Everybody is trying to pick the bottom and its not working out so well. The proof is in what you get, right . What you get is when you find these earnings out and find out where they are, you look at somebody like macys. When you miss on the revenue as badly as they did, scott, they call themselves a transitional stock and they are. But they are still a ways away from the transition that they need to make to be competitive. Thats the problem they have got right now. When you look at look at those numbers. The same store sales numbers. Those were almost double as bad as expected. Its unbelievable how difficult it is right now in retail when youre not amazon. You want to talk numbers, doc. Sure. You saw macys is down 14 . Rubbing some salt in the wound, judge. Kohls down 6, nordstrom 7, macys 8. You can go down the list. Dillards 12. Overall retail sales are up but not at the retailers you named, judge. When we talk about easy comps and tough comps on the show all the time. These guys, macys, coming off a year ago quarter when the samestore sales were down 6 . Now they come out down 5. 25 or Something Like that. This was just a terrifically bad quarter. Obviously i and anybody else who had calls into this thing just saw them get flushed. The only good news there is stocks down almost 4. And the options you could only lose what you paid for them, 40 cents or whatever. Its a giant slap in the face. It is. To anybody who thought that retail had bottomed or was close to bottoming. Look at these declines today. But it doesnt say bad things about the consumer. Its just ugly. Some people are going to want to read through and say im not saying thats what youre saying. I dont think were doing that. Overall retail sales are up, but the problem is that theyre up of course at amazon, we know that. Look at how that stocks done. But theyre up in a lot of stores other than these. These big ones right here. And the lesson here, just stop trying to pick a bottom. You cant pick a bottom. The floor keeps getting lower and lower and lower and lower. Focus on the stores that do well. They really need to get rid of most of the stores that arent doing well. Its taking longer than people expected. Hence you get samestore sales declining because some stores arent doing well at all. Focus online and what stores you have. If i said what retailers would you buy here . Jim might say, look, pennys is still the one. Would you buy any of these apparel names, Big Box Department store . Youre going to get earnings over the next couple of days. No. Youve got a secular condition thats challenging all of these brick and mortar retailers. Ultimately its about selling off Square Footage. That is where this has to go. Who are the buyers on the other side of that . What do they do . I keep hearing about we want to create destination experiences. I dont know what that means. Do we just go to open bowling alleys all over the United States . Im not sure. Driving ranges. Even target. Target is down 21 year to date, down 3 . So i think this is a Square Footage problem more than anything else. I also think its going to bleed into other parts of the market. Keep in mind, retail is nearly 10 of the high yield market. So retail is going to replace looking forward. Energy is the contagious in the high yield market. But the discounter, when we talk about these names and look at the next level and look at tjx or ill give you burlington. Thats a name we never bring up, ross stores. When you look at discount, thats when people are making Great Strides and theyre building themselves out in a different way. Obviously when you talk about tjx, home goods and where are people spending their money. You can see that the way home depot is coming off its highs. You look at lowes and where people are spending the money, scott, its in the home. You remember that day, at this point its probably eight weeks ago if not further back when we had matthew boss, jpmorgan on, and hes the number one retail analyst. We asked him point blank, is there a single retail or apparel stock or Department Store that you would recommend buying right now . And he couldnt find one. Right. Even as other people try to find and pick bottoms in this space. Theres nothing that you would buy here . Kate spade, when youre talking about coach and kate spade potentially, you know, what that could be. You look at somebody like what ive touted time and time again on dips and thats raufl laurlp. I like that one buying it on dips. When you look at that or l brands, two of the stocks i would focus on there, they have both had some nice pops, even though theyre down hard from some of the recent highs. You dont want to chase them at the higher lows. I agree with the l brands, you buy it on the dips, like today. Victorias secret, great brand. You have to be very careful because the bottom is not there and you can slowly leg in. On days like this, if youre going to get aggressive maybe the next question is where is the bottom, right . This is like the carnival ride where you stick to the wall and the bottom falls out and you feel nauseous quickly. The bottom is for someone like a bill ackman thats going to be able to buy the retail Square Footage. The bottom is the retail opportunity for an institutional investor. Not to be sarcastic, we always say, yeah, theres a retailer, its amazon. Besides amazon, myself, ive done a poor job point out, alibaba isnt another alternative beneficiary besides amazon to this ecommerce move that we see and obviously its globally exposed. I think 120 today, nearing its alltime high. Baba and amazon together, theres your retail opportunity. Were not even discussing the fallout in other areas, some of these the ggps, simon properties. We could throw up those stock as well. Thats where the leverage comes into play as well because they have to go back to the