Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Dillard's (NYSE:DDS) and the best and worst performers in the general merchandise retail industry.
General merchandise retailers–also called broadline retailers–know you’re busy and don’t want to drive around wasting time and gas, so they offer a one-stop shop. Convenience is the name of the game, so these stores may sell clothing in one section, toys in another, and home decor in a third. This concept has evolved over time from department stores to more niche concepts targeting bargain hunters or young adults, and e-commerce has forced these retailers to be extra sharp in their value propositions to consumers, whether that’s unique product or competitive prices.
The 8 general merchandise retail stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was 1.9% below.
Luckily, general merchandise retail stocks have performed well with share prices up 17.2% on average since the latest earnings results.
Dillard's (NYSE:DDS)
With stores located largely in the Southern and Western US, Dillard’s (NYSE:DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Dillard's reported revenues of $1.54 billion, up 1.4% year on year. This print exceeded analysts’ expectations by 2.6%. Overall, it was a stunning quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Dillard’s Chief Executive Officer William T. Dillard, II commented on the quarter, “We were happy to achieve a sales increase for the first time in a while and encouraged by strengthening sales trends in July. In an operating environment that changes daily, we focused on controlling inventory, ending up 2% compared to 6% at the end of first quarter.”
Interestingly, the stock is up 22.3% since reporting and currently trades at $608.88.
Is now the time to buy Dillard's? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: Kohl's (NYSE:KSS)
Founded as a corner grocery store in Milwaukee, Wisconsin, Kohl’s (NYSE:KSS) is a department store chain that sells clothing, cosmetics, electronics, and home goods.
Kohl's reported revenues of $3.55 billion, down 5% year on year, outperforming analysts’ expectations by 1.4%. The business had a stunning quarter with a beat of analysts’ EPS and gross margin estimates.
The market seems happy with the results as the stock is up 39.1% since reporting. It currently trades at $18.14.
Is now the time to buy Kohl's? Access our full analysis of the earnings results here, it’s free for active Edge members.
TJX (NYSE:TJX)
Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE:TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores.
TJX reported revenues of $14.4 billion, up 6.9% year on year, exceeding analysts’ expectations by 1.7%. It was a satisfactory quarter as it also posted a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
Interestingly, the stock is up 8.5% since the results and currently trades at $146.07.
Read our full analysis of TJX’s results here.
Macy's (NYSE:M)
With a storied history that began with its 1858 founding, Macy’s (NYSE:M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Macy's reported revenues of $5.00 billion, down 1.9% year on year. This print beat analysts’ expectations by 2.7%. It was an exceptional quarter as it also put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Macy's achieved the highest full-year guidance raise among its peers. The stock is up 51.7% since reporting and currently trades at $20.48.
Read our full, actionable report on Macy's here, it’s free for active Edge members.
Burlington (NYSE:BURL)
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Burlington reported revenues of $2.71 billion, up 9.7% year on year. This result topped analysts’ expectations by 2.5%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ EBITDA and EPS estimates.
The stock is up 2.1% since reporting and currently trades at $286.16.
Read our full, actionable report on Burlington here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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