Retail Sector Performance & Outlook - The retail sector, as tracked by an unspecified index, is up nearly 20% this year [1] - Investors are focusing on retailers' commentary on consumer behavior and the impact of tariffs [1] - E-commerce and grocery businesses are contributing to Walmart's performance, with shares up over 10% this year, while Target, more focused on discretionary items, has dropped nearly 24% [1] Walmart Analysis - Mizuho expects Walmart to report strong same-store sales growth in the US, around 4% [3] - The primary focus for Walmart's report is the potential impact of tariffs on consumers at the start of Q3 [3] - There are concerns about the consumer's willingness to absorb price increases due to tariffs, but so far, it seems manageable [3] - Tariff-related noise may affect Walmart's gross margins due to accounting methods [4] - Further details on Walmart's AI agent investment are desired, as it could drive the next wave of e-commerce growth [4][5] Target Analysis - