Jim Cramer: Soul-Searching in Retail
NEW YORK (Real Money) -- There's an awful lot of soul-searching going on in retail right now. It's become one of those moments where management teams are wondering about what happened this quarter, which, for many but not all, was a very tough one.
Just yesterday after the bell, three retailers that we expected more from, Gap
The Gap, fresh from giving shorts a slam about the head with some terrific monthly October comps, reported overall comps that were a total letdown and signaled that there was, in the word of excellent CEO Glenn Murphy, a lot of "fatigue" among the consumers. I didn't think the quarter was all that bad, but the Street, exemplified by BMO, thinks that the momentum has peaked, in part because of disappointing gross margins and that the lack of upside guidance could spell the end to the streak. I think that's severe, but the nation's largest apparel chain didn't give you much reason to hold on to it after that $37-to-$41 romp.
Ross Stores was a real puzzler. The quarter was worrisome on all fronts, including a marked deterioration throughout the quarter. I think it is safe to say after examining this quarter that Ross Stores is officially the poor man's TJX
But the most worrisome of the three was The Fresh Market because this one had real momentum not that long ago and seemed to be a legitimate challenge to Whole Foods