Betting on Wayfair (NYSE: W) is a long shot with a big payoff, while owning Walmart (NYSE: WMT) offers predictability at the expense of big gains. Walmart is, of course, the world's biggest brick-and-mortar retailer, managing more than 10,000 locations in 24 different countries. Walmart says 90% of the U.S. population lives within 10 miles of one of its stores.
Beyond an initial $500 million of annual cost cuts, management is looking for hundreds of millions of dollars more in an effort to break even.
Shares of retail stocks including Gap (NYSE: GPS), Wayfair (NYSE: W), and Nordstrom (NYSE: JWN) were all falling today after a disappointing earnings report from Target (NYSE: TGT) cast a pall over the discretionary retail sector. Target is seen as something of a bellwether in discretionary retail as it's one of the largest retailers in categories like home goods and apparel, and it draws customers from a wide range of demographics. With Gap and Nordstrom's third-quarter earnings reports not yet out, investors seemed to take a dimmer view of those retailers, especially since they've underperformed Target in recent years.