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These 5 Retailers Just Crushed Q1 Earnings: What the Heck is Happening?
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Between yesterday after the bell and this morning before market open, there were a slew of retailers that reported their first-quarter results. And surprisingly, the results were strong, with some posting better earnings and comparable store sales numbers than expected.
Let’s take a look at five retailers making Wall Street very happy today.
Abercrombie & Fitch reported a loss of 72 cents per share (this number excludes 19 cents from non-recurring items) that matched the Zacks Consensus Estimate. Revenues declined 4% year-over-year to $661.1 million, but beat our consensus estimate of $653 million; total comparable store sales were down 3%. Abercrombie’s flagship net sales decreased 11% to $286.4 million, but sales at the Hollister brand increased 3% to $374.7 million.
The company is currently on the market to sell itself. Yesterday, the Wall Street Journalreported that American Eagle Outfitters (AEO - Free Report) , together with private equity firm Cerberus Capital, are teaming up to buy the struggling company. This has yet to be confirmed, however.
Thanks to this decent-but-not-terrible report, shares of ANF are up about almost 9% in mid-morning trading.
Best Buy, a popular electronics retailer, posted adjusted earnings of 60 cents per share, comfortably surpassing the Zacks Consensus Estimate of 40 cents per share and increasing 40% year-over-year. Revenues came in at $8.528 billion, also topping our consensus estimate and growing 1% from the prior-year quarter.
Total comparable store sales were up 1.6% thanks to growth in both domestic and international sales, as well as robust performance in gaming and mobile. Best Buy said that digital sales increased over 22% in Q1, a sign that the company is continuing to improve its e-commerce business and grow its audience online.
Shares of BBY were up over 17% in mid-morning trading. For Zacks' analysis on Best Buy’s earnings report, click here.
Even though mall staple Guess? reported a loss per share of 24 cents, it beat the Zacks Consensus Estimate of a loss of 31 cents, as well as management’s guided loss in the range of 33-30 cents. Net revenues came in at $458.6 million, also outpacing the Zacks estimate and improving 2.2% year-over-year. This upside was due to strong sales in Guess’ Europe, Asia, and Wholesale segments.
Overseas segments did very well for Guess in Q1. Breaking them down, Europe revenues were up 23.3% (29.1% on a constant currency basis) to $165.4 million, while Asia increased 16.9% (up 15.5% on a constant currency basis) to $63.4 million.
GES stock has gained about 15.5% so far today. Click here for Zacks' analysis on Guess’ Q1 earnings.
For the first time in nearly two years, struggling department store Sears reported its first quarterly profit thanks to the sale of its Craftsman tool business. Net income attributable to shareholders was $244 million, or $2.28 per share, compared with a loss of $471 million, or $4.41 per share in the year-ago quarter. Excluding adjustments, Sears reported a net loss of $2.15 per share.
Revenues came in at $4.3 billion, decreasing 20.3% year-over-year mostly due to lower demand for groceries, household items, pharmacy, and apparel at Kmart, as well as fewer sales of home appliances at Sears. Sales at U.S. stores open more than a year declined by 12.4%, while sales at Kmart fell by 11.2% in Q1.
Sears also announced that it’s boosting its cost-cutting efforts to $1.25 billion, up from a prior target of $1 billion, and plans to review its store fleet.
SHLD stock is soaring today, up about 25% in mid-morning trading.
Home and kitchen retailer Williams-Sonoma reported an earnings beat of 51 cents per share, surpassing the Zacks Consensus Estimate of 48 cents. Net revenues of $1.112 billion came in slightly above the Zacks estimate and increased 1.2% year-over-year thanks to strong growth at West Elm and Williams-Sonoma brands, in addition to international and newer businesses like Rejuvenation and Mark and Graham.
Total comparable brand revenues increased just 0.1% in the quarter, significantly lower than the 4.5% increase reported in the previous quarter. Comparable brand revenues for all the brands declined, except West Elm and William Sonoma. These businesses saw increases of 6% and 3.2%, respectively. E-commerce revenues were $581 million, up 0.7% year-over-year.
Shares of WSM rallied over 9% immediately after the retailer’s report was released after the bell yesterday, though the stock is now down about 0.26% today in mid-morning trading. Click here for Zacks' analysis on Williams-Sonoma’s Q1 earnings.
Bottom Line
Even though these recent earnings reports may seem like the retail industry has potentially found its footing again, that notion is pretty unlikely. Realistically, it’s a lot of retailers reporting results that were not as bad as anticipated, and investor relief is strikingly apparent.
But while many companies like Macy’s (M - Free Report) disappointed this season, there were some retailers, like Best Buy, that made concentrated efforts to turn their businesses around, with some brands even opening new stores instead of closing old locations. And, bright spots like Home Depot (HD - Free Report) and Walmart (WMT - Free Report) are showing investors that there is still hope against a giant like Amazon (AMZN - Free Report) .
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These 5 Retailers Just Crushed Q1 Earnings: What the Heck is Happening?
