Why Macy's, Nordstrom, and Kohl's Stocks Are Sinking Today
Rising numbers of coronavirus cases have investors worried.
John Rosevear
John Rosevear
(TMFMarlowe)
Jun 10, 2020 at 2:26PM
Author Bio
What happened
Shares of several department store chains were trading lower on Wednesday amid a broad market decline, as rising rates of COVID-19 infections in some parts of the United States had investors concerned about the ongoing reopening of the U.S. economy.
Here's where things stood for these three companies' stocks as of 2 p.m. EDT on Wednesday, relative to their closing prices on Tuesday.
Kohl's (NYSE:KSS) was down 7.1%.
Macy's (NYSE:M) was down 7.4%.
Nordstrom (NYSE:JWN) was down 5.7%.
So what
Rising rates of COVID-19-related hospitalizations in areas of the United States that have recently reopened had investors concerned about consumer-discretionary stocks on Wednesday, for reasons that are probably obvious.
Most companies dependent on discretionary spending (particularly those relying on brick-and-mortar stores for much of their revenue, like the three companies here) have had a rough few months. Most nonessential stores in the U.S. and Europe were closed in March, and remained closed until late April or into May.
A Macy's sign on the outside of a store.
IMAGE SOURCE: MACY'S.
Stores have been reopening in recent weeks, and companies have reported that sales are recovering. But many stores have reopened with limits on occupancy and hours. And with consumers still worried about the virus, a surge in new infections could slow the recovery or even reverse it for a while.
Given that all three of the companies here have already increased debt to try to bolster their balance sheets against the revenue lost from the store closings, a setback in the recovery could become a serious problem.