Wal-mart tops sales forecasts - bullish or bearish indicator?
If we're heading into a recession, then it stands to reason people will opt to shop at lower-cost stores, example: WMT. I'd like to know if other retailers (higher end) have been topping forecasts as well.
Any thoughts?
Answers
508 points
John answered one year ago …
I would stay away from high-end retail. Although you could make some money, depending on how long this economic slowdown continues they may continue to slide. Companies like Tiffany and Coach were darlings for the past couple years because middle class were able to purchase some of their products for a taste of Luxury. Yet, with the economy slowing, these items are the first to be cut from their spending lists. Which leaves only the upper class to purchase these items loosing a significant portion of their consumer base. They will probably hang at these levels or lower until the economy turns around. Remember there is a global slow down so the demand for these items is dieing world wide.
I just can not find any reason why luxury retailers would outperform during a slowdown.
