Half the spotlight this week was shared with retailers on one side, and then there was Nvidia (NVDA), the market driver, on the other. Let's quickly recap some of the important findings reported this week in the aftermath First quarter earnings season.
Fifteen companies included in the Standard & Poor's 500 index announced their results; It beat 13 of them on earnings per share and 12 on revenue. Synopsys (SNPS) failed to deliver on EPS and revenue, while Nordson (NDSN) missed revenue expectations. Target (TGT) reported a loss on EPS and embedded revenue.
Of the 466 companies that have reported quarterly so far, about 78.3% of them beat EPS, while about 54.5% of them beat the revenue consensus.
On Tuesday, specialty retailer Lowe's (LOW) beat expectations with its first-quarter earnings report. The North Carolina-based company saw a comparable sales decline of 4.1%, which was better than the consensus estimate of a 5.6% decline. The company noted that the decline in large DIY discretionary spending was partially offset by positive comparable sales in Pro and online during the quarter. Looking ahead, total sales are expected to be approximately $84 billion to $85 billion for the full year versus $84.4 billion consensus, comparable sales to decline -2% to -3% versus last year, and adjusted EPS of $12.00 to $12.30. vs. consensus of $12.18.
Target (TGT) on Wednesday reported mixed results, and the retailer noted lower sales in some discretionary categories. The Minneapolis-based giant saw a comparable sales decline of 3.7% during the quarter, which was in line with analysts' expectations. Looking ahead, it expects sales growth in the second quarter to be flat at 2%. Adjusted EPS for the second quarter is expected to be in the range of $1.95 to $2.35, versus the consensus mark of $2.20, and full-year EPS is expected to fall in a range of $8.60 to $8.90 versus the consensus mark of $9.49. . Earlier in the week, the company announced it would lower regular everyday prices on nearly 5,000 frequently shopped products across its wide assortment.
TJX Companies (TJX) on Wednesday posted results that beat estimates and raised guidance, offsetting lower-than-consensus earnings guidance for the second quarter. The company said it saw comp sales growth in every division driven entirely by customer transactions. For the second half, comparable store sales are expected to rise 2% – 3% with a pre-tax profit margin of 11.3% – 11.5%. Earnings are expected to range between $2.22 and $2.26 per share.
Ralph Lauren Corporation (RL) reported a 6% comparable sales jump (ex-F/X) for its fiscal fourth quarter versus the 4.3% rise analysts expected Thursday. The apparel giant said foreign currencies positively impacted revenue growth by about 110 basis points, and revenue from North America rose 2% during the quarter. Looking to 2025, the company expects to grow revenue at a low-single-digit pace on a constant currency basis, with a focus on around 2% to 3%. Foreign currencies are expected to negatively impact revenue growth by approximately 90 basis points in fiscal 2025, based on current foreign exchange rates.
Even with plenty of action on the retail side, Nvidia easily managed to capture Wall Street's attention throughout the week, and investor buzz rose steadily leading up to its earnings day. The artificial intelligence chip maker reported huge first-quarter earnings on Thursday and offered an upbeat forecast. The company expected second-quarter revenue to reach $28 billion, plus or minus 2%, and analysts were expecting $26.8 billion. Adjusted gross margin is expected to be approximately 75.5%, plus or minus 50 basis points, while adjusted operating expenses are expected to be approximately $2.8 billion. The company also announced a 10-for-1 stock split and a 150% increase in its quarterly dividend. Its shares rose 10% after hours and crossed the $1,000 mark. The leading AI company is now valued at the combined market capitalization of Amazon and Tesla. While its shares rose, the shares of its competitors, AMD and Intel, fell by 4% and 4.5%, respectively.
For Memorial Day week, 10 S&P companies are expected to report, and technology names like Salesforce (CRM), Agilent (A), and HP Inc. are expected to report. (HPQ) on Wednesday. Thursday will be mostly heavy in retail, as Costco (CSCO), Dollar General (DG), Best Buy (BBY), Ulta Beauty (ULTA), and Hormel Foods (HRL) will report their quarterly results.