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Walmart, Target, Costco earnings preview

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With retail earnings season about to kick off, Placer.ai, a data analytics company that measures foot traffic, warns that most companies are facing a tough year-over-year holiday season comparison. But pre-pandemic data tell a different story.

In a report on how Target Corp.
TGT,
-0.76%
,
Walmart Inc.
WMT,
+1.50%
,
Costco Wholesale Corp.
COST,
+0.67%
,
BJ’s Wholesale Club Holdings Inc.
BJ,
-0.50%

and Sam’s Club are faring, Placer.ai found that the strength of 2021, as shoppers emerged from lockdown, made for a difficult comparison with 2022. “Pent-up demand, accumulated savings, and an early start drove an unusually robust season in 2021, so assessing the success of 2022’s holiday season is challenging,” Placer.ai wrote. “Visits to Target, Walmart, Costco, BJ’s Wholesale, and Sam’s Club were down in October and November 2022 relative to 2021, likely a result of comparisons to last year’s extended season.”

In November, visits to Target were down 3.3% compared to the same period in 2021, with Walmart down 4.5% and Costco down 5.9%. BJ’s Wholesale Club and Sam’s Club were down 4.1% and 2.5%, respectively.

But by December, the year-over-year visit gaps had narrowed significantly, with all brands seeing traffic more or less on par with 2021 numbers, according to Placer.ai. This indicated that superstores still played a major role in consumers’ holiday shopping and party prepping routine, according to the data analytics company.

“Still, traffic data does seem to indicate that the economic difficulties of 2022 have begun to take a toll on consumers – January visits were down for almost all superstore chains analyzed, with the exception of Target that seems to be continuing its winning streak in the new year,” Placer.ai said.

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Visits to Target in January 2023 were up 4% compared with January 2022, although Walmart was down 4.5% and Costco declined 5.2%. BJ’s Wholesale Club and Sam’s Club were down 6.2% and 3.3%, respectively.

However, comparisons with 2019, before the Covid-19 pandemic hit, painted a much rosier picture, according to Placer.ai. “While November 2022 visits were slightly lower than November 2019 visits – likely due to the reduced importance of Black Friday, year-over-three-year (Yo3Y) visits in October and December 2022 were up almost across the board,” the analytics company wrote.

Target and Sam’s Club, which is owned by Walmart, posted the biggest gains over the three-year period, although Walmart saw the biggest visit slump. However, citing its location intelligence, Placer.ai says the traffic dip was “likely just a temporary setback.”

Walmart reports its fourth-quarter results on Feb. 21 and Target reports its fourth-quarter results on Feb. 28. Costco reports its fiscal second-quarter results on March 2 and BJ’s Wholesale Club reports its fourth-quarter results on March 9.

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Walmart’s stock has risen 5% over the last 12 months, while Target has fallen 16.4% and Costco is down 2.1%. BJ’s Wholesale Club is up 13.6%. The S&P 500 Index
SPX,
-0.28%

is down 6.8% over the same period.

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