Retail Roundup: Key Winners and Losers After Q2 Earnings

Key Points

• A home improvement giant and an off-price retailer were notable winners from a week of retail stock earnings.
• TGT is struggling with declining sales and is preparing for a transition in its top leadership position.
• The Federal Reserve's Jackson Hole Symposium was particularly positive for one of these names.

The third week of August saw big-time earnings releases from some of the most important stocks in the retail industry. As these names operate in highly competitive parts of the economy, these earnings cycles often result in big winners and big losers. That held true in Q2, with some names impressing markets and others faltering.

Below, we’ll detail the most notable stocks that were on each side of this equation. All data is as of the Aug. 25 close unless otherwise indicated.

Winner: Home Depot Gets Earnings Boost, Gains on Potential Fed Shift

Home Depot NYSE: HD, America's most recognizable home improvement store, saw its shares gain after the company’s Q2 earnings. Home Depot shares rose more than 3% following its Aug. 19 release despite slightly missing on sales and adjusted earnings per share (EPS). This gain came as the firm maintained its full-year guidance.

This was a particularly good sign as tariffs are significantly higher today than they were at the time of the firm’s Q1 release. Management commentary indicates that Home Depot sources a little less than 50% of its products internationally, making tariffs a key issue.

Home Depot’s shares traded down for several days after the initial reaction to its earnings. However, the stock got another big boost on Aug. 22, gaining nearly 4%. This came as the overall market rallied in reaction to the Federal Reserve’s Jackson Hole Symposium.

The Fed provided commentary that markets saw as increasing the probability of a rate cut. This would be particularly good for Home Depot, as rate cuts typically make housing more affordable, likely resulting in more demand for the firm’s home improvement products.

Overall, MarketBeat tracked several analysts who raised their Home Depot price targets after the report, while only JPMorgan Chase & Co. lowered its already elevated target.

Winner: TJX Boosts Guidance After Q2 Outperformance

TJX Companies NYSE: TJX had a solid Q2, with shares gaining nearly 3% after the firm’s Aug. 20 report. The firm’s revenue and earnings came in much better than Wall Street anticipated. TJX posted a 9-cent beat on adjusted EPS, and its nearly 7% revenue growth rate was considerably higher than the 4.5% expected.

Comparable sales increased by 4%, the same rate as the prior year's quarter. 

The firm also substantially increased its full-year guidance. It now expects consolidated comparable sales growth of 3%, an improvement from its previous range of 2% to 3%.

Additionally, the firm sees its full-year adjusted EPS coming in at a midpoint of approximately $4.55, up nearly 4% from its previous adjusted EPS guidance midpoint.

This guidance increase was partially due to lower-than-expected tariff costs and the firm’s effective mitigation strategies. Despite an uncertain macroeconomic environment, TJX is expanding according to schedule. It expects to add around 130 stores this year and believes it can add more than 1,800 locations in the longer term.

Big Loser: Target’s Sales Are Falling as Walmart Boosts Guidance

The most obvious loser from the latest round of retail earnings was household goods and grocery store Target NYSE: TGT. Compared to Wall Street’s expectations, Target's Q2 results were not something to panic over. The stock beat estimates on both sales and adjusted EPS. But the bar for Target to clear in achieving this was set pretty low.

Sales declined by nearly 1%, and the firm’s comparable sales fell by nearly 2%. This shows that the company lost market share to Walmart, which saw sales and U.S. comparable sales rise by 4.8% and 4.6%, respectively.

The company’s guidance was also not impressive. Target still projects a low single-digit decline in sales for the full fiscal year and holds its adjusted EPS guidance steady. Walmart raised its prediction on both figures and sees sales growing between 3.75% and 4.75% in the full fiscal year.

As Target’s sales are declining, its most important management position is getting a shake-up. Target said its Chief Executive Officer, Brian Cornell, will vacate his position in February 2026.

Michael Fiddelke, Target’s current Chief Operating Officer, will succeed him. Given Target’s business uncertainty, shares have been down nearly 8% since the Aug. 20 report.

Retail Set for Another Big Earnings Week

Some of the biggest names in retail reported results in the third week of August, and more are coming. The fourth week of August will see over 10 more retail stocks report, including Dollar General NYSE: DG and DICK'S Sporting Goods NYSE: DKS.