Between yesterday after the bell and this morning before market open, there were a slew of retailers that reported their first-quarter results. And surprisingly, the results were strong, with some posting better earnings and comparable store sales numbers than expected.
Let’s take a look at five retailers making Wall Street very happy today.
Abercrombie & Fitch (ANF - Free Report)
Abercrombie & Fitch reported a loss of 72 cents per share (this number excludes 19 cents from non-recurring items) that matched the Zacks Consensus Estimate. Revenues declined 4% year-over-year to $661.1 million, but beat our consensus estimate of $653 million; total comparable store sales were down 3%. Abercrombie’s flagship net sales decreased 11% to $286.4 million, but sales at the Hollister brand increased 3% to $374.7 million.
The company is currently on the market to sell itself. Yesterday, the Wall Street Journal reported that American Eagle Outfitters (AEO - Free Report) , together with private equity firm Cerberus Capital, are teaming up to buy the struggling company. This has yet to be confirmed, however.
Thanks to this decent-but-not-terrible report, shares of ANF are up about almost 9% in mid-morning trading.
Best Buy (BBY - Free Report)
Best Buy, a popular electronics retailer, posted adjusted earnings of 60 cents per share, comfortably surpassing the Zacks Consensus Estimate of 40 cents per share and increasing 40% year-over-year. Revenues came in at $8.528 billion, also topping our consensus estimate and growing 1% from the prior-year quarter.
Total comparable store sales were up 1.6% thanks to growth in both domestic and international sales, as well as robust performance in gaming and mobile. Best Buy said that digital sales increased over 22% in Q1, a sign that the company is continuing to improve its e-commerce business and grow its audience online.
Shares of BBY were up over 17% in mid-morning trading. For Zacks' analysis on Best Buy’s earnings report, click here.
Guess? Inc. (GES - Free Report)
Even though mall staple Guess? reported a loss per share of 24 cents, it beat the Zacks Consensus Estimate of a loss of 31 cents, as well as management’s guided loss in the range of 33-30 cents. Net revenues came in at $458.6 million, also outpacing the Zacks estimate and improving 2.2% year-over-year. This upside was due to strong sales in Guess’ Europe, Asia, and Wholesale segments.
Overseas segments did very well for Guess in Q1. Breaking them down, Europe revenues were up 23.3% (29.1% on a constant currency basis) to $165.4 million, while Asia increased 16.9% (up 15.5% on a constant currency basis) to $63.4 million.
GES stock has gained about 15.5% so far today. Click here for Zacks' analysis on Guess’ Q1 earnings.
Sears (SHLD - Free Report)
For the first time in nearly two years, struggling department store Sears reported its first quarterly profit thanks to the sale of its Craftsman tool business. Net income attributable to shareholders was $244 million, or $2.28 per share, compared with a loss of $471 million, or $4.41 per share in the year-ago quarter. Excluding adjustments, Sears reported a net loss of $2.15 per share.
Revenues came in at $4.3 billion, decreasing 20.3% year-over-year mostly due to lower demand for groceries, household items, pharmacy, and apparel at Kmart, as well as fewer sales of home appliances at Sears. Sales at U.S. stores open more than a year declined by 12.4%, while sales at Kmart fell by 11.2% in Q1.
Sears also announced that it’s boosting its cost-cutting efforts to $1.25 billion, up from a prior target of $1 billion, and plans to review its store fleet.
SHLD stock is soaring today, up about 25% in mid-morning trading.
Williams-Sonoma (WSM - Free Report)
Home and kitchen retailer Williams-Sonoma reported an earnings beat of 51 cents per share, surpassing the Zacks Consensus Estimate of 48 cents. Net revenues of $1.112 billion came in slightly above the Zacks estimate and increased 1.2% year-over-year thanks to strong growth at West Elm and Williams-Sonoma brands, in addition to international and newer businesses like Rejuvenation and Mark and Graham.
Total comparable brand revenues increased just 0.1% in the quarter, significantly lower than the 4.5% increase reported in the previous quarter. Comparable brand revenues for all the brands declined, except West Elm and William Sonoma. These businesses saw increases of 6% and 3.2%, respectively. E-commerce revenues were $581 million, up 0.7% year-over-year.
Shares of WSM rallied over 9% immediately after the retailer’s report was released after the bell yesterday, though the stock is now down about 0.26% today in mid-morning trading. Click here for Zacks' analysis on Williams-Sonoma’s Q1 earnings.
Bottom Line
Even though these recent earnings reports may seem like the retail industry has potentially found its footing again, that notion is pretty unlikely. Realistically, it’s a lot of retailers reporting results that were not as bad as anticipated, and investor relief is strikingly apparent.
But while many companies like Macy’s (M - Free Report) disappointed this season, there were some retailers, like Best Buy, that made concentrated efforts to turn their businesses around, with some brands even opening new stores instead of closing old locations. And, bright spots like Home Depot (HD - Free Report) and Walmart (WMT - Free Report) are showing investors that there is still hope against a giant like Amazon (AMZN - Free Report) .
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>