Here’s The Next Disaster in Retail; Hint: It’s Not JCPenney Dying

Second-quarter earnings season for a majority of apparel retailers is shaping up to be an unmitigated disaster.

The culprit is none other than the always-fickle U.S. consumer. Thanks to shoppers spending cautiously on clothes in recent months — despite a rallying stock market and low 3.7% unemployment rate — retailers of all kinds are sitting on mountains of excess inventory. Now that inventory must be worked off at profit-margin-busting prices in order to make way for the lucrative, full-price garb targeted to back to school shoppers in August and September.

That backdrop sets the stage for scores of earnings misses, lowered profit outlooks and downtrodden earnings calls with Wall Street when the retail sector begins to release results in mid-August.

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Indeed, the nervousness among investors on how bad the retail reporting season could be a result of inventory concerns has weighed heavily on numerous stock prices the last three months.

Some notable retail laggards, according to Yahoo Finance data… Yahoo! Finance

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