This week brings quarterly earnings reports from a host of retailers not named Walmart or Target. Four companies – Best Buy Co. Inc. (NYSE: BBY), Kohl’s Inc. (NYSE: KSS), Abercrombie & Fitch Co. (NYSE: ANF), Dick’s Sporting Goods Inc. (NYSE: DKS), and Lowe’s Companies Inc. (NYSE: LOW) – reported results before markets opened Tuesday morning. 

Only one appears in a position to score a win during this year’s holiday season. In baseball, a one-for-five batting average is known as the Mendoza Line. Here’s a look at Tuesday morning’s Mendoza Line in U.S. markets.  

Lowe’s

 

The holiday season is typically the weakest for home improvement retail stores, and this year is no different. Lowe’s missed analysts’ consensus revenue estimate by 1.7%, reporting revenue of $20.5 billion. Adjusted EPS came in at $3.06, above the consensus estimate of $3.03. 

The bad news was a year-over-year drop of 7.4% in same-store sales. CEO Marvin Ellison attributed the drop “to a decline in DIY discretionary spending, partially offset by positive Pro customer comp sales.”

In its outlook for the 2023 fiscal year ending in January, Lowe’s lowered its revenue estimate from a range of $87 to $89 billion to $86 billion. The consensus estimate called for revenue of $87.6 billion. Same-store sales are forecast to be down 5%, lower than prior guidance for a drop of 2% to 4%. Estimated adjusted EPS dropped from a prior range of $13.20 to $13.60 to $13.00. 

The stock traded down 3.1% at $198.13 shortly after Tuesday’s opening bell. The stock’s 2-week range of $181.85 to $237.21. Lowe’s pays an annual dividend of $4.40 (yield of 2.15%).

Best Buy

SAN FRANCISCO – JUNE 19: A salesman carries a Best Buy shopping basket as he takes inventory of DVD movies at a Best Buy store June 19, 2007 in San Francisco, California. Consumer electronics retailer Best Buy reported an 18 percent drop in first quarter to $192 million or 39 cents per share, down from $234 million or 47 cents per share one year ago. (Photo by Justin Sullivan/Getty Images)

SAN FRANCISCO – JUNE 19: A salesman carries a Best Buy shopping basket as he takes inventory of DVD movies at a Best Buy store June 19, 2007 in San Francisco, California. Consumer electronics retailer Best Buy reported an 18 percent drop in first quarter to $192 million or 39 cents per share, down from $234 million or 47 cents per share one year ago. (Photo by Justin Sullivan/Getty Images)

Although it beat the consensus EPS estimate by 7.5%, revenue fell short, coming in at $9.78 billion, lower than ‌analysts’ consensus of $9.90 billion. Company-wide same-store sales dropped 6.9%, and U.S. same-store sales fell 9.3%. Domestic online sales of $2.75 billion fell 9.3% on a comparable basis, and as a percentage of total U.S. revenue, online revenue was 30.6% versus 31.0% last year.

Best Buy said the decline in same-store sales was down to appliances, computing, home theater, and mobile phones. All are big-ticket items, so it’s not hard to figure out what happened.

In its guidance for the fourth quarter of fiscal 2024 (ending in January), Best Buy lowered its revenue forecast from a range of $43.8 to $44.5 billion to a new range of $43.1 to $43.7 billion. Analysts were looking for full-year sales of $44.14 billion, a year-over-year decline of more than 4.5%, before the company’s new guidance. Same-store sales are expected to decline by 6% to 7.5%, another downward revision. Adjusted EPS is now forecast to top out at $6.30, down from $6.40. The low end, $6.00, was unchanged. 

Best Buy’s stock traded down 4.7% early Tuesday at $64.90 in a 52-week range of $62.30 to $93.32. Best Buy pays an annual dividend of $3.68 (yield of 5.4%).

Kohl’s

Department store retailer Kohl’s also missed the revenue estimate and revised sales guidance for the 2023 fiscal year that ends in January. The good news is that EPS was better than expected and Kohl’s raised the low end of this full-year EPS guidance. It was not enough to mollify investors, however.

The company reported revenue of $3.8 billion, down 5.2% year over year and short of the consensus $3.95 billion estimate. EPS came in at $0.53, well above the analyst’s $0.37 consensus. Gross margins rose by about half a point to 39.0%. Expenses declined slightly year over year but so did operating income. 

In its outlook for fiscal 2023, Kohl’s forecast a sales drop of 2.8% to 4%, much worse than the consensus estimate for a decline of 1.45%. The retailer raised the low end of its expected EPS range, but that wasn’t enough to boost investors’ spirits.

Kohl’s stock traded down 8.8% at $22.68 early Tuesday. The stock’s 52-week range is $17.68 to $35.77. Kohl’s pays an annual dividend of $2.00 (yield of 8.05%).

Abercrombie & Fitch

Specialty retailer Abercrombie & Fitch actually beat both revenue and EPS estimates Tuesday morning. A&F even raised guidance. Yet the stock is taking a beating in early trading. Look no further than the 52-week high that was posted Monday. A&F has delivered, and now investors are taking their cut. 

The company reported third-quarter sales of $1.06 billion, 20% higher than in the year-ago quarter and 8% higher than the consensus estimate. EPS rose from $0.01 a year ago to $1.83 and came in 56.4% higher than the consensus. Same-store sales rose 16%.

In its outlook for the 2023 fiscal year that ends in January, A&F expects sales to grow by 12% to 14% (a range of $4.14 to $4.22 billion). The low end of the range is slightly better than the consensus estimate for sales of $4.11 billion. Year-over-year EPS growth is pegged at more than 1,700%, up from $0.25 last year to $4.63.

Profit-taking has probably caused the share price to decline by 6.3% early Tuesday to $67.75, in a 52-week range of $18.30 to $74.75. A&F does not pay a dividend.

Dick’s Sporting Goods

Sporting gear retailers like Dick’s generally report their best revenue and EPS figures in the holiday quarter. That makes the company’s third-quarter report shine even more brightly.

Dick’s reported third-quarter revenue of $3.04 billion, up 2.8% year over year and 3% better than the consensus estimate. Adjusted EPS rose 10% year over year to $2.85, beating the consensus of $2.46 by 15.9%. Same-store sales rose 1.7% year over year.

In its fiscal year 2023 outlook, the company sees adjusted EPS of $12.00 to $12.60, nicely above the consensus of $11.82. Same-store sales should rise by 0.5% to 2.0%. Dick’s did not offer revenue guidance, but the consensus estimate calls for a year-over-year increase of 3.35%. That may seem low, but the fourth-quarter consensus is nearly 5% above last year’s actual results. Unlike some other retailers we could name, Dick’s is being set a relatively high bar for the holiday quarter.

The stock traded up 9.7% at $130.60 early Tuesday morning in a 52-week range of $100.98 to $152.81. Dick’s pays an annual dividend of $4.00 (yield of 3.36%).

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