Specialty Retailers Bring Retail REITs Early Holiday Cheer – Forbes

(Photo by Michael Loccisano/Getty Images for PUMA)

Heading into the holiday shopping season, the story around retail isn’t all gloom and doom. Especially after a handful of impressive quarterly earnings reports last week, which boosted overall industry moral.

My hope is that the momentum will spill over to retailers’ landlords, too, which have been beaten down for much of the year on account of exasperated headlines.

While most department stores have struck a somber cord this earnings season, brands including Gap, Foot Locker, Abercrombie & Fitch and Ross Stores surprised the Street with results that outpaced many analysts’ expectations.

Shares of Foot Locker and Abercrombie & Fitch, for example, were both soaring more than 20% Friday afternoon on the news. As Foot Locker doubles down on its relationship with Nike, a favorite nameplate in the athletic category, teen apparel retailer Abercrombie & Fitch is in the midst of a turnaround effort that includes closing unprofitable stores and rethinking its clothing design.

L Brands offers another unique story within retail, and last week’s results were mixed. The parent company of Victoria’s Secret and Bath and Body Works has tremendous exposure across America’s shopping malls.

While L Brands shares initially tumbled on news of lower same-stores sales, or those sales made at stores open for more than a year, the stock began to claw its way back after a handful of analysts issued optimistic reports about the retailer’s future.

“In our view, the sequential improvements in the core business … as VS product and marketing efforts take shape suggest that VS comps and margins have bottomed and are poised for acceleration for the next few quarters against easier compares,” RBC Capital Markets analyst Brian Tunick wrote in a note to clients last week.


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