Nordstrom Coming Down Like a Storm, After Posting Monstrous Earnings Results

Does anyone still shop here? I was a big Nordstrom customer, back in the mid 2000’s when I wanted to impress people with my garments. Now’erdays, I wouldn’t mind looking like a nomad monk, traveling about the mountainside in a sheet (no klan). Nevertheless, the fancy people over at JWN are getting their dentures knocked out for them in an egregious after-hours trading session.

Shares are off by $7.75 or 17% to fresh lows.

The last time JWN was loitering at these levels was August of 2011, a time and place that was horrific for investors–stuck in them middle of a European debt crisis and the degradation of the U.S. credit rating.

I mean, look at this numbers, man. Huge revisions.

• Reports Q1 (Apr) earnings of $0.36 per share, excluding $0.10 in charges, $0.09 worse than the Capital IQ Consensus of $0.45; revenues rose 2.5% year/year to $3.19 bln vs the $3.23 bln Capital IQ Consensus.
• First quarter earnings were below the Company’s expectations, primarily driven by lower than planned sales and higher markdowns to better align inventory to current trends.
• Comps decreased 1.7% vs. +0.2% ests.
• Full-price net sales, which consist of U.S. full-line stores and Nordstrom.com, combined with Canada and Trunk Club, decreased 2.2% and comparable sales decreased 4.3%. Across U.S. full-line stores and Nordstrom.com, the top-performing merchandise category was Beauty. The younger customer-focused departments in Women’s Apparel continued to reflect strength with positive comparable sales increases. The Midwest was the top-performing full-price geographic region.
• Off-price net sales, which consist of Nordstrom Rack stores and Nordstromrack.com/HauteLook, increased 11.8% and comparable sales increased 4.6%. The East was the top-performing off-price geographic region.
• Gross margin of 34.2% decreased 164 basis points YoY primarily due to higher markdowns to better align inventory to current trends.
• While sales trends were below expectations, we ended the period with inventory growth of 5.4% and net sales growth of 2.5% resulting in a negative spread of 3%, which represents an improvement over the negative spread of 7% in the fourth quarter of 2015.
• Co issues downside guidance for FY17, lowers EPS to $2.50-2.70 from $3.10-3.35 vs. $3.20 Capital IQ Consensus; lowers FY17 revs to +2.5-4.5% to ~$14.45-14.73 bln (from +3.5-5.5%) vs. $14.74 bln Capital IQ Consensus; lowers comps to -1% to +1% from +0-2%.
• The Anniversary Sale shift into Q3 will impact comps 200bps in Q2 and +250 bps in Q3.

Apple and Netflix, two vital components of the tech growth narrative, are under siege.

Valeant Pharmaceuticals, and similar aggressive drug caitiffs, is death spiraling towards oblivion.

Retail is in tatters, complete fucked from crown to foot.

The banks are a joke, hamstrung by onerous regulators and shrinking margins.

The sole bastion of hope, and cocaine fueled joviality, can be found in the oil patch.

With crude angering its way higher, a great merriment will sweep the nation. People will rejoice in higher fuel and power generation expenses, while stockpiling  copper tubing.

With oil going higher, industrials seem to work too. They’re interconnected.

In summary, to be long this market with any semblance of confidence, you must pray to the ghost of John D. Rockefeller, hoping that he can provide succor to the price of crude from Elysium. If crude fails here, the market is going straight down like swill in a sieve.

When I say ‘death spiraling’, I really mean it. The deleterious price action has take on a life of its own. The news is the stock going lower. That’s when you know you’re in a death spiral. Like previous death spirals before, and many that will sure follow it, Valeant could succumb to the pressures of the market by losing the ability to refinance its enormous debt.

Then it’s light out.

When the stock was $250, the debt wasn’t all that important. However, with the stock at $25 and their debt/eq ratio greater than 3x, that $30 billion looms large.

Don’t believe me? Read Bill Ackman’s private email to Michael Pearson, former CEO at Valeant.

