Retailers continue to post better-than-expected earnings in the latest quarter – with Walmart , Bath & Body Works and Canada Goose topping estimates. But just like Target and TJX on Wednesday, the current quarter continues to be problematic based on recent retail trends. Walmart’s fiscal second-quarter forecast for adjusted earnings of $1.63 to $1.68 per share is well below the $1.71 estimate. Bath & Body Works’ guidance is lacking , too, at 27 cents to 32 cents per share after adjustments versus the 32 cents estimate. And Canada Goose is predicting a bigger-than-expected loss in the quarter. The good news is that things aren’t looking horrendous for the full year. For now, the strong just-completed quarter is helping, but retailers also aren’t throwing in the towel for the second half. WMT YTD mountain Shares were up more than 2% in trading on Thursday morning. Walmart raised its FY EPS outlook and it’s roughly in line with estimates. Sales growth guidance was raised, too. Bath & Body Works also raised its earnings guidance and reaffirmed its full-year forecast. Canada Goose, which is just starting its new fiscal year, sees revenue above consensus. However, its EPS midpoint is below as the company seems to be struggling with elevated product and input costs. Some other things that stuck out Thursday morning: Walmart had a strong same-store sales beat – something we haven’t seen much of so far this retail earnings season. Walmart U.S. digital sales grew 27% and made up more than one third of the unit’s SSS growth. That’s a stark contrast to Target, which said its digital comparable sales fell 3.4% in the quarter from a year ago. Is Walmart eating Target’s lunch online? Walmart touted it “gained market share in grocery, including with higher-income households.” Is that a Target problem — or is that a problem for Kroger, Albertsons and maybe even Dollar General ? Walmart’s CFO told CNBC’s Courtney Reagan that consumers continue to shift more purchases away from general merchandise to groceries and that there is “some strain” on the consumer “but the resilience has surprised us.” Managing costs is key. Bath & Body Works highlighted better merchandise margin and benefits from cost savings initiatives. No doubt, those factors helped fuel the 7-cent beat. BBWI YTD mountain Bath & Body Works shares soared more than 7% after its earnings report. On the flip side, Canada Goose’s gross margin was a huge disappointment (64.9% vs. 68.8% StreetAccount estimate). The company cited “higher product costs” among other factors for the margin pressure. Fortunately, very strong sales fueled an earnings beat. It may sound familiar. Remember Under Armour’s gross margin problem last week? And just a quick follow-up to Target’s forecast. Recall that it reaffirmed FY guidance despite the weak Q2 forecast. Its CFO told Sara Eisen that efficiency savings from recent restructuring could likely be felt in the second half of the year – so that could be supporting the company’s full-year outlook for now. Plenty more retail fun coming next week. Highlights include: Lowe’s, Dick’s Sporting Goods, Urban Outfitters, VF Corp, Kohl’s, Costco, Gap and Ulta.