market to get new capital and that could cause but those two you mentioned, judge, simon property, spg looking at them right now. The stocks have been battered, they should be battered, but they have class a space. So there is a value beyond just the mall in these spaces because they are close to city centers, theyre in, you know, great zones. There are a lot of bs and c that you dont want to touch. They dont even bother to tear those down if those malls go out. Lets talk about retail but as it pertains to groceries. I want to bring new reporting about whole foods and its move to shake up the board. Yesterday the Company Announced that it was removing seven people from the board and nominating five new directors. Whole foods has been battling with jona partners over its future. Jona is pleased with the shakeup, however, its skeptical with the companys plan to address its operational issues. Theyre concerned about nominees and their lack of grocery market experience, also the lack of input they have in the new plan that whole foods is trying to roll out. They rejected an offer of two of its nominee because it would have had to agree to a standstill agreement until 2019. The company didnt want to be muzzled for that long. They are keeping all of their options on the Table Including calling a special meeting to push for its own slate of poubo nominees. I know youve owned this stock in the past. Im still in it right now. I took off half today, actually. But we talked about april 18th, we saw huge activity in there just before all these rumors of somebody potentially buying them and all these names started floating out there. I think it was more attached to the idea of how much percentage in terms of where Jana Partners numbers were and where some other investors really were when they started to make moves in here. When you look at this company, scott, they just have not figured it out. I think jana is correct on this. Seven straight quarters they just continue to see declining sales. Thats a real problem. I think a lot of that is because of the fact they went right after the grocery stores, of course. But the grocery stores, when you go into a krogers, they all have their natural section now. They all have their whole foods part, and its getting bigger and bigger. Thats making it much more difficult for whole foods to be able to compete there, and thats why you wonder if jana at some point doesnt press it a little harder saying, hey, look, we need to do something and thats not necessarily in the store itself. The older stores have negative comps. Secondly pricing pressure. Commodity prices have been going down and down and down. They cant raise prices and people are saying well go to other stores and they cant keep the margins up so thats what youre seeing. So the stock is up 20 year to date. You know, you guys may be the commentary is a little more negatively bent. Wells fargo out with a note today, they reiterate their outperform, 42 price target. The company is talking a good game but this time its serious. The new proactive approach to change is a good thing. Are you guys giving it enough credit . Stock has moved. I think the stock is rightfully valued where it is right now. Basically youre believing that there is going to be some form of a turnaround for this company. It probably didnt belong at 30, it probably doesnt belong to be at 45 any time quickly. This is probably the right price and you want to see the company not only hit on the competition challenges that theyre facing as pete is point out. Every store right now offers what whole foods offers. But i think the experience too has deteriorated. Its a name that i have owned in the past. Its a store that i frequent. And youre talking about stores. You go to a store, its crowded, its crammed and doesnt give the presentation that it did when it first was presented to the customer. Thats the fine line, because it used to be the starbucks experience. Starbucks has been able to maintain that. Whole foods is declining. If theyre going to cut costs, you might see more of that experience taken away. Do you own it because you think that jana is taking a wait and see . It could call for a special meeting, it could go to an annual meeting and get more aggressive. The company could get sold, right . Theres been chatter around that over the last many weeks. Why not own it for all of those reasons . And if you do, youre owning just the options in there, scott. I think thats why somebody went out and bought as many options as they did. If time goes on and nobody has called for that type of meeting, whats going to happen to that stock . They report another quarter where they see the samestore sales go down again, the stock will start to pull back. When you looked at that big jump that they showed a minute ago on the chart, that jump was the second everybody found out about Jana Partners and that 9 stake. Its not like they put a bunch of hacks on the board. No. Either. Ron shake, they got operators and people people from best buy. Yeah. They got people who know the retail and maybe the food business, its just according to my sources, jana looks at the list and its like wheres the grocery experience. If theyre trying to overhaul and turn around their business, why dont they have people on the board who have credibility in that particular part of the industry. Thats a fair point. I mean its a fair point. Its accurate. And i think maybe to petes point, its why you dont get very aggressive right here with the stock at 37. This isnt something that appears to be imminent in terms of a turnaround strategy. This is something that really is going to take a lot of work, a lot of time, a lot of effort and really a lot of fight on the part of the activists to get the company to move in the right direction. We did reach out to whole foods for a statement. We havent heard back. If we do, well let you know. Heres what else is coming up on the Halftime Report. A snapback for snap stock. Shares sink after earnings. One analyst says the pain is just starting. Plus, cheaper than ever. Thats what bank of america calls one unloved sector. The details and the trade, next. Before the break, how the rest of retail reacts after macys drops 10 in a day. Our data partners at kensho show within five days, nordstrom and j. C. Pennew also falls hard. Target also drops. The s p Retail Sector falls 2 within five days after a big macys drop. My business was built with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. With it, i earn unlimited 2 cash back on all of my purchasing. