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Q2 Retailers GPS, JWN, ULTA Beat Ahead of Jackson Hole
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Markets lost whatever momentum they still had by mid-morning today, sliding into the red and closing near session lows. The August washout appears to want to continue; there were no major news events that would reasonably expect the Dow to plummet -330 points, -0.96% — and it was the winner of the main indices. The S&P 500 fell -1.36% on the day, and the Nasdaq, early today buoyed by NVIDIA’s (NVDA - Free Report) big earnings performance yesterday after the close, sank -1.88% on the day. The small-cap Russell 2000 was down -1.27%.
Basically, we’ve just kissed those big gains from June and July goodbye. This is obviously bad news for short-term stock traders, but ultimately might provide a silver lining for longer-term investors: those mid-July highs were getting pretty “nose-bleed,” and pulling back — as many analysts had been looking for — looks to be setting the table for a higher-volume late summer/early fall trading environment with room to move higher. Or so goes the hopeful side of things.
We would be wise to wait for Fed Chair Jay Powell’s speech at the Jackson Hole Economic Symposium tomorrow, his first major address since the last FOMC meeting, which brought about its fourth-straight 25 basis-point (bps) hike to the highest Fed funds rate since 2001. How warm will he be to the idea of further rate hikes in the near-term? Powell is never preoccupied with satisfying the immediate wants of stock market participants, but if he feels the need to reassure that the current 5.25-5.50% ought to take care of inflation meaningfully over time, perhaps he’ll throw us all a bone in the final days of a tough trading month.
Nordstrom (JWN - Free Report) posted a strong Q2 earnings beat after today’s close: earnings of 84 cents per share surged ahead of the 45 cents expected (and beating the year-ago 81 cents per share, as well) on revenues of $3.77 billion topped the $3.67 billion in the Zacks consensus. This is the seventh straight earnings beat for the company, even though we see lower results for its flagship stores and Nordstrom Rack discount stores. Shares initially jumped but are now flat on the news, as the company did not raise guidance after such a boffo earnings surprise.
Gap Stores (GPS - Free Report) also reported Q2 results after the closing bell, with a giant beat on the bottom line — earnings of 34 cents per share versus expectations of 9 cents — augmented by a slight miss on the top: $3.55 billion in quarterly sales, as opposed to the $3.60 billion analysts were expecting. Comps fell -6% year over year, which was worse than the -4% expected, while its Old Navy, Banana Republic, Athleta and flagship Gap stores all came in lower than year-ago numbers. Shares are -5% in late trading.
Specialty retailer Ulta Beauty (ULTA - Free Report) outpaced expectations on both top and bottom lines in its Q2 report this afternoon, with earnings of $6.02 per share nicely improving over the $5.87 anticipated and revenues of $2.53 billion in the quarter ahead of the $2.51 billion. The company also raised Q3 comps guidance, after seeing +8% gains year over year in today’s release. Interestingly, Ulta is one of the few major retailers having recently reported with positive Inventory growth of +9%; the company credited high demand for the gains in supply. Shares are up +2% in after-market trading.
Image: Bigstock
Q2 Retailers GPS, JWN, ULTA Beat Ahead of Jackson Hole
Markets lost whatever momentum they still had by mid-morning today, sliding into the red and closing near session lows. The August washout appears to want to continue; there were no major news events that would reasonably expect the Dow to plummet -330 points, -0.96% — and it was the winner of the main indices. The S&P 500 fell -1.36% on the day, and the Nasdaq, early today buoyed by NVIDIA’s (NVDA - Free Report) big earnings performance yesterday after the close, sank -1.88% on the day. The small-cap Russell 2000 was down -1.27%.
Basically, we’ve just kissed those big gains from June and July goodbye. This is obviously bad news for short-term stock traders, but ultimately might provide a silver lining for longer-term investors: those mid-July highs were getting pretty “nose-bleed,” and pulling back — as many analysts had been looking for — looks to be setting the table for a higher-volume late summer/early fall trading environment with room to move higher. Or so goes the hopeful side of things.
We would be wise to wait for Fed Chair Jay Powell’s speech at the Jackson Hole Economic Symposium tomorrow, his first major address since the last FOMC meeting, which brought about its fourth-straight 25 basis-point (bps) hike to the highest Fed funds rate since 2001. How warm will he be to the idea of further rate hikes in the near-term? Powell is never preoccupied with satisfying the immediate wants of stock market participants, but if he feels the need to reassure that the current 5.25-5.50% ought to take care of inflation meaningfully over time, perhaps he’ll throw us all a bone in the final days of a tough trading month.
Nordstrom (JWN - Free Report) posted a strong Q2 earnings beat after today’s close: earnings of 84 cents per share surged ahead of the 45 cents expected (and beating the year-ago 81 cents per share, as well) on revenues of $3.77 billion topped the $3.67 billion in the Zacks consensus. This is the seventh straight earnings beat for the company, even though we see lower results for its flagship stores and Nordstrom Rack discount stores. Shares initially jumped but are now flat on the news, as the company did not raise guidance after such a boffo earnings surprise.
Gap Stores (GPS - Free Report) also reported Q2 results after the closing bell, with a giant beat on the bottom line — earnings of 34 cents per share versus expectations of 9 cents — augmented by a slight miss on the top: $3.55 billion in quarterly sales, as opposed to the $3.60 billion analysts were expecting. Comps fell -6% year over year, which was worse than the -4% expected, while its Old Navy, Banana Republic, Athleta and flagship Gap stores all came in lower than year-ago numbers. Shares are -5% in late trading.
Specialty retailer Ulta Beauty (ULTA - Free Report) outpaced expectations on both top and bottom lines in its Q2 report this afternoon, with earnings of $6.02 per share nicely improving over the $5.87 anticipated and revenues of $2.53 billion in the quarter ahead of the $2.51 billion. The company also raised Q3 comps guidance, after seeing +8% gains year over year in today’s release. Interestingly, Ulta is one of the few major retailers having recently reported with positive Inventory growth of +9%; the company credited high demand for the gains in supply. Shares are up +2% in after-market trading.
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