Retail ETFs In Focus Post Q1 Earnings

Image: Bigstock

The overall earnings picture for the retail sector this season has been solid. Total earnings from 64.7% of the sector’s total market capitalization reported so far are up 61.2% on 12.7% higher revenues, with 90.9% beating EPS estimates and 81.8% beating top-line estimates. The growth pace and earnings surprise are well above the four-quarter average while the revenue beat is slightly lower than the four-quarter average.

Robust earnings were driven by cheap money, rapid COVID-19 vaccination, and business re-openings that spurred consumer spending, leading to an increase in retail sales. As such, most of the traditional brick-and-mortar retailers came up with stronger-than-expected results with a both a top and bottom-line beat though a few lost in terms of share value.  

Let’s dig into the details of some of the earnings releases.

Earnings in Focus

Big-box retailer Target (TGT - Free Report) jumped 7.4% following the earnings announcement. It topped the Zacks Consensus Estimate for earnings and revenues by $1.43 and $1.9 billion, respectively. The company has surpassed earnings estimates every time since the October quarter of 2018.

On the other hand, the world's largest retailer, Wal-Mart (WMT - Free Report) topped earnings estimates by 47 cents and revenue estimates by $7 billion. While the solid trend toward online shopping is expected to continue, demand at brick-and-mortar stores will also rise as more Americans get vaccinated and move freely. Share price of WMT rose 2.2% in response to its earnings announcement.

The second-largest home improvement retailer, Lowe’s (LOW - Free Report) beat estimates for earnings by 63 cents and revenues by $763 million. The stock inched up 0.3% in response to its earnings announcement. Meanwhile, shares of Home Depot (HD - Free Report), the world's largest home improvement retailer, plunged 1.7% in response to its earnings announcement. Earnings per share of $3.86 surpassed the Zacks Consensus Estimate of $3.04 while revenues outpaced the consensus mark by $2.6 billion.

1 2 3
View single page >> |

Disclosure: contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.