Dan Greenhaus at BTIG reports that clients are increasingly interested in what American companies have sales exposure to Europe.He notes, for example, that watch retailers got crushed 38% (!) yesterday thanks to bad sales in Europe. Abercrombie & Fitch lost 5% yesterday thanks to its European exposure. Europe exposed apparel company PVH is down 12% in recent sessions.
Given the concerns about Europe that have manifested themselves in markets over the last few weeks, we have fielded an increasing number of question from clients regarding U.S. companies exposed to the region, other than those already mentioned of course. While we acknowledge that from an economic vantage point, issues in Europe need not cause a recession here in the U.S., from an investing vantage point, there are things to be aware of. Companies with large European exposure include CCE (which gets 100% of its revenues from Europe but thanks to broader beverage strength is doing just fine YTD), PCLN (which does over 50% of its revenues in Europe and the U.K.) and a number of large/mega cap companies such as JNJ, MCD, PM, KFT and CSCO (which reports this week). What is particularly interesting, but not surprising, is that a market cap weighted basket stocks that generate revenues from Europe is barely up on the year (thanks to underperformance by JNJ, MCD, CSCO and FLIR (which cited issues at the public level here in the U.S. in their earnings report).
Via Stockcharts, here’s a look at Fossil’s brutal chart.