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Retail Week Brings Surprises, Both Positive and Negative
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Tuesday, May 16th, 2023
It’s Retail Week — or at least the start of retail-related earnings and economic reports. We’ll here from omnidirectional Big Box retailers like Target (TGT - Free Report) and Walmart (WMT - Free Report) in the coming days, but for this morning we’ll take a look at Big Box specialty retailer Home Depot (HD - Free Report) . Headline Q1 results missed expectations: earnings of $3.82 per share missed the Zacks consensus by 4 cents, and down from $4.09 per share, on quarterly revenues of $37.3 billion, -4.2% from estimates and the worst top-line report in 20 years.
Extreme weather in California did a number on lumber prices in the quarter, which is very likely a temporary condition. Yet the company has also brought down full-year guidance for sales and comps — again, the worst we’ve seen from the home improvement center since the early Aughts. Thus, Home Depot is trading down -5% in pre-market activity, adding to its -9% year to date. For more on HD’s earnings, click here.
Advance Retail Sales for April are out this morning, with a headline number coming in only half what was expected: +0.4% from +0.8% analysts were looking for. This is the first positive figure since January’s +2.8%, and a still a nice swing to the positive from March’s upwardly revised -0.7%. Subtracting auto sales, the needle does not move: +0.4%, in-line with expectations. The previous month has been revised up from -0.8% originally reported to -0.4% this morning, and also the first positive print since +1.9% in January.
If we further strip out volatile month-over-month moves, ex-autos and gas, Retail Sales come in at +0.6%, double the +0.3% expected. The Control read, which numbers find their way up the food chain of inflation metrics and Fed monetary policy decision making, was +0.7% last month, notably higher than the +0.4% expected. January marked the most recent positive release, +1.7%.
Industrial Production for April also topped expectations this morning, posting +0.2% from the +0.1% consensus, though down from the upwardly revised +0.5% the previous month, which now matches the recent high recorded in January. Capacity Utilization was exactly in-line with expectations at 79.7%, up from the downwardly revised 79.4% in March. Both of these prints are showing relative strength overall; these month-over-month registers continue to illustrate decent numbers in goods-producing metrics.
After today’s open we’ll see Business Inventories for March and the latest Home Builder Confidence Index for May.
Image: Bigstock
Retail Week Brings Surprises, Both Positive and Negative
Tuesday, May 16th, 2023
It’s Retail Week — or at least the start of retail-related earnings and economic reports. We’ll here from omnidirectional Big Box retailers like Target (TGT - Free Report) and Walmart (WMT - Free Report) in the coming days, but for this morning we’ll take a look at Big Box specialty retailer Home Depot (HD - Free Report) . Headline Q1 results missed expectations: earnings of $3.82 per share missed the Zacks consensus by 4 cents, and down from $4.09 per share, on quarterly revenues of $37.3 billion, -4.2% from estimates and the worst top-line report in 20 years.
Extreme weather in California did a number on lumber prices in the quarter, which is very likely a temporary condition. Yet the company has also brought down full-year guidance for sales and comps — again, the worst we’ve seen from the home improvement center since the early Aughts. Thus, Home Depot is trading down -5% in pre-market activity, adding to its -9% year to date. For more on HD’s earnings, click here.
Advance Retail Sales for April are out this morning, with a headline number coming in only half what was expected: +0.4% from +0.8% analysts were looking for. This is the first positive figure since January’s +2.8%, and a still a nice swing to the positive from March’s upwardly revised -0.7%. Subtracting auto sales, the needle does not move: +0.4%, in-line with expectations. The previous month has been revised up from -0.8% originally reported to -0.4% this morning, and also the first positive print since +1.9% in January.
If we further strip out volatile month-over-month moves, ex-autos and gas, Retail Sales come in at +0.6%, double the +0.3% expected. The Control read, which numbers find their way up the food chain of inflation metrics and Fed monetary policy decision making, was +0.7% last month, notably higher than the +0.4% expected. January marked the most recent positive release, +1.7%.
Industrial Production for April also topped expectations this morning, posting +0.2% from the +0.1% consensus, though down from the upwardly revised +0.5% the previous month, which now matches the recent high recorded in January. Capacity Utilization was exactly in-line with expectations at 79.7%, up from the downwardly revised 79.4% in March. Both of these prints are showing relative strength overall; these month-over-month registers continue to illustrate decent numbers in goods-producing metrics.
After today’s open we’ll see Business Inventories for March and the latest Home Builder Confidence Index for May.
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