The last group of companies to report second-quarter financial results this season are large US retailers, which are arguably the most sensitive to economic conditions and consumer spending. The sector includes several notable winners from the year so far as the COVID vaccine rollout and government stimulus checks gave consumers more confidence and more money to spend as they returned to brick-and-mortar stores.
Not surprisingly, one of the industry's leading ETFs – the SPDR® S&P Retail ETF (NYSE:) – is up about 51% since the start of 2021, easily outperforming the profit of 18% in the same period.
Below, we highlight three retailers that are expected to report impressive earnings and revenue growth as they release their latest quarterly magazines in the coming days.
1. Target
Income Date: Wednesday, August 18
EPS growth estimate: + 0.9% Y-o-Y
Estimated revenue growth: +7% Y-o-Y
Performance to date: +49.6%
Market capitalization: $130.6 billion
Target Corporation (NYSE:) — whose financial results have surpassed Wall Street estimates for five consecutive quarters — is expected to report its next profit before the opening bell on Wednesday, Aug. 18.
Consensus favors second quarter earnings per share of $3.41, which would be a slight improvement from earnings per share of $3.38 in the same period a year ago.
Revenues are expected to grow 7% year-over-year to $24.59 billion as the big box retailer continues to capitalize on its efforts to add faster order pick-up and shipping options.
The company announced on its website that sales through its "Drive Up" curbside pick-up service were up 123% from a year earlier. In-store pick-up sales rose 52%, while sales through the 'Shipt' shipping service increased by 86%.
In addition, investors will monitor comparable store sales growth, both online and in stores that have been open for at least a year. Target said its key metric is up 22.9% in the first quarter, with physical store comparable sales up 18% and digital comparable sales up 50%.
General economic and U.S. consumer health comments from executives on the post-profit conference call will also matter as Target prepares for its back-to-school period amid a resurgence of Delta cases. variants.
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Target has been one of the leading players in the retail space this year, with shares up around 50% in 2021 as it benefits from both the reopening economy and continued strength in e-commerce and online sales. TGT shares hit a new all-time high of $265.73 on Tuesday before closing at $264.07, earning the Minneapolis, Minnesota-based retailer a valuation of $130.6 billion.
2. TJX companies
Income date: Wednesday, August 18
EPS growth estimate: +411.1% Y-o-Y
Estimated revenue growth: +61.1% Y-o-Y
Performance to date: +4.6%
Market capitalization : $86.2 billion
TJX Companies (NYSE:), which owns T.J. Maxx, Marshalls and HomeGoods brands have underperformed many of its peers in the retail group, with shares up less than 5% so far amid concerns about the impact of the coronavirus pandemic on retail stores in Canada and Europe.
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The price-conscious chain – whose off-price model relies heavily on customers visiting its stores – operates a total of 4,557 stores in nine countries. Of these, 1,267 stores are located in Canada, the United Kingdom, Ireland, Germany, Austria, the Netherlands, Poland and Australia.
TJX stock closed at $71.43 yesterday, in sight of its all-time high of $74.65 on May 10. At its current level, the Framingham, Mass. based apparel and home decor chain has a market cap of $86.2 billion.
TJX, which reported excellent earnings and earnings in the United States, is expected to report its second quarter results ahead of the opening bell on Wednesday, August 18.
Analysts estimates are calling for the budget-conscious retailer to post earnings of $0.56 per share, a 411% improvement from a loss of $0.18 per share in the same period a year ago , when TJX had to temporarily close almost all of its stores in the US and abroad.
Revenues are expected to rise 61% year-over-year to $10.75 billion as US customers returned to its stores in greater numbers amid easing of pandemic-related restrictions.
As such, the focus will be on sales of comparable stores only, a modified metric that compares sales on days when existing stores were open for their same-day sales in 2019, after a 16% jump in the first quarter .
In addition, market players hope TJX will provide guidance for the coming months after it failed to formally forecast its results in the previous quarter due to uncertainty surrounding the pandemic, particularly internationally.
3. Macy's
Income date: Thursday 19 August
EPS growth estimate: + 119.7% YoY
Estimated revenue growth: +39.3% Y-o-Y
Performance to date: +71.9%
Market capitalization: $6.0 billion
Macy's (NYSE:) — which has matched or beat Wall Street's earnings and sales estimates for six consecutive quarters — reports its next financial results ahead of its opening on Thursday, Aug. 19.
Consensus calls on department store chain to post second-quarter earnings per share of $0.16, reversing from loss per share of $0.81 in the second quarter of last year, as the pandemic forced it most of its stores to close.
Revenues are expected to increase 39% from the same period a year earlier to $4.96 billion as it continues to attract new customers and consumers return to the mall to shop amid the emerging return to the shopping mall. normality.
In addition to the top and bottom-line numbers, investors will be watching Macy's update on his overall comparable sales numbers. Sales online and in Macy's stores that have been open for at least 12 months rose 62.5% year-on-year in the first quarter.
E-commerce, which has been the bright spot for Macy's in the previous period with an annual growth of 34%, will also be looked at.
In addition, market players will focus on Macy's outlook for the rest of the year after the retailer raises its profit and sales expectations in the last quarter, despite continued uncertainty due to the COVID health crisis.
Macy's was one of the star performers in retail this year, up around 72%, thanks to the rapidly recovering sales of all three brands: its eponymous chain, Bloomingdale's, and the luxury beauty retailer Bluemercury.
M shares closed last night at a six-week high of $19.34, giving the New York, New York-based department store chain a market cap of $6.0 billion.