Touching on the topic of shopping malls and how many of them will fail over the next 5 years, how will that affect successful mall based operators like AAPL and SBUX?

Surely the perverse weakness in just about every mall based merchant has to start worrying people about the virility of the mall itself. Along those lines, if the fucking mall closes down, what the hell will Apple do?

I guess they’re just migrate down the block to a strip mall scene; but it wouldn’t be the same experience.

Shares of AAPL are getting hammered today, based on the fact that the law of large numbers have finally seized the social butterfly, Tim Cook, by the short hairs.

The people no longer care about your sexual orientation, Tim. The people want the teevee, asshole. So quit thinking about building a car, and get to building America the teevee it deserves.

The whole idea of Apple at fresh 52 week lows, off by 28% since last year, is taxing for investor’s psyche.

With $230 billion in cash reserves, Apple desperately needs to shake things up a bit. Simply buying back stock for the sake of appeasing hedge fund managers is asinine and infantile. They need to grow, make smart acquisitions, innovate, stop being so gay, etc.

All of a sudden, America has an oversupply of shopping malls? Or, is Amazon merely stealing customers, or both? It’s probably both.

Thanks to the changing landscape, Jan Kniffen, consultant to retail, believes 30% of America’s malls will fail in the coming years. Moreover, he believes Macy’s will shutter 300 out of its 800 slop-houses.

“On an apples-to-apples basis, we have twice as much per-capita retail space as any other place in the world. The U.K. is second. They’re half of what we are. So, yes, we are the most over-stored place in the world,” he told CNBC’s “Squawk Box.”

With the U.S. having an estimated 48 square feet of retail space per citizen, the footprint is poised to decline “pretty fast,” Kniffen said.

In his view, about 400 of America’s 1,100 enclosed malls will fail in the coming years. Of the survivors, about 250 will thrive and the rest will struggle. Likewise, Macy’s probably needs 500 of its roughly 800 existing stores, he said.

Out of the box thinking here, what will happen to Apple? They’re probably one of the few successful mall based stores out there. If 30% of the malls close, what the fuck happens to them? Or, how about SBUX, the REIT operators and Orange Julius?!

The failure of the mall will have ramifications. Just the blight alone, of having to see an empty edifice that once housed greatness, is demoralizing and horrific for local real estate values.

The whole country is becoming Detroit, thanks to the digital geeks at Amazon. We’re going to be reduced to a post apocalyptic world, with empty malls, and a ruinous landscape, as humans migrate over into the virtual world, like in the movie The Matrix, only real!

Get ready to rally, you ungrateful knaves.

The oil men have done to heavy lifting and have set oil on an upward trajectory. The rest is up to us, the small people playing with stocks and bonds.

SPY Futures and WTI have, just about, a 1:1 correlation ratio. One does not go higher without the other.

As such Nasdaq futures are sharply higher, as WTI gaps higher off the IEA report.

Via Briefing

This morning, the International Energy Agency (IEA) released its monthly Oil Market Report (OMR), which stated that the global oil market is almost in balance

On top of yesterday’s weekly EIA inventory data, this catalyst is helping give oil prices a boost

The agency expects to see a notable reduction in global oil inventories in the second half of 2016, following a continued build in the first half, partially led by the increase seen in production and exports in Iran

On the demand side, the OMR for May revised global oil demand growth for Q1 of 2016 upwards to 1.4 mb/d, led by strong gains in India, China and, more surprisingly, Russia.

For the year as a whole, growth will be around 1.2 mb/d, with demand reaching 95.9 mb/d

We’re all slaves to the fucking oil derrick.

This is the equivalent of hitting a homerun in the top of the 9th inning, with the score 23-2, NOT in your favor.

Small win here by RL. New management cleaned house last quarter and has really easy comps to beat.

Revenues fell 0.7%, year over year, so let’s not get excited over this.

