After dismal earnings by such mammoth retailers as Walmart, Targets and this morning’s “horror report” by Abercrombie and Fitch, on Tuesday afternoon we actually got a solid report by Nordstrom, which not only printed strong earnings but also hiked guidance sending the stock higher as much as 12%.
What was behind the divergence? Simple: as JPMorgan writes in its trading desk market recap, JWN earnings highlighted the divergence among consumer spending by income brackets.
Picking up on this, Bloomberg’s Felice Maranz writes that the latest earnings and comments from big-bank executives reinforce the view that while spending by lower and middle America may be falling off a cliff, spending by well-off US consumers is still robust, with scant sign of a pull-back.
Bloomberg also points to department store Nordstrom which is jumping after the bell after boosting its revenue and earnings outlook. The company, unlike so many of its peers who have seen their stocks crater following Q1 earnings, said core categories in 1Q — including men’s and women’s apparel and shoes – saw strong growth with shoppers “refreshing” wardrobes for social events, travel and going back to offices.
Read More: US Middle Class Is Shutting Down As Spending By The Rich Remains Robust