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Smattering of Q2 Earnings Left

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Wednesday, August 19, 2015

(This is Mark Vickery covering for Sheraz Mian, who is out until late this week.)

As retailers again bring up the rear this earnings season, we are seeing some clear winners and losers among the big-box firms. This morning, Target (TGT - Free Report) , which had had some difficulty meeting analyst numbers in the recent past, beat both earnings and sales in its fiscal Q2. CEO Brian Cornell’s year-long tenure looks to now be bearing fruit, especially in light of Wal-Mart’s (WMT - Free Report) poorer showing yesterday.

Target also raised full-year guidance, and posted better comp store results year over year. Shares of the company are up 4 percent in pre-market trading.

Lowe’s (LOW - Free Report) improved its U.S. home improvement business in Q2, but missed earnings estimates. Guidance for fiscal 2015 was left unchanged. Both top- and bottom-lines were up year over year, but this was not the big quarter Lowe’s main competitor Home Depot (HD - Free Report) had.

Staples posted both a profit and sales decline in its fiscal Q2. This is still prior to its regulatory approval to take over competitor Office Depot, which itself was showing dwindling numbers. On-line retailers have been carving into big-box office supply businesses such as these; it remains to be seen if Staples can right the ship even if the merger goes forward without a hitch.

Moving onto China news this morning, both the Shanghai and Shenzhen markets finished up on the day after another typical roller coaster ride. Many big Chinese companies disposed its biggest shareholders during Chinese markets trading time, demonstrating state-backed firms still firmly ensconced in most of them. This helped investors gain a bit more trust in these markets following yesterday’s sharp selloff. The Shanghai index is still -30 percent since its highs in June.

Finally, July Consumer Price Index (CPI) numbers came in-line with expectations at +0.1 percent on both the headline number and minus food and energy. This won’t likely change anyone’s outlook today.

Mark Vickery
Senior Editor

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