As the world eases its way back to normal despite the lingering coronavirus pandemic, the economy is seeing some fresh signs of life. Last month, 4.8 million people in the U.S. returned to work. The Manufacturing ISM Index, which gauges how busy the nation's factories are, jumped back above the critical 50 level for June, bouncing from May's reading of 43.1 to 52.6. Stocks have rallied accordingly.
However, investors expecting retailers to recover as seemingly quickly as other facets of the economy may want to reconsider this outlook. Not only is consumerism still rather crimped, not even retailers are putting themselves into good position for a rapid rebound. Apparel brands Nike (NYSE: NKE) and Ralph Lauren (NYSE: RL) are the proverbial poster children for this reality, but they're hardly alone when you read between the lines.
Nike's CFO Matthew Friend said it very clearly during the company's June conference call to discuss the quarter ending in May, explaining "we modified our near-term inventory buying plans and proactively canceled pre-COVID-19 factory purchase orders for the fall and holiday seasons by roughly 30% on a unit basis."