Brick and mortar retail continues to struggle…
Macy’s just revealed its earnings report.
If there’s one sector that has been pummeled by the pandemic – it’s brick and mortar retail. And I know we’ve talked about it a lot, but as the earnings reports and numbers continue to pile up, we really see the damage Covid-19.
And while more information is revealed with time, one name has consistently remained in the negative limelight – Macy’s. The company reported earnings this week, and Macy’s stock immediately fell – so, you can probably guess the numbers weren’t great.
Here’s a breakdown of what we saw…
Where’s the money?
Macy’s earnings showed signs of hemorrhaging – but it wasn’t as ugly as analysts might have expected. Macy’s lost 19 cents a share on revenue that fell 23% to $3.99 billion. Analysts were looking for an $0.83 loss on revenue of $3.91 billion. Same-store sales slid 21% in the quarter, while analysts had predicted a 23.3% decline.
There was one clear, bright spot thought – digital sales climbed 27%. I’ve been saying it for a while, but the only way any retail name will survive the new climate is if they focus their energy on improving their e-commerce presence.
But despite this earnings report not being as bad as one might have expected, I’m still not buying into the hype surrounding the comeback of brick and mortar retail. But that doesn’t mean you can’t score some fast cash off this struggling stock. And today, I’m going to give you step-by-step instructions on how to do just that.
How do I get some?
Here’s the thing, Macy’s is one of those stocks that is so heavily shorted and has so much debt. But the stock doesn’t seem to care because it continues to move higher. And that has me believing that we’re currently seeing what’s called a dead cat bounce – and it’s one that should be sold. And that’s precisely why I’m looking to use a put spread to set myself up for profits. Now, spreads not only help lower the cost of options but also help control risk. So, this is the ideal setup for a volatile market.
Here’s how I’d do just that with Macy’s (M)…
Buy-to-open M February 15, 2021 $6 put and Sell-to-open M February 15, 2021 $7 put, creating a vertical put spread for a $0.20 debit. If you agree, all you have to do is tell your broker that you want to Buy-to-open M February 15, 2021 $6 put, and Sell-to-open M February 15, 2021 $7 put for a $0.20 debit, and just like that, you’ve got skin in the game.
In the spotlight: It’s time for another jobs numbers update…
It’s Friday, so that means it’s officially time to dig into the past week’s jobs report. And the numbers aren’t looking great.
742,000 Americans filed for first-time unemployment benefits on a seasonally adjusted basis last week. That number was up from the week before. This marked the first increase in unemployment claims since the week of October 10. On top of this, 320,237 workers filed claims under the Pandemic Unemployment Assistance program, which is designed to help those who aren’t typically eligible for jobless benefits, such as those who are self-employed. That number rose from the prior week as well.
When you add those numbers together, first-time claims came in at 1.1 million. And continued jobless claims, which counts people who have applied for benefits at least two weeks in a row, came in at 6.4 million.
And now, the worry of economists is growing. When it comes to benefits, it is expected that the benefits are only offered for 26 weeks. After that, these people would be rolled into government programs, including the Pandemic Emergency Unemployment Compensation program. So, even when we see shrinking numbers in unemployment numbers – it’s not always a good sign. It could just be people being shuffled to a new type of program.
With that said, this uptick in every sector of unemployment is proving what we already know – the pandemic is still going strong, and we still have a ways to go when it comes to economic recovery.
A Different Way to Take Advantage
The COVID-19 pandemic has completely upended many sectors, perhaps none more than traditional brick-and-mortar retail.
But believe it or not, dramatic shifts like these get my colleague, market expert Shah Gilani, very excited…
He considers the continued transition to online purchasing to be what he calls a “hyperdrive event.”
Events that change the very fabric of American life – like Netflix reimagining video consumption – fall under this category… and individual investors who are know early on have the chance for serious profits.
Best of all, Shah has pinpointed five specific tech companies that are set to receive a $350 billion infusion of wealth over the next 18 months alone, thanks to a new hyperdrive event he’s watching.
Click right here for the full story.