported nearly a year ago to the day that the designer handbag industry is "losing its luster." Its in-depth report on the declining relevancy of the handbag and apparel market may have been re-confirmed by Kate Spade's Wednesday's earnings print and outlook.

Meanwhile, investors and traders are also heavily selling fashion-related retail and department store names. Shares of Kohl's Corporation (NYSE: KSS), Macy's Inc (NYSE: M) and J C Penney Company Inc (NYSE: JCP) were all lower by at least 3 percent.

The SPDR S&P Reatial (ETF) (NYSE: XRT) was down about 1 percent to $43.39.


Related Articles (COH + JCP)

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