(Michael Siluk/Getty Images) |
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Yesterday, the S&P Retail Select Industry Index hit a 52-week low, despite retail's strong Q4 earnings. But while last holiday season delivered, retailers have started to take a more cautious outlook as they brace for a possible slowdown ahead. Kohl's shares sank 24% after a bleak earnings call yesterday: it slashed its quarterly dividend and issued guidance that's worse than even the most pessimistic analyst had expected. Like many retailers, Kohl's is feeling the squeeze as more shoppers pull back on nonessentials. While inflation has eased, Kohl's management noted that those earning under $50,000 — and even those under $100,000 — are cutting back, with the potential for more pullback in the coming months. Looking ahead, it's not pretty. Kohl's expects net sales to fall 5% to 7% this year, well below expectations. |
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The discount department store may be a bellwether for lower-income US consumers. Retail executives are already bracing for more challenging times ahead, as two-thirds of those surveyed in Deloitte's 2025 US Retail Industry Outlook report expect consumers to shop more often but with smaller baskets, focusing on essentials. This could be bad news not only for retail chains but the economy as a whole, since consumer spending makes up nearly 70% of US GDP. |
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Why did this innovation take so long? |
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Delta dropped just over 7% yesterday after reporting that it'll be slashing its revenue forecast, and that has pretty big implications for the economy as a whole. One reason? Delta flagged that it's not just consumer confidence it's seeing decline, but the big one: corporate confidence. For the airline industry, those corporate customers are the real ball game. Sure, many people might interact with Delta every now and then en route to a vacation, but corporate business is where airlines live and die. That's why a decline in corporate confidence has airline investors so jittery, and is one reason for pause in general. The US spent $421.1 billion on business travel in 2022, which is about double the revenue of Amazon. If the companies providing fuel for the engine that is corporate travel start skimping, that's going to trigger some real problems down the runway. For Delta, the folks in the cockpit are telling investors to buckle their seatbelts because they're in for some rough turbulence. As recently as January 10, revenue was projected to increase 7% to 9%, but yesterday's forecast has that all the way down to 3% to 4%. |
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The worrying thing? This probably isn't just Delta. If Delta's spotting a serious enough deterioration in corporate spending that it's worth yanking its earnings guidance, a real cutback to business travel is the kind of symptom that could represent a major underlying condition for the economy. Heck, that might even be why a rival airline also announced a fairly drastic move that passengers are definitely going to hate. |
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You May Be Wasting Money on Home Insurance |
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Yesterday's Big Daily Movers |
- Verizon warned of weak sales, saying it's had a "challenging quarter," sending the stock down over 6%
- Dick's Sporting Goods scored a Q4 earnings beat but fumbled its outlook
- Hesai, a maker of three-dimensional light detection and ranging solutions (you might know it as lidar), soared 50% after signing a deal with Mercedes-Benz
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- February Consumer Price Index
- Earnings expected from Adobe and American Eagle
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Advertiser's disclosures:
1 Reservations do not require purchase of a Casita and there is no assurance of how many will result in actual purchases. 2 The minimum investment is $1,000. This is a paid advertisement for the Boxabl Inc. Regulation A offering. Please read the offering circular and related risks at www.boxabl.com/invest#circular. Investing in private company securities is not suitable for all investors because it is highly speculative and involves a high degree of risk. It should only be considered a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid, and there is no guarantee that a market will develop for such securities. DealMaker Securities LLC, a registered broker-dealer, and member of FINRA | SIPC, located at 105 Maxess Road, Suite 124, Melville, NY 11747, is the Intermediary for this offering and is not an affiliate of or connected with the Issuer. Please check our background on FINRA's BrokerCheck. |
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Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more |
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