Big U.S. Retail Stocks Release Much-Anticipated Earnings

By midday, Shares of Kohls plummeted more than 9%, while Home Depot slipped 2%. Meanwhile, Walmart was a slight gainer on solid earnings.

Anthony Russo
    May 19, 2020 10:00 AM  PT
Big U.S. Retail Stocks Release Much-Anticipated Earnings
author: Anthony Russo   

Tuesday was a big day for financial reports, as investors were eager to hear the announcements from The Home Depot, Inc., (NYSE: HD) Walmart Inc. (NYSE: WMT) and Kohl's Corp. (NYSE: KSS) However, the mixed results failed to cause the markets to surge today.

Taking the biggest hit in the market today was the department store chain Khol's, as shares tumbled more than 9% by midday on its reporting revenues plummeting 41% to $2.43 billion on an adjusted loss of $3.20 per share in the first three months through March.  FactSet analysts' were expecting Khol's to generate revenues of $2.45 billion on a loss of $1.67 a share.

Investors were also disappointed with Home Depot, as net income in the quarter through May 5 slipped to $2.25 billion, or $2.08 per share compared with $2.51 billion, or $2.27 per share in the same period in the proceeding year. By midday, the stock in Home Depot fell nearly 2% to $240.72 per share intraday.

However, Walmart posted strong results. The retail giant said same-store sales soared 10%, crushing the Street's estimates of a 7.2% rise. Its adjusted earnings were $1.18 per share, beating the Street's projections by 5 cents. The only problem was Walmart withdrew its 2020 guidance on the uncertainties of Covid-19, which certainly didn't thrill investors. The stock in Walmart gained 77 cents to $128.56 per share by midday.

As a result, the Dow Jones was trading nearly 76 points lower, while the S&P 500 gained more than 2 points.

Also affecting trading today is Nasdaq's plan to tightening restrictions to make it more challenging for Chinese companies to seek IPO's on its stock exchange, as reported by Reuters on Monday, adding to trade tensions.

Also, President Trump has blamed China and threatened to permanently withdraw funding from the World Health Organization (WHO) on the handlings of Covid-19.
"It is clear the repeated missteps by you and your organization in responding to the pandemic have been extremely costly for the world. Trump wrote in a letter to the WHO on Monday.

He added, "The only way forward for the World Health Organization is if it can actually demonstrate independence from China."

With unemployment now approaching Great Depression levels, trade tensions are the last thing the U.S. needs--and the market is reflecting that.