Walmart, Target results could put this earnings season to the test. What analysts are saying on retailers
Some of the largest retailers report earnings this week. Here's what Wall Street is expecting.
TL;DR
- More than 91% of S&P 500 companies have reported Q2 earnings, with 84% exceeding expectations.
- Home Depot reported positive results, but concerns remain about the K-shaped economy affecting lower-income consumers.
- Retail sales fell in July, marking the first decline in nine months.
- LSEG expects a 67% growth in its U.S. Retail and Restaurant Q2 earnings index, with broadline retail seeing a 231% jump.
- Analysts advise selectivity, focusing on companies with unique growth drivers, such as Amer Sports, Bath & Body Works, Ross Stores, and Victoria's Secret.
- Walmart's earnings are highly anticipated, with analysts expecting a beat on EPS but noting potential headwinds from a slowdown in comparable store sales.
- Target is undergoing a turnaround effort, with expectations high for its upcoming earnings report, focusing on the durability of recent traffic and sales gains.
- Analysts are divided on Walmart's short-term prospects due to its grocery-heavy mix but positive on its long-term drivers like market share and flywheel metrics.