Whatâs Going On Here?When shoppers went to Lowe's, its shares went high: the DIY retailerâs stock climbed on Wednesday after it announced a better-than-expected third-quarter profit and forecast for the rest of the year. What Does This Mean?Loweâs update wasnât entirely stately, but it was a big improvement on arch-rival Home Depotâs worse-than-expected update on Tuesday. Sales in the home improvement chainâs stores didnât grow by as much as hoped, meaning revenue fell short, but its raised earnings forecast kept investors from blowing the whistle.
Another member of US royalty, BeyoncĂŠ, will be pleased to hear that her favorite retailer, Target, reported expectation-beating revenue and profit on Wednesday too (tweet this). Target also raised its earnings prediction for this all-important holiday quarter, when it makes most of its sales. By opening new Disney stores within its own stores â as well as offering perks like free product shipping â itâll hope to capitalize on customersâ seasonal demand for toys. Why Should I Care?For markets: A sigh of relief.
Loweâs and Targetâs shares both rose on Wednesday: by 13% and 6% respectively. While thatâs likely in part down to their positive updates, itâs also possible investors whoâd been selling the day before did a U-turn. They mightâve previously been worried that retail results as a whole would disappoint, after department store chain Kohlâs reported worse-than-expected quarterly earnings and cut its profit forecast for the rest of the year. And that was true for Urban Outfitters late on Tuesday â which then cut a lonely figure on Wednesday, falling 14%.
The global picture: Retailâs weakening in the UK too.
While British consumers have been earning more and increasing their spending in general, some retailers have still struggled. Shares of Kingfisher â Europeâs answer to Loweâs â fell 7% on Wednesday after reporting weak third-quarter sales. British drinks company Fevertree, meanwhile, warned investors of an upcoming slowdown in its sales. |
