Retail's Biggest Winners and Losers

Source: Thinkstock
Retailing is a notoriously competitive business and retail winners and losers can switch positions in a relative heartbeat. For the losers, the writing is often on the wall for a long time — see RadioShack for an example — but the ultimate end is like being nibbled to death by ducks.

The winners, however, power on, usually on the back of an established brand that offers customers what they want and a reason to come to this particular store to get it.

We have looked over the retail universe and come up with the best and worst performers over the past five years and the best and worst over the past 12 months. For the longer term comparison, we used EPS growth over five years; for the shorter term comparison we screened for forward price-earnings ratio among companies expected to post positive earnings growth this year. Retail stores are divided into department stores, discount stores and apparel stores. We will take a look at other categories in a later story.

Department Stores

The top-performing department store over the past five years has been Bon-Ton Stores Inc. (NASDAQ: BONT), up nearly 55%, followed by Dillards Inc. (NYSE: DDS), which has seen its share price rise by more than 44%. Macy’s Inc. (NYSE: M) has gained more than 11% over the past five years.

ALSO READ: February Retail Sales Affected by Port Slowdown, Weather

Dillard’s forward price-to-earnings (P/E) ratio is 13.65 and the current consensus target price is $123.60, indicating that the stock is fully valued at the most recent closing price of $131.32. Kohl’s Corp. (NYSE: KSS) is the second best performer over the past 12 months. Its forward P/E ratio is 14.85 and its consensus target price is $73.48, also implying that shares are fully valued at Wednesday’s closing price of $74.30.

The two worst performers over the past five years are J.C. Penney Co. Inc. (NYSE: JCP), where shares are down nearly 75%, and Sears Holdings Corp. (NASDAQ: SHLD) where shares are down nearly 60%, compared with rise of more than 80% in the S&P 500 index. They are also the worst performing department stores over the past 12 months.

Discount Stores

The top share price gainer over the past five years is Dollar General Corp. (NYSE: DG), with share price growth of about 56%. Dollar Tree Inc. (NASDAQ: DLTR), soon to merge with Family Dollar Stores, in second with share price appreciation of 26% over the period. PriceSmart, Costco, Fred’s, Wal-Mart, Target and Big Lots trail.

ALSO READ: Shopping at Wal-Mart Now Way More Affordable Than at Target, Peers

On a 12-month basis, online retailer Zulilly Inc. (NASDAQ: ZU), the weakest performer on the basis of trailing P/E posts, claims the best forward P/E at 32.69. Its consensus analysts’ price target of $22.27 implies an upside of 65%, based on Wednesday’s closing price. That has all the earmarks of a value trap. Second best is Tuesday Morning Corp. (NASDAQ: TUES), followed by Costco Wholesale Corp. (NASDAQ: COST) in the third spot.

Apparel Stores

The best performing clothing retail over the past five years is Francesca’s Holdings Corp. (NASDAQ: FRAN) which has posted an EPS gain of more than 80% in the period. Chico’s FAS Inc. (NYSE: CHS) has posted EPS growth of nearly 42% over the period, with DSW Inc. (NYSE: DSW) and Express Inc. (NASDAQ: EXPR) both posting growth of around 40%.

Over the past 12 months, L Brands Inc. (NYSE: LB), owner of Victoria’s Secret, Pink, Bath & Body Works, and other stores, posted 68% EPS growth. Cato Corp. (NYSE: CATO) ran a close second, with EPS growth of 63%. L Brands has a forward P/E of 21.66 and a consensus price target of $92.67, implying a gain of 1.5% based on the most recent closing price. Cato’s forward P/E is 19 and the company’s consensus price target is $40.00, indicating that shares are fully valued at a closing price of $43.39.

ALSO READ: Forget Sears Earnings, It Is All About Future REIT Structure

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.