Reports Q4 (Mar) earnings of $0.88 per share, $0.05 better than the Capital IQ Consensus of $0.83; revenues fell 0.7% year/year to $1.87 bln vs the $1.86 bln Capital IQ Consensus. The decline in reported net revenues was in line with the guidance provided in February of a 0-2% reported revenue decline and included ~110 basis points of negative impact from foreign currency effects. In constant currency, international net revenue rose 3% in the fourth quarter, offset by a 1% decline in the Americas that was due to proactive measures taken in the U.S. to clear end-of-season inventories related to the Fall season.

In Q4, wholesale segment sales decreased 5% on a constant currency basis and 6% on a reported basis to $942 million, primarily due to a decline in sales in North America.

Retail segment sales increased 7% on a constant currency basis and 6% on a reported basis to $889 million in the fourth quarter, driven by the benefit of a 53rd week of sales, new store expansion and e-commerce growth. On a 13-week to 13-week basis, consolidated comparable store sales decreased 5% in constant currency and 6% as reported during the fourth quarter.
Gross profit margin was 54.5%, which was 90 basis points lower than the prior year period, reflecting proactive measures taken in the U.S. to clear end-of-season inventories related to the Fall season, in addition to unfavorable foreign currency effects.

Co will guide Q1/FY17 at June 7 Investor Day.

Kohl’s is a sad store. It’s one of those places that you forget exists; and then once inside, you say to yourself ‘they have interesting stuff’, and then never visit again.

They are the Circuit City of clothing, an old Cramer favorite. The stock is at 7 years lows, off a staggering 50% from last year.

Reports Q1 (Apr) earnings of $0.31 per share, $0.06 worse than the Capital IQ Consensus of $0.37; revenues fell 3.7% year/year to $3.97 bln vs the $4.13 bln Capital IQ Consensus.
Comps -3.9% vs slightly positive estimates; gross margin -139 bps YoY to 35.5%.

“First quarter sales were challenging. Despite the sales environment, we were able to manage our gross margin and inventory levels consistent with our expectations as we took the markdowns necessary to clear excess inventory. We managed our expenses effectively throughout the quarter as every area contributed to our savings versus our plan.”

This stock is going seed fucking crazy in the pre-market, now up 16%.

It started off with a whisper that BASF would bid for the company. Traders woke up to that, scratched their balls, and bid MON higher by 6%. Then an hour later, Bloomberg broke a story, likely leaked by some fuckhead attorney, that Bayer would bid $40 billion for the ornery seed giant–sending shares through the fucking roof.

If House DuPont could merge, so can the birds at Monsanto. My best guess, this deal gets done at higher prices.

Bill fraternized with former college friends a lot, hiring them at his firm, permitting them to make multi- billion dollar, ruinous, investment decisions.

Now that the dust has settled and Bill’s cock is on the line, those fuckers are seeing their way to the door. I wouldn’t be surprised if Bill had their country club membership status revoked, and checkered pants soiled.

William Doyle, a key figure in Pershing Square Capital Management’s controversial investment in battered drug company Valeant Pharmaceuticals, is leaving the hedge fund, its founder, William Ackman, told investors on Wednesday.
Doyle introduced Michael Pearson, the former CEO of Valeant, and Ackman, the billionaire activist investor, in early 2014 and a year later Ackman’s Pershing Square invested in the Canadian drugmaker.
Doyle was friends with Pearson from their days as consultants at McKinsey and Doyle knew Ackman through Harvard Business School. Doyle joined Pershing Square’s investment team shortly after brokering the initial meeting and helped oversee science-oriented investments.
Last month, Pershing Square said Doyle would not stand for reelection as a board member at animal health company Zoetis Inc. Earlier this week the fund sold a chunk of its investment in the company.
Doyle’s exit marks the second departure of a Pershing Square investment team member in five months. In January, Paul Hilal, who has been friends with Ackman since college, left the firm.

See you later, Mr. Doyle. I am sure Bill hopes that you burn in hell for what you did to him and fellow employees at Pershing. That was no way to treat a fellow Harvardian, you scoundrel you.