School opening not seen as retail boost

Back-to-school shopping won’t lift U.S.-focused department store and specialty retail stocks out of their doldrums, recent research from UBS show.

Macy’s Inc., Kohl’s Corp., Nordstrom Inc., the Gap Inc., and L Brands Inc. might look like compelling investment opportunities given 25-38 percent declines so far this year, but UBS

research suggests weaker U.S. consumer spending intentions.

“These stocks likely need improving sales growth to (raise their prices) and we think this scenario is unlikely over the next three months,” analyst Jay Sole wrote on Monday, describing the industry outlook as the “Back-toschool Blues.”

The research firm’s U.S. Softlines Spending Forecast, which models out U.S. clothing and accessory store sales over the next 90 days, shows a 0.9 percent decline year-over-year in August and September.

In addition, warmer weather forecasts do not bode well for Fall goods, though, temperature is expected to have a “neutral” impact on August clothing and footwear sales, Sole said.

The holiday sales outlook is cheerier. “Holiday 2019, at this point, looks more like 2017- 2018 than 2012-2016,” Sole said.