Target (NYSE:TGT): The discounter is the fifth largest retailer in the world, after Walmart (NYSE:WMT), CVS (NYSE:CVS), Walgreens (NASDAQ:WBA) and Home Depot (NYSE:HD). While Walmart has traditionally been a direct competitor for Target, it’s Amazon (NASDAQ:AMZN) that is now becoming a bigger threat. Over the past 8 quarters, sales growth has progressively decelerated to its current position in negative territory. Target has taken on a number of initiatives to reignite growth which include more promotional campaigns and expanding its online capabilities. The company has fortunately found strength in its signature categories: Style, Baby, Kids and Wellness. As Target continues to emphasize these segments, and the aforementioned ones, sales should start to pick up.
Lowe’s Companies (NYSE:LOW): Home Depot kicked things off with results that beat Wall Street estimates, but fell slightly below what the Estimize community was expecting. Despite increasing full year profit guidance, the stock is still down on the day. It won’t be surprising to see a similar reaction today if Lowe’s misses the crowd consensus. The broader recovery in the housing market and gains from its omni channel initiatives should provide a large boost to growth for the quarter, as well as the recent buyout of RONA (TO:RON_pb) which strengthens LOW’s position in the Canadian market. Historically this stock moves up an average of 4% in the 30-day, post-earnings period.
American Eagle Outfitters (NYSE:AEO): After a tough few years, American Eagle has finally started to turn things around. Last quarter saw strong growth across its key brands. Consolidated comparable sales grew 6%, supported by a 36% increase in its Aerie brand and 4% growth in core American Eagle products. The American Eagle portfolio of established brands should continue to reach its target customers, led by its Aerie Brand. Additionally, the company has widened its global footprint after seeing strong profitability in international markets. Just ahead of its report, Deutsche Bank (DE:DBKGn) upgraded the stock to buy from hold citing strength in women’s merchandising, upside at Aerie, improvement in the men’s segment and online acceleration.
Staples (NASDAQ:SPLS): In May, a U.S. judge blocked Staples proposed merger with rival Office Depot (NASDAQ:ODP) and any hopes of dragging revenue out of the gutter. The company has turned negative sales growth in each of the last 8 quarters. The rising popularity of online retailers, specifically Amazon, has been the biggest contributor to the slowdown. It has also forced Staples to introduce more frequent discounts and expand its omni channel capabilities. The stock typically doesn’t react well to earnings, and is down 35% in the past 12 months.
The Children’s Place (NASDAQ:PLCE): Children’s Place has been on a hot streak in the past 2 quarters. In each of those quarters they topped expectations by a healthy margin. This comes after years of reporting decelerating earnings and negative revenue growth. Its turnaround has been built on four strategic initiatives: superior product, technology, growth through alternate channels and store fleet optimization. The success of these initiatives have and should continue to drive comparable store sales and margins.