Kalkine Media explores US retail stocks amid sluggish July sales

September 04, 2022 05:30 AM PDT | By Rupam Roy
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  • BBBY stock gained about 75 per cent QTD.
  • MUSA stock touched its 52-week high on August 23, 2022.
  • DBI stock showed gains of 18 per cent YoY.

The current earnings results seemed to have helped the market to reverse its course in recent weeks. The overall market witnessed choppy trading in 2022 due to macroeconomic factors.

This week, several major retail firms have reported their quarterly earnings while providing insights on the broader consumer scenario.

Walmart Inc (NYSE: WMT), Lowe's Corporation (LOW), and Kohl's Corporation (KSS) are among the major retail players who have reported their earnings while attracting the traders’ focus.

Some of the other top players in the retail sector include Bed Bath & Beyond Inc. (NYSE: BBBY), Murphy USA Inc. (NYSE: MUSA), Designer Brands Inc. (NYSE: DBI), Dollar Tree Inc. (NASDAQ: DLTR), and AutoZone, Inc. (NYSE: AZO).  

According to the US retail sales data report released by the Commerce Department on August 17, US retail sales remained unchanged in July due to a slump in gasoline prices and auto purchases.

Consumer spending witnessed stable gains in other categories, helping the figure remain unchanged.

The data showed that US retail sales rose 0.8 per cent in June. Excluding gasoline prices and auto purchases, retail sales increased by 0.7 per cent.

Some experts said that the gasoline price decline had lifted Americans' sentiments while giving them space to spend on other categories. As per the report, nine of the 13 retail categories noted gains in July, that includes building material stores, non-store retailers, electronics, etc.

However, the overall retail sales increased each month in 2022 before July.

Let's take a look at some of the top retail players and their recent stock performance and financial updates curated by Kalkine Media®:  

Bed Bath & Beyond Inc. (NYSE: BBBY)

The retail firm was one of the top-performing retail stocks this year, especially in the current quarter, as seen by the significant jump in its stock price. However, the stock's highly volatile condition in recent weeks has sent its YTD gains in the red.

BBBY stock lost over 40 per cent year-to-date (YTD) while soaring about 75 per cent in the ongoing quarter. However, on an annual basis, it lost nearly 68 per cent.

At its current trading price, Bed Bath & Beyond traded about 99 per cent up from its 52-week low of US$ 4.38, noted on July 1, 2022.

Talking about its financials, the Union, New Jersey-based firm noted a 25 per cent slump in its first quarter fiscal 2022 net sales of US$ 1.46 billion. Its revenue in Q1 FY21 was US$ 1.95 billion.

The retail-store operator also noted a significant increase in its quarterly loss in the first quarter. Its net loss totaled US$ 358 million, or US$ 4.49 per diluted share in Q1 FY22, against a loss of US$ 51 million or US$ 0.48 in the prior year's comparable quarter.

Murphy USA Inc. (NYSE: MUSA)

The leading retail gas station operator, Murphy USA, had a dividend yield of 0.44 per cent and its annualized dividend is US$ 1.28. The firm's stock also maintained a steady momentum so far in 2022 and on an annual basis.

This year, MUSA stock gained about 45 per cent YTD, while on a year-over-year (YoY) basis, it showed gains of around 88 per cent. In the ongoing quarter, it returned nearly 24 per cent gains. It noted its 52-week high on August 23, 2022, when it touched US$ 303.09.

The US$ 7.03 billion market cap company posted total operating revenue of US$ 6.76 billion in Q2 FY22, a jump from US$ 4.45 billion in the year-ago quarter. The second quarter fiscal 2022 net income of the El Dorado, Arkansas-based firm was US$ 183.3 million, or US$ 7.53 per diluted share, up from US$ 128.8 million, or US$ 4.79 per diluted share in Q2 FY21.

Murphy USA announced a quarterly cash dividend of US$ 0.32 per share, or US$ 1.28 per share annually, a surge of three per cent from the previous quarter. The increased dividend would be payable on September 8 this year.

Designer Brands Inc. (NYSE: DBI)

The footwear and accessories retailer holds a market cap of US$ 1.16 billion, while its dividend yield was 1.21 per cent. DBI stock showed gains of nearly 17 per cent YTD while soaring about 18 per cent YoY. On a quarter-to-date (QTD) basis, it climbed up about 27 per cent.

The stock of the Columbus, Ohio-based company touched its 52-week high of US$ 19.38 on August 16, 2022.

Designer Brands noted a 5.1 per cent increase in its latest quarter net sales of US$ 859.3 million. Its net income also improved to US$ 46.21 million in Q2 FY22, from an income of US$ 42.86 million in Q2 FY21.

The Columbus, Ohio-based firm reaffirmed its comparable sales growth guidance to be mid-single digits in fiscal 2022. Meanwhile, it raised its diluted EPS guidance for fiscal 2022 to be between US$ 2.05 and US$ 2.15, from its prior guidance range of US$ 1.90 to US$ 2.00 apiece.

Dollar Tree Inc. (DLTR) latest quarter earnings highlightsSource: ©Kalkine Media®; © Canva via Canva.com

Dollar Tree Inc. (NASDAQ: DLTR)

The stock of the discount store operator fell about two per cent YTD while increasing over 52 per cent YoY. On a QTD basis, it gained about one per cent.

The US$ 30.98 billion market cap company reported net sales of US$ 6.77 billion in Q2 FY22, up 6.7 per cent from US$ 6.34 billion in the year-ago quarter. Its net income rose 27.4 per cent to US$ 359.9 million in the latest quarter.

In the second quarter, Dollar Tree repurchased 1,664,717 shares at an average price of US$ 141.67, for a total value of US$ 235.8 million.

The Chesapeake, Virginia-based firm now expects its consolidated net sales to be between US$ 27.85 billion and US$ 28.10 billion in fiscal 2022. Its diluted EPS guidance range for the year is US$ 7.10 to US$ 7.40 per share, which shows an increase of 25 per cent YoY at the mid-point.

AutoZone, Inc. (NYSE: AZO)

The automotive parts and accessories retailer holds a market cap of US$ 41.81 billion. The AZO stock soared about two per cent YTD while jumping about 39 per cent in the last 12 months. It traded flat in the running quarter. The stock touched its 52-week high of US$ 2,362.24 on August 16 this year.

AutoZone posted net sales of US$ 3.9 billion in Q3 FY22, up 5.9 per cent YoY. The net income of the Memphis, Tennessee-based company was US$ 592.57 million, or US$ 29.03 per diluted share in Q3 FY22, versus an income of US$ 596.16 million, or US$ 26.48 per diluted share in Q3 FY21.

Bottom line:

The retail sector was among the worst hit during the Covid-19 pandemic. The global supply chain hurdles immensely impacted the performance of the industry. However, investors also hope the sector will recover with the economy recovering.

However, talking about the performance of the consumer sectors, the S&P 500 consumer discretionary sector fell about 23 per cent YTD while losing about 16 per cent in the last 12 months.

On the other hand, the S&P 500 consumer staples sector was down about five per cent this year while gaining over one per cent YoY.


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