Target, Walmart and Home Depot: Market Movers

Walmart earnings reports explained as US we reflect on three major reports from Target, Walmart and Home Depot.

Video Transcript

00:00 Speaker A

Okay, for market movers, we're going to focus on the big big box retailers. Now that we've heard from the three biggest this week, Walmart, Home Depot, and Target. Well, let's recap what we heard from Walmart, the world's largest retailer just a few moments ago and see how its shares are doing in the pre-market. As you can see, shares are down around 1% in the pre-market. Now, as I said earlier, revenues beat on expectations, but earnings per share missed at 68 cents. The market was expecting 74 cents. The share price though ticking closer to the flat line there though. Now, Walmart actually raised its full year sales guidance and it has an opt and gave sort of an optimistic signal about what they thought the how the consumer's feeling about purchasing. And that's despite rising concerns over inflation and possibly some some weaker economic data that we've seen recently as well. In fact, over the year, shares are up over 13% for Walmart. The S&P as a whole is just up 9%, but since liberation day back in April, the stock is up over 25% as you can see there. Now, the retailer has paid a lot of attention to its low price strategy in order to offset any uncertainty that's come about as a result of tariffs and also as households have become more cautious when it comes to their budgets. Okay, let's move on to Home Depot. Now, early in the week, it kept its annual forecast intact despite posting muted quarterly results on Tuesday. Both revenue and earnings per share just missed the mark. On results day, its shares actually gained 3% as you can see there, but have paired back some of those gains since. But the retailer did say that some products may see small price hikes due to tariffs after previously suggesting they would generally not change. The top US home improvement chain is betting that customers will continue to spend on smaller scale maintenance projects and that demand from professional contractors will stay strong in the second half of the year. Less clear is when the stalled US housing market and major home renovations that require financing will start to pick up. Now Home Depot, which sources more than 50% of its products from the US, said there would be modest price hikes in some imported goods that currently face higher tariff rates than what it had anticipated back in May, when the company said it would generally maintain pricing, but that some items could disappear from shelves. Finally, let's move on to Target. And the story here wasn't really about their poor results, but the change at the top. Its shares fell over 6% yesterday after the company also named Michael Fidelki as its next CEO. Now Fidelki was the retailer's CFO. So, no change, he's internal higher. Okay. The results weren't as shockingly bad as the first quarter, but the retailer is still struggling to find its place in the new economic norm of more discerning shoppers. Now, Target's second quarter earnings narrowly topped consensus forecasts, as it wrung out cost savings. The company also maintained the full, its full-year outlook it slashed three months ago. But headwinds from a pressured US consumer, an influx of tariffs from the Trump administration, market share loss to rival Walmart, and operational challenges are clearly quite apparent.

查看留言