This morning, the world’s biggest retailer reported results for the third quarter. Wal-Mart’s (WMT) earnings per share came in at $1.15, in-line with the Estimize consensus, but beating the Wall Street consensus by $0.03, only up a penny from Q3 2013. Revenues on the other hand missed both estimates, coming in at $118.08B. Same store sales increased 0.5%, topping expectations and ending a six quarter stretch of flat or declining figures. CEO Greg Foran said that strength was seen across many categories, “I’m encouraged by our performance during key seasonal events. We had a strong back-to-school results in apparel, home and school supplies, and we ended the quarter well by executing a strong Halloween event.” This seems to bode well for the holiday shopping season, with Wal-Mart recently announcing they will kick off Black Friday beginning at 6 p.m. on Thanksgiving Day, along with Macy’s, Target, Sears and others. Deep discounting will undoubtedly be seen amongst the retailers this holiday shopping season, but Wal-Mart is in a good position to successfully manage margins and inventories in light of the trend.
Fellow retailer, Kohl’s (KSS), also reported results before the opening bell, and they weren’t as well received. Earnings per share of $0.70 missed big, $0.06 below the Wall Street expectation and $0.09 below the Estimize consensus. Revenues of $4.37B also slightly missed both estimates. Same store sales dropped 1.8% compared to the year-ago loss of 1.6%; this was below company-issued guidance for a 1.4% decline. Based on these results, Kohl’s expects 2014 EPS to be at the lower end of the prior guidance of $4.05–$4.45.
How Are We Doing?
Expectations for S&P 500 earnings growth for the third quarter stand at 11.6%. Revenues are anticipated to come in with 5.0% growth. All 10 sectors are anticipated to post positive YoY growth on both the earnings and revenue front.
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