Saks, Macy’s, Nordstrom Downgraded: High-End Consumer Struggling?

Saks (SKS), Macy’s (M) and Nordstrom (JWN) all reach a higher-end consumer than the average department store. Citi analyst Deborah Weinswig thinks that’s a problem for the stocks as consumers deal with “Empty Pockets” for the rest of the year, even on the tonier end of the income scale. All three stocks were down more than 2%.

An index tracking high-end consumer confidence slipped to 80.7 in May from 86 in April, Weinswig notes, and department stores catering to that demographic have been showing slowing same-store sales growth in recent months. Wealthier consumers may be responding to “weakness in the equity markets,” making them less likely to splurge at department stores.

“We believe high-end spending is slowing, and we see the weakness in women’s designer apparel as a more systemic issue that will likely weigh on SSS growth ahead,” she wrote of Saks.

Weinswig downgraded all three stocks to Neutral from Buy. She lowered her price target on Nordstrom to $52 from $63; on Saks to $11 from $14; and on Macy’s to $37 from $49.