Retail stocks hammered as coronavirus cases spike throughout the U.S.

Yahoo! Finance Editor-at-Large Brian Sozzi joins The Final Round to discuss how the retail space is reacting to the coronavirus outbreak.

Video Transcript

- I want to bring in Brian Sozzi right now, as you were just talking about what's happening with retail and this possible idea on 15 days, maybe getting people out there. Brian, what are you seeing in the retail landscape today? I mean, it's still messy. There's-- got a green arrow on Amazon.

BRIAN SOZZI: Well, I think that's all the good news you're going to find today, Jen. More doom and gloom here to report. You had S&P drop the hammer on the ratings and the outlooks for [AUDIO OUT] and Kohl's and Macy's and these stocks, both of them, are getting slaughtered. Let's keep in mind, a lot of leverage on that balance sheet. A lot of debt, a lot of debt coming due. And I also want to highlight Nordstrom. This company just [AUDIO OUT] spent big bucks to open a giant flagship store in New York City late last year, and they're not essentially earning any return on that business right now. That is a big red flag.

I'm just looking at Macy's, just trolling around on the Yahoo Finance premium site. The stock now trades for about 4 and 1/2 times forward earnings. That's insane. Market cap, $1.5 billion. This is Macy's. It's just remarkable to see this stuff. And I think the market is saying this-- these companies are not going to have a spring season. And they very well may not have a very good back-to-school season. These are the two most important seasons for retail. They will have a holiday season, but maybe not as well as a lot of people think.

I will also add this. Looking at the estimates on Macy's this year, earnings estimates $1.95. I think Wall Street is out of their darn mind to think if a Macy's can earn $1.95 in earnings this year. I would suspect major reratings for earnings estimates are coming for retail over the next couple of weeks. And they could be absolutely shocking.

- Brian, do you think that we're going to have bankruptcies anytime soon?

BRIAN SOZZI: Some of these debt maturities-- you know, I mentioned Macy's, I mentioned Nordstrom, some of those debt maturities [INAUDIBLE] but debt is coming due this year and next year. They have a lot of leases that they have to pay that they're trying to get out of. They can't do it. You look at Gap, they're trying to close hundreds of stores. But if you're a mall owner, yeah, you want to do what you can to keep Gap in business, but you want to get paid, too. So this is a very tough time for retail, and I think a lot of these retailers are trying to keep their workers on board. But they-- that may not necessarily be the right thing to do if they want to keep the lights open for much longer.