The Truth Behind the Recent Bloodbath in Retail Earnings

Editor's note: Regular readers know our friend Andrew Zatlin is a top-ranked economist who uses proprietary hiring data to find profitable trading setups in the market. In today's essay, he covers the recent bloodbath in retail earnings and shares three important charts you won't see in the mainstream media... Retailers have had a rough go […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] Editor's note: Regular readers know our friend Andrew Zatlin is a top-ranked economist who uses proprietary hiring data to find profitable trading setups in the market. In today's essay, he covers the recent bloodbath in retail earnings and shares three important charts you won't see in the mainstream media... --------------------------------------------------------------- The Truth Behind the Recent Bloodbath in Retail Earnings By Andrew Zatlin --------------------------------------------------------------- [Like Tesla on steroids]( Elon Musk is creating Tesla Automotive's biggest competition. He's just launched Tesla Energy Ventures that will deal in "PVAB" energy. As Musk recently said: "I expect [PVAB] to be roughly the same size as Tesla's automotive business." According to global energy research agency Wood Mackenzie, Tesla's energy business is already growing faster than its car business. Unfortunately, Tesla Energy Ventures is not yet publicly traded. But there is still a way to get in to the PVAB energy space right away. [Click here for more details](. --------------------------------------------------------------- Retailers have had a rough go of it lately... Last month, Home Depot (HD) reported its biggest revenue miss since late 2002. The home-improvement chain blamed cold weather and falling lumber prices on its lower-than-expected first-quarter sales. Management lowered guidance for the remainder of the year, sending the stock lower. A few days later, footwear retailer Foot Locker (FL) saw its stock drop 27% in a single day after falling short of Wall Street's expectations for revenue and earnings per share ("EPS"). Like Home Depot, the company lowered its guidance for the year, too. A week after that, electronics retailer Best Buy (BBY) had mixed earnings, blaming high inflation on domestic comparable sales falling 10%. Just days later, Advance Auto Parts (AAP) had a disastrous earnings report. The auto parts retailer lowered its full-year guidance, cut its quarterly dividend, and tempered its previous forecast for store expansion. The stock cratered, falling 35% on the news. And one day after that, underwhelming earnings from dollar store Dollar General (DG) caused its stock to fall 20%. The company fell short of revenue and EPS estimates as same-store sales growth slowed way down. Management also cut full-year guidance and pulled back plans to open new stores. These retail numbers are flat-out bad, but they don't tell the full story... When it comes to picking stocks, my strategy is simple: I follow the money. Which companies are growing? Which ones are consolidating? You can't always find the answers to these questions on CNBC or in the Wall Street Journal. But in the case of retail, I follow import and hiring data. Let me show you what I mean... Three years ago, retail spending looked a lot different than it does today... That makes sense. After all, in 2020, we were all sheltering in place. We spent money on new couches, new appliances, and new tech gadgets to keep us entertained. We didn't spend much on things like beauty products and clothes. Today, our spending habits have flipped. We aren't buying electronics or appliances, but we are buying things like clothing, apparel, and cosmetics. This is where import data becomes so valuable. Remember, goods being imported now will go on store shelves to be sold in a few months. In other words, today's imports represent tomorrow's retail sales. Let's look at this data in action... This year, first-quarter home furnishings imports were down 26% compared with the same period a year ago. Home entertainment experienced a 19% drop over the same period. And construction imports fell a whopping 37% from the same quarter a year ago. This data is telling. But it's not bad news everywhere. Imports for the auto industry, for example, were up $14 billion during the first quarter of 2023. Simply put, import data can help use forecast which sectors are trending up or down. --------------------------------------------------------------- Recommended Link: [This could be the biggest breakthrough since the Internet]( Google did it with search... Amazon did it with retail... Netflix did it with streaming... And Apple did it with the iPhone. And now, one little-known company is following the same playbook with the most disruptive technology since the Internet. And according to the man who's known by many on Wall Street as a stone-cold moneymaker... this obscure company is soon going to be the to be the talk of 2023. In fact, he's put together a brand-new presentation detailing this opportunity in full. [See it here before it goes offline](. --------------------------------------------------------------- And we can use the second key piece of data to confirm our hypothesis... That's my hiring data. Here's hiring for Fortune Brands (FBIN), which makes kitchen cabinets, plumbing, windows, doors, and more... As you can see, hiring surged during COVID when everyone wanted to remodel their homes. It has since collapsed. Same goes for paint company Sherwin-Williams (SHW), which has seen its hiring crater, too... Meanwhile, tire maker Goodyear Tire (GT) has seen hiring take off in recent months as the auto industry booms... Here's what's interesting... Hiring has ground to a halt with Fortune Brands and Sherwin-Williams, and it's quietly taking off at Goodyear Tire. And yet, all three stocks are mostly flat over the same period. Take a look... In other words, you have an opportunity to trade these stocks before Wall Street catches on. That's how my proprietary data gives my readers a huge advantage in the market and allows me to spot things that 99% of investors can't see. Regards, Andrew Zatlin June 6, 2023 --------------------------------------------------------------- Editor's note: A massive rollout is set to happen on July 1 that the Wall Street Journal reports could have a $70 trillion-a-year economic impact. Get the full story behind what Andrew calls "the most disruptive force since the Internet," and find out the steps you must take before this moment arrives next month [right here](. --------------------------------------------------------------- If someone forwarded you this e-mail and you would like to be added to the Empire Financial Daily e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2023 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 1125 N. 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