One of the more pervasive stories in retail lately has been the sharp drop and sustained depression of gas prices almost across the globe. With the downturn in fuel prices, though, came many predictions from retail pundits that sales would soon soar off the backs of customers in fully filled cars.
According to CNBC‘s Jim Cramer, that’s a load of hooey. Citing the poor performance of retailers like Kohl’s and Ralph Lauren, before and after gasoline prices dropped, Cramer noted that the price of gas just doesn’t appear to be as much of a factor in retail as previously thought.
“I didn’t think [Kohl’s] was as bad as it was doing, because a lot of people feel, including me, that, at a certain point, lower gasoline should help,” Cramer said on CNBC’s “Squawk on the Street.” “This, plus Ralph Lauren, tells you that lower gasoline is still not a factor. It is spotty in retail.”
Part of Cramer’s comments stemmed from the losses announced by Kohl’s on Thursday (Feb. 4). Sales rose just 0.4 percent at its stores during Q4, and after a 17 percent falloff in share prices, Kohl’s stock fell to $42 by the end of the morning — a dive that analysts expected to be cushioned at least somewhat by the perceived benefits of a depressed global oil market.
“This was a shocker,” Cramer said. “I am just blown away by how bad Kohl’s was this morning.”
While Cramer deals with the shock of the announcement, Kohl’s executives are busy with damage control and spin. The retailer adjusted 2015 earnings from earlier estimates of $4.50 to the new per share total of $3.97. However, as 2016 crawls on, Kohl’s and other retailers will have to find some scapegoat other than falling gasoline prices to pin their low sales, falling earnings and angry investors on.