There is still a group of US companies that have to report second-quarter earnings as the season ends: large retailers.
Overall, the industry was among the big winners as consumers accelerated their shift to online shopping in the wake of the coronavirus pandemic and subsequent government-imposed lockdown measures.
Not surprisingly, retail-related ETFs are trading near their best-ever level, with the SPDR® S&P Retail ETF (NYSE 🙂 up about 92% since its March low, compared to gains of about 52% compared to the last century. same period.
Ahead of their upcoming quarterly results, we highlight three of the best performing names in the industry who have proven to compete successfully with Amazon (NASDAQ 🙂 online. We are also adding one seller to be completely avoided as shoppers stay away from busy shopping centers.
1. Walmart : August 18 reports before markets open
Estimated earnings per share: -2.3% on an annual basis
Estimated revenue growth: + 3.5% year on year
Walmart (NYSE 🙂 has been a strong player in the retail space in recent months, with stocks up about 28% from their March low, largely due to the rapid growth in e-commerce and online sales amid of the ongoing coronavirus pandemic.
Shares of the Bentonville, Arkansas-based company – which hit a record high of $ 134.12 on July 15 – ended Tuesday at $ 130.20, representing a valuation of $ 368.7 billion.
The largest brick-and-mortar retail store in the world, whose revenues and revenues are easily in the first quarter, is expected to report earnings per share of $ 1.24, compared to earnings per share of $ 1.27 for the same period. years earlier. Revenue is expected to grow about 3.5% year-on-year to $ 135.03 billion, driven by increased online sales.
As such, investors will pay close attention to the growth of Walmart & # 39; s e-commerce numbers, which rose by a record 74% in the previous quarter. The company announced in its first quarter earnings report that food pick-up and delivery for food and other consumables reached record sales volumes.
Comparable store sales, which are up 10% in the first quarter, will also matter. Walmart has delivered over five years of growth in the US, unmatched by any other retail chain.
2. Best Buy: Reports Aug. 25 before markets open
Estimated earnings per share: -7.4% on an annual basis
Estimated revenue growth: + 0.4% year on year
As with Walmart, the shares of Best Buy (NYSE 🙂 have benefited this year from strong growth in e-commerce revenues. In the past 12 months, the giant US consumer electronics retailer has seen its inventory increase by 64% as it is still one of the few electronics stores still thriving amid growing competition from Amazon.
Shares rose to a record high of $ 105.57 yesterday before settling at $ 104.12, giving the Richfield, Minnesota-based retailer a market cap of $ 26.9 billion.
Best Buy is scheduled to publish second quarter results ahead of the opening bell on Tuesday, August 25. By consensus estimates, the tech gadget seller should post a profit of $ 1.00 per share, slightly lower than the $ 1.08 earnings per share in the. Sales are expected to be $ 9.58 billion, up from sales of $ 9.54 billion in the same period a year earlier.
In addition, investors will be keen to see if ongoing investment in Best Buy's online business continues to pay off after domestic online revenues surged over 155% in the first quarter to $ 3.34 billion.
In a promising sign, the company announced last month that online sales more than tripled in the current quarter through July 18, with an increase of 255% due to skyrocketing online demand for computers, tablets and other home working . equipment
3. Dollar General: Reports August 27 before markets open
Estimated earnings per share: + 36.7% on an annual basis
Estimated revenue growth: + 17.9% year on year
Dollar General (NYSE 🙂 is the largest discount store in the US, with more than 15,000 stores in 44 states. The Goodlettsville, Tennessee-based company, which sells groceries, household items, and personal care products at discount prices, has seen its stock rise about 53% since it hit a recent low in March.
The stock, which hit an all-time high of $ 197.23 on August 5, ended Tuesday at $ 191.09, giving the discount chain a market cap of approximately $ 48.1 billion.
Dollar General reported in late May. The consensus calls for earnings per share of $ 2.38 for the second quarter, which is an increase of about 37% year-over-year. Revenues are expected to increase nearly 18% from the same period a year earlier to $ 8.23 ??billion, driven by the booming demand from grocery and household goods customers.
In addition, investors will focus on Dollar General's update on same-store sales, an important retail metric that measures sales performance per store. Sales were up 21.7% in the last quarter, the most significant increase in at least 14 years.
Stock To Avoid
Kohl & # 39; s: Reports August 18 Before Markets Open
Estimated earnings per share: -163.2% on an annual basis
Estimated revenue growth: -27.8% year on year
In stark contrast to the strong annual performance seen in the other three names mentioned, Kohl & # 39; s (NYSE 🙂 stock has been stuck in a downtrend for most of 2020 as it struggles to find new find ways to convince shoppers.
The Menomonee Falls, Wisconsin, department store salesman, which owns more than 1,100 stores nationwide, has lagged behind its competitors in ramping up initiatives such as online sales and in-store takeout options.
Shares, which are down more than 54% since the beginning of the year, closed at $ 23.24 last night, yielding a market cap of about $ 3.6 billion.
Kohl & # 39; s reported one for the last quarter. Consensus calls for a loss of $ 0.98 a share for the second quarter, compared to earnings per share of $ 1.55 in the same period a year ago, reflecting the struggling department store seller's rising costs in his efforts to combat the negative impact of the coronavirus outbreak. Revenue is expected to decline nearly 28% from the same period a year earlier to $ 3.01 billion.
In addition to the top and bottom line numbers, investors will keep an eye on Kohl's update to its online sales figures. Kohl & # 39; s announced in its first quarter earnings report that online sales were up a total of 24% as the chain limited its operations to its app and website amid government-imposed lockdowns.
