Retailers Report Earnings

Major retailers are set to report earnings over the next couple of weeks as the Q2 reporting period winds down. Before highlighting a list of the names set to report, below is a look at the performance of the “Bricks and Mortar” Retail index run by Solactive-ProShares since COVID hit in February 2020. Already on death’s door prior to COVID due to the “bricks to clicks” trend of shoppers ditching trips to stores for supposedly more convenient online shopping, pandemic lock-downs were supposed to be the final nail in the coffin for physical retail stores. Fast forward to today, and you may be surprised to see that brick-and-mortar retail has actually outperformed the S&P 500 by more than 50% since COVID hit. As shown below, the Brick and Mortar Retail index did fall more than SPY during the COVID Crash in February and March 2020, but the bounce back for retail was much more pronounced coming out of COVID in late 2020 and 2021. While the retail index has generally trended sideways for the last two years now, so has the S&P 500. At this point, the Brick and Mortar index is up 71.6% since 2/19/20 on a total return basis compared to SPY’s total return of 39.1%. Just when investors think they have a check-mate situation, the market always seems to have a counter move.

As shown below, more than half of the major stocks in the Brick and Mortar index are set to report by the end of August. Target (TGT) and TJX (TJX) will report ahead of the open tomorrow, followed by Walmart (WMT) on Thursday morning. Other big names like Lowe’s (LOW), Dick’s (DKS), BJ’s (BJ), Foot Locker (FL), and Ulta Beauty (ULTA) will report next week.

Looking at the table, some of the best performers in the group this year have been names like Dick’s (DKS), Lowe’s (LOW), Walmart (WMT), Ollie’s Bargain (OLLI), Signet Jewelers (SIG), and Costco (COST), while names like Target (TGT), Foot Locker (FL), Dollar General (DG), and Walgreen (WBA) have gone in the opposite direction and traded lower. Over the last ten years, three names on the list are up more than 500% — Lowe’s (LOW), Costco (COST), and O’Reilly Automotive (ORLY) — while AutoZone (AZO) is currently up 499.2%.

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Disclaimer: Bespoke Investment Group, LLC believes all information contained in this report to be accurate, but we do not guarantee its accuracy. None of the information in this report or any ...

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