It's never been more clear: Brick-and-mortar retail is a thing of the past.
This week alone, Macy's (M), Kohl's (KSS), Nordstrom (JWN) and JC Penney (JCP) all saw their stock prices plummet as online retailers like Amazon (AMZN) offer cheaper and more convenient shopping experiences.
This whole story is illustrated very clearly in the eye-popping chart below from FactSet. It breaks down the year-over-year earnings growth of the 13 retail sub-industries of the S&P 500 (^GSPC).
"The Internet Retail sub-industry reported the highest earnings growth of all 13 retail sub-industries at 143.1%," FactSet's John Butters said. "Four of the five companies in this sub-industry reported earnings growth for the quarter, led by Amazon.com."
"On the other hand, the Department Stores sub-industry reported the largest year-over-year decline in earnings of all 13 retail sub-industries at -47.8%," Butters added. "All three companies in this sub-industry reported a year-over-year decline in EPS of more than 25% for the quarter: Macy’s ($0.40 vs. $0.56), Kohl’s ($0.31 vs. $0.63), and Nordstrom ($0.29 vs. $0.66)."
This trend was echoed in the April retail sales report. According to the Census, department store sales fell 1.7% year-over-year, while nonstore retailers surged 10.2%.
Amazon's success in stealing apparel sales from department stores has been a bit of a surprise as clothing is typically something a consumer would want to try on before purchasing. However, Amazon has actually been incredibly successful in the category.
"Amazon management has called out its apparel business as a key growth driver multiple times over the past few years and it is hard to deny the success the company has had to date," Morgan Stanley's Kimberly Greenberger said on Thursday. "By our math, assuming Amazon's U.S. gross merchandise value (GMV) mix is roughly equivalent to the Forrester estimated mix of overall U.S. eCommerce, we believe Amazon generated ~$18bn of apparel GMV in 2015 making the retailer the second largest U.S. apparel company."
Amazon and online retailers continue to lag in categories like groceries and home improvement. Regardless, the shift in the retail landscape is very clear.
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Sam Ro is managing editor at Yahoo Finance. Read more:
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