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Which adds fuel to my bottom line. Whats in your wallet . What . Pony neighing] hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at td ameritrade. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Welcome back to the Halftime Report. That is one chart of the day for sure, snap plunging after releasing its first Quarterly Results since the ipo. Global daily active users missing estimates, revenue short. This as the Company Faces competition with facebooks instagram. Doc, you bought it after hours yet. I did, because i was losing so much money on the calls that i still own so i thought let me throw good money after bad. No, thats not what i did. I did buy in the after hours last night and it could have been good money after bad, but i mean i took people like david tepper at his word. I thought there were a lot of people who right around that 17 level would come in. I didnt buy it at 17 of course, bought it at 17. 38 or Something Like that. But i thought this was an opportunity to get in for a trade, scott. The numbers you talked about were horrific. The growth rate stopped, it virtually stopped, and thats because facebook ad nauseum we heard, everybody has been attacking them. However, i thought the fear would drive people into puts, which i sold this morning, so ive been eating away at that loss that i took on this trade, but overall i dont want to own this thing for the long term. Im the opposite of josh or of david tepper in that regard. Some people seem to be put off by what they perceived to be arrogance from evan spiegel on the call. Jim cramer today, i think he said it today, quote, he needs to be hazed. Yeah. The yahoo google stuff. One of our producers talked to Ross Levinson who had been high on the company and two founders who said this was so poorly managed that theres no way you should have had this kind of a disaster on your first Earnings Report. Except for the fact that they were decelerating before they ipoed. They were decelerating in terms of the growth factor. You look at zuckerberg going right after them aggressively. 3 billion. Obviously they did well because it was a heck of a lot bigger number when they ipoed. When you look at the money they hemorrhaged from the ipo and people taking money out, all of that, unbelievable numbers. So when they came in and the report that came out and then to still have some arrogance about yourself, thats a pretty interesting way to approach it. I think one of the things you have to be really careful about, facebook has all the money they want to keep on growing instagram, messenger. The more snap spends on r d, the more its going to hurt you in the next earnings. So facebook has a ton of Free Cash Flow and snap has to be really careful about earnings. Lets show you this wall graphic that we have because snap is in good company when it comes to laying an egg in your first publicly traded your Earnings Report as a publicly traded company. Twitter down 24 , facebook down 12, linkedin down 10. Are we hyperventilating over a company in its public infancy . When they talk about losing a billion dollars or even more, judge, and they said but thats, you know, really nothing. Thats crap. I mean people looked at that and said that is that arrogance youre speaking to. Its kind of like when zuck was Walking Around with a hoodie. When was the last time you saw him in a hoodie in front of the cameras . Hes not doing that anymore, because you come across as both arrogant, i dont care, you guys dont want to buy my stock, dont buy my stock. Thats going to drive that thing to zero when you act that way. But i think spiegel can recover from this. I agree with Ross Levinson that if he grows up and does a more grownup Conference Call next time if ross was here, he would say, all right, they need to build a team. This is huge inexperience and its showing, it spilled out for everybody to see. Goldman is out with a note today unbelievable. That says daily active user net ads accelerating, users increasing, they remain buy. You talk about arrogance. I am amazed at the Analyst Recommendations this morning. Goldman sachs is still at 27. Morgan stanley comes out and reiterates an overweight position at 28. I mean its an incredible amount of arrogance and its unfortunate because it does not it does not suggest or teach the proper discipline. Those watching the show, those watching the markets need to have around these companies. You talk about facebook and twitter. Twitter out of the gates lays an egg. Twitter has negatively performed over the time span since the ipo. Facebook lays the egg but then gives you time to get back in again, and i think those are the things as an investor or a trader you want to wait for. You dont want to be involved in snap right now until you see the fundamental turn like you saw in facebook. That could take multiple quarters. Is it never going to happen . I dont know the answer to that. There are analysts who are throwing this thing out the window. Brian is joining us now. Welcome back, its good to have you on the show. Thanks for having me. Sell call, 9 pri