Wednesday will be another busy day of retail earnings.
Lowe’s report ahead of the market open comes on the heels of rival Home Depot’s (HD) weaker-than-expected results Tuesday morning. Home Depot misses top line estimates, but beat profit expectations. The company lowered its guidance on tariff concerns. Much like Home Depot, Lowe’s faces the same pressures as another round of tariffs on Chinese goods is set to go into place September 1. Analysts aren’t anticipating a rosy quarter for Lowe’s. Among tariff woes, Lowe’s is likely facing inventory growth, lumber deflation and margin pressure. Gross margins in the second quarter are expected to have fallen by over 200 basis points to 32.2%.
Lowe’s is expected to report adjusted earnings of $2.01 per share on $20.95 billion in revenue, according to data compiled by Bloomberg. Same-store sales, a key metric for retailers, is expected to have risen 2.4% during the second quarter.
Target’s report comes on the heels of Walmart’s better-than-expected results last week. Target’s e-commerce performance during the quarter will be in focus. Walmart reported that it saw a 37% jump in online sales during its most recent quarter, as it continues to see strong growth in e-commerce. The big box retailer is also expected to see a bit of a boost in same-store sales growth thanks to the Toys “R” Us and Babies “R” Us closures. Nevertheless, Target, like its peers, is not immune to the tariffs. Investors will be paying close attention to anything management says about the tariffs.
Analysts polled by Bloomberg are expecting Target to report adjusted earnings of $1.62 per share on $18.25 billion in revenue during the second quarter. Same-store sales are expected to have risen 2.9% compared to 6.5% growth in the same period last year.
Finally, department store Nordstrom will report results after the market close Wednesday. Unlike big box retail, department stores have been struggling, and Macy’s report last week didn’t quell concerns among investors about the broader group. Analysts are predicting that Nordstrom’s second quarter earnings fell 17% from last year, and same-store sales are expected to have fallen 2.2%. Weak full-price sales have plagued Nordstrom over recent quarters, and analysts predict the trend will have spilled over to the most recent quarter. Investors will be paying close attention to management’s comments on the annual anniversary sale.
Nordstrom is expected to report adjusted earnings of 75 cents per share on $3.85 billion in revenue. The options market is implying a 11.5% move in either direction following Nordstrom’s results.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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