We break down earnings from Target and Lowe’s, as well as discuss the state of the consumer.
Transcript:
Caroline Woods: Christine, who’s better positioned in home improvement to weather the deferral mindset: Home Depot or Lowe’s?
Christine Short: I’m going to go with Lowe’s just based on results out today and their acquisitions within the home professional space, where they see a potential to offset some of the weakness in the home buyers and home improvement home professionals are a little more lucrative. It’s a little more of a steady space, and they’ve had a couple of big acquisitions in that space.
Caroline Woods: Ok, bigger threat to margins: tariffs or inflation?
Christine Short: That’s a good one. It’s hard to say with tariffs because we’re not quite sure what’s going to happen. Inflation is steadily improving in some areas, but as you saw with core CPI the other week, it’s still quite hot. For now, I’m going to go with tariffs. It’s one of the number one mentioned negative impacts within the retail reports last season. And so far this season consumer spending trends holding up or weakening I think they’ve been softening for some time. But given all the headwinds, I’m actually surprised at how resilient the consumer has been.
Caroline Woods: Most surprising earnings call so far?
Christine Short: To be honest, I think Target was a little bit surprising because it wasn’t as bad as we expected. They did surprise to the upside. Everyone was expecting that to just. I know investors still aren’t happy with that report, but if you dig down, there were actually some segments that did better in the second quarter than they did in the first. They beat on the top and the bottom line they beat on same store sales. So I think we were all expecting that one maybe to be a little worse than it ended up coming in.
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