Retail earnings took center stage Thursday, and the signals were sharply mixed. Walmart suffered its biggest drop in years after a rare sales miss, while Ross Stores rallied on strong demand for discounted goods
$Wal-Mart(WMT)$-9.2%
Walmart is the largest U.S. retailer, selling groceries, household goods, apparel and general merchandise through stores and online.
Walmart reported adjusted EPS of $0.81, while revenue came in around $187.9 billion, both above expectations. The weak spot was U.S. comparable sales, which rose just 2.6%, well below the 3.8% analysts expected and the slowest growth in six years.
The company still raised its full-year outlook, forecasting sales growth of 4%–5% and adjusted EPS of $2.80–$2.87. But traffic growth slowed, consumers showed more caution, and higher fuel costs added pressure. Shares fell more than 9% as investors focused on signs that household spending is losing momentum.
$Advance Auto Parts(AAP)$ -24.5%
Advance Auto Parts sells replacement car parts and accessories to professional mechanics and do-it-yourself customers.
Q2 adjusted EPS came in at $1.03, ahead of the roughly $0.81 consensus, but revenue of about $2.00 billion missed expectations near $2.04 billion. Comparable sales also declined as consumers pulled back on do-it-yourself auto projects.
The company raised its full-year EPS range to $2.60–$3.30, but its sales outlook came in below Wall Street expectations. Investors focused on the weak top line and signs of softer consumer demand, sending shares down nearly 25%.
$Alibaba(BABA)$ volatile after earnings
Alibaba is one of China’s largest e-commerce and cloud-computing companies, with businesses spanning online retail, AI and digital services.
Alibaba reported a 9% increase in quarterly revenue, while cloud and AI-services revenue jumped 45% to RMB48.44 billion. Adjusted earnings per ADS came in at RMB8.52, below the RMB10.53 analysts expected.
The biggest issue was spending. Net profit fell 75%, while capital expenditure surged 75% to RMB67.68 billion as Alibaba accelerated investment in AI infrastructure and chips. Management said it expects AI-related capex to reach break-even within roughly three years. U.S.-listed shares initially fell before recovering some of the loss.
$Ross(ROST)$ +8.63% after hours
Ross Stores is an off-price retailer that sells discounted clothing, shoes, accessories and home goods.
Ross delivered a strong Q2, with revenue up 13% to $6.26 billion, ahead of the $6.18 billion consensus. Adjusted EPS of $2.06 also beat expectations of $1.94.
Management raised full-year EPS guidance to $8.61–$8.77, from $7.50–$7.74 previously. It also expects comparable sales to rise 6%–7% in Q3, well above Wall Street expectations. Shares rose about 8.63% after hours as value-conscious shoppers continued to trade down toward discounted brands.
$Coty(COTY)$ -9.24%
Coty is the beauty company behind brands and licenses including CoverGirl, Rimmel, Kylie Cosmetics and several major fragrance labels.
Fiscal Q4 revenue reached $1.27 billion, better than expectations, but adjusted loss per share came in at $0.02, wider than the $0.01 loss analysts expected.
Coty expects Q1 adjusted EPS of $0.11–$0.13, below the $0.14 consensus, and sees like-for-like revenue falling by a low- to mid-single-digit percentage. The company also withheld full-year guidance as it restructures the business. Shares fell 9.2%.
Today’s discussion:
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Walmart -9% or Ross +7% — which retailer would you rather own right now?
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Alibaba’s AI business is growing fast, but profits are under pressure. Bullish or bearish on BABA?
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