Gap, Macy's, and Foot Locker shares soar after a record rebound in retail sales

• Retail stocks jumped on Tuesday after new data showed industry sales jumped a record 17.7% in May.
• Kohl's, Macy's, and Nordstrom stock surged more than 8% after department-store sales rose 37% last month.
• Ralph Lauren, Foot Locker, Gap, and other apparel stocks also soared after clothing and related accessories skyrocketed 188% in May.
• However, analysts warned there won't be a complete recovery anytime soon.
• "A full rebound is well into the future, as fears of new outbreaks remain high and social distancing measures will limit full opening of shops and restaurants," said Dr. Kerstin Braun, president of Stenn Group.
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Retail stocks soared on Tuesday after the Commerce Department reported a record 17.7% surge in retail sales in May.

Investors sent shares in Kohl's, Macy's, and Nordstrom up more than 9% as they cheered a 37% rise in department-store receipts last month.

They also celebrated a 188% increase in sales of clothing and related accessories in May by bidding up a swath of apparel stocks.

Abercrombie & Fitch, American Eagle Outfitters, Express, Foot Locker, Ralph Lauren, Urban Outfitters, The Gap, Victoria's Secret-parent L Brands, and Tapestry — which owns Coach and Kate Spade — were all up between 3% and 8% as of 10.50 a.m. ET.

Those gains easily outpaced a 2.1% gain for the S&P 500 benchmark index.

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While the retail rebound is good news for the US economy, the scale of the sales increase partly reflects record declines in March and April as lockdowns and coronavirus fears hammered foot traffic.

Analysts welcomed the recovery but warned that retailers face several challenges in the months to come.

"Retail sales in the US came roaring back in May, by much more than expected, as lockdown was eased and people returned to work," Neil Birrell, investment chief at Premier Miton, said in a morning note.

"A full rebound is well into the future, as fears of new outbreaks remain high and social distancing measures will limit full opening of shops and restaurants," Dr. Kerstin Braun, president of Stenn Group, said in a morning note.

"Mad Money" host Jim Cramer highlighted the same challenges earlier this month.

He argued that big retailers such as Costco will gain an even greater advantage over smaller rivals because they can more easily enforce mask requirements and their stores are larger, so customers will feel safer shopping with them.

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