AMZN, WMT, TGT retailers are posting horrible numbers, the wage inflation is hurting them. I thought retail is at last making a come back, here we go…
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WMT was primarily hit by 3 factors.
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Shrinking profit margins.
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Higher labor costs.
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Higher fuel costs. This hit them in two ways. First, the transportation costs of getting their merchandise into the stores. Second, the profit from their gas stations is way down.
Most people think that gas stations benefit from higher gas prices, but typically they do not.
Bought a small 100 share WMT position this morning. Looking at a couple of other retailers.
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I think it is early to buy retailers. The damage is sever and we need some stabilization. I sold my long-term target position yesterday.
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Amazon.com Inc., stuck with too much warehouse capacity now that the surge in pandemic-era shopping has faded, is looking to sublet at least 10 million square feet of space and could vacate even more by ending leases with landlords…
Amazon could try to negotiate lease terminations with existing landlords, including Prologis Inc.,
https://www.bloomberg.com/news/articles/2022-05-21/amazon-ai…
I am not expecting Industrial REIT’s to suffer, but read this as another canary in the coalmine for retail sector.
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I find myself owning things such as stwd, mplx, and one preferred. if O ever gets below $50 I might be a buyer.
“I think it is early to buy retailers. The damage is sever and we need some stabilization. I sold my long-term target position yesterday.”
Well they may go down, but so far it has beat cash. My small WMT position is up 5% in a week. I also bought 500 shares of DKS at the open and sold it a couple of hours later for a 20% gain.
And they say markets are efficient!
Sometimes it is more the expectations of the market. If everyone knows something, of thinks that they know something, it is already baked into the price.
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"… if O ever gets below $50 I might be a buyer. "
I’ll be backing up a semi to buy if it get below $50. That is if it caused by a market induced drop and not a management caused drop.
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