We’ve got some of the biggest and baddest retail giants releasing their Q1 reports this week as this outstanding earnings season comes to an end. I expect to see some solid forward guidance for brick-and-mortar retailers as the US economy swiftly reopens and foot traffic begins to pick up. You can see analyst expectations from the most important reports to watch out for this week in my chart below.
There have been some notable share price movements for stocks reporting tomorrow. Macy's (NYSE:M) M shares have had a massive 2-day rally of 14% on Friday and another 6% today going into these quarterly results as traders bet on strong full-year guidance following the CDC's announcement that masks are no longer required for those that are vaccinated.
This is a dark contrast to what we see with Home Depot (NYSE:HD) HD shares, which had been a big beneficiary of the pandemic. Home improvement projects were booming throughout the pandemic, and Home Depot swooped up that demand being one of the few retailers to remain open. This outstanding secular performance by HD was illustrated throughout the lockdowns, with record quarterly results in Q2 of 2020 (the depth of the pandemic). HD is down 6.5% from its high just one week ago as investors book profits going into tomorrow morning's earnings report.
Walmart (NYSE:WMT) WMT is 9% off its all-time high, which it hit on the first day of December, and has lost a lot of momentum in recent months. WMT's 50-day moving average dipping below its 200-day moving average (aka the death cross) at the end of March. Investors are hoping tomorrow's earnings will lift WMT out of this trading glut. My upside share price expectations for this report tomorrow are low, with its past 6 quarterly releases resulting in negative price action.
Dillard’s Results Signal Strong Q1 For Department Stores
Dillard's (NYSE:DDS) DDS reported an absolute blowout quarter on Thursday with record profitability to kick off this retail earnings season that has sent DDS up over 40% in the past two trading days. The company announced it would be implementing a $500 million stock buyback program and reinstated its dividend.
This is a positive signal for other department stores reporting this week like Macy's M, TJX Companies (NYSE:TJX) TJX, Kohl's (NYSE:KSS) KSS, and Ross Stores (NASDAQ:ROST) ROST.
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The Home Depot, Inc. (HD): Free Stock Analysis Report
Walmart Inc. (WMT): Free Stock Analysis Report
Ross Stores, Inc. (ROST): Free Stock Analysis Report
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Macys, Inc. (M): Free Stock Analysis Report
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Dillards, Inc. (DDS): Free Stock Analysis Report
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