Investors are discerning shoppers when it comes to retail stocks.
The clear winners appear to be big-box stores such as Wal-Mart and Target, while specialty outlets such as office supply chain Staples are bringing up the rear.
Shares of Target (TGT) rose to a new 52-week high Wednesday after it reported better-than-expected quarterly earnings and raised its forecast for full-year profits. The stock has gained 26% so far this year, outperforming Wal-Mart's (WMT) 24% rally.
Also on Wednesday, Staples (SPLS) reported disappointing earnings and lowered its profit outlook for the year. Staples stock fell 16%, dragging down shares of rivals OfficeMax (OMX) and Office Depot (ODP).
Then, there are old-school retailers like J.C. Penney and Sears. Both are attempting to remake their images for the digital age. Investors seem more confident that Sears will be able to pull off the turnaround.
Shares of J.C. Penney (JCP) are down nearly 32% so far this year as investors worry about the new pricing strategy put into place by CEO Ron Johnson, the former head of Apple's (AAPL) retail unit . Meanwhile, Sears (SHLD) stock has soared this year as the 126 year-old retailer has closed hundreds of stores and announced plans to spin-off certain brands.
Overall, U.S. retail sales rose for the first time in four months in July, edging up 0.8%, according to government data released earlier this week. But economists say the American consumer remains cautious given the lackluster job market and the uneven recovery in home prices.
But a wary consumer seems to be a boon for the big-box stores, which sell everything under the sun and have enormous pricing power.
Target said its results were driven by sales of groceries and a promotion that encourages consumers to use discount credit cards.
On the other hand, there's Michael Kors (KORS). The luxury lifestyle brand founded by the Project Runway judge of the same name recently reported better-than-expected results and signaled that it expects profits to continue rising this year.
So while consumers are apparently still looking for bargains when it comes to food, some are willing to splurge on fabulous accessories.