The retail industry could be headed for a tough holiday season. Here’s a roundup of 3 companies that just cut their profit outlooks.

Image

  • Slashed full-year profit outlooks are weighing on retail stocks ahead of the important holiday season.
  • After disappointing earnings reports this week, the S&P 500 Retail Index is down 4%.
  • The slide was led by double-digit drops in Macy’s and Kohl’s.
  • Here are three companies that cut profit expectations for the rest of the year, and how it has affected their stock prices.
  • Read more on Business Insider.

Big third-quarter earnings misses by retailers over the last week are dragging on the entire retail industry before the holiday season.

Double-digit stock price slides from Macy’s and Kohl’s weighed on the S&P 500 Retail Index, which lost as much as 4% this week. The S&P 500 index has only fallen as much as 0.2% in the same period.

Weak sales, disappointing earnings, and lowered full-year profit forecasts led declines. It was the second time this year that Kohl’s and Home Depot have lowered earnings expectations, which is not a good sign going into the holidays, the busiest and most important season for retailers.

In 2018, the holiday season contributed to a strong end of the year for retailers such as Target, Lululemon, American Eagle, and Kohl’s. But the year-end boost hasn’t totally translated into success in 2019 – companies such as Sears, Kmart, and Walmart have had to shut stores in the ongoing retail apocalypse.

Not all recent earnings have disappointed. Retailers Target,Gap, and Walmart posted third-quarter results that exceeded analyst expectations.

But, those reports and subsequent stock gains weren’t enough to lift the struggling industry as a whole. The S&P 500 Retail Index has gained only slightly more than 5% year-to-date, while the S&P 500 has gained nearly 24%.

Here are the key numbers from three companies that lowered full-year profit outlooks, and how much the stock has been affected:


1. Home Depot

Image

Ticker:
HD

Reported earnings: November 19

  • Adjusted earnings per share: $US2.53 reported versus $US2.53 (expected)
  • Revenue: $US27.22 billion reported versus $US27.72 billion (expected)
  • Same-store sales: +3.6% reported versus 4.6% (expected)

Full-year EPS guidance: Maintained expectation of $US10.03 but trimmed full-year comparable sales to 3.5% from 4% and revenue outlook to growth of 1.8% from 2.3%

Stock decline post-earnings through Thursday’s close: -8%


2. Kohl’s

Image

Ticker:
KSS

Reported earnings: November 19

  • Adjusted earnings per share: 74 cents, versus 86 cents (expected)
  • Revenue: $US4.36 billion, versus $US4.40 billion (expected)
  • Comparable sales growth: 0.4%, versus 0.8% (expected)

Full-year EPS guidance: $US4.75 to $US4.95, versus prior guidance of $US5.15 to $US5.45

Stock decline post earnings through Thursday’s close: -19%


3. Macy’s

Image

Ticker:
M

Reported earnings: November 21

  • Adjusted earnings per share: 7 cents reported, versus 1 cent (expected)
  • Revenue: $US5.17 billion reported, versus $US5.30 billion (expected)
  • Same-store sales: -3.9% reported, versus -1.2% (expected)

Full-year EPS guidance: $US2.57 to $US2.77, previously saw $US2.85 to $US3.05

Stock decline post earnings through Thursday’s close: -2.3%