Market Insights / Commentary

Who’s winning the Darwinian war against Bezos?

By David Russell

It’s become common to think retail is dead thanks to e-commerce juggernaut (AMZN). But investors seem to be sifting through the wreckage and finding new survivors in the post-Bezos apocalypse. Today we’ll review a few names that may be winning the war of survival.

Kohl’s (KSS) jumps to the top of the list with a 57 percent gain in the last two months. The middle-American department store fell briefly in November, only to bounce and rampage straight up as investors focused on better inventory management and improved traffic. By late January, KSS was back to its highest level in 2-1/2 years. Its next earnings report is March 1.

Lululemon (LULU) has been viewed as another turnaround story since its online sales model began showing traction last June. Strong quarterly results followed on August 31 and December 6, along with raised guidance on January 8. Analysts at Citi and Deutsche — to name a few — have also cheered its advance. All that momentum kept the yogawear stock from barely flinching when its CEO was pushed out earlier this month. LULU is back near $84, a long-term resistance level that’s held it in check since early this decade.

Deckers Outdoors (DECK), yep, we’re serious. The maker of Ugg boots has doubled in the last year as management trimmed costs and found new customers in Europe. Some analysts are looking for more gains with the stock bucking an old peak from 2014.

Michael Kors (KORS) rebooted its business over the dog days of summer. The trick? Stop discounting! Investors started cramming money into the hand-bag maker even as analysts remained skeptical. Interestingly this stock tried to rally after reporting consensus-beating numbers on February 7, only to get swept lower with the broader market in the next two sessions. It’s clawed back since and yesterday managed to close back above its 50-day moving average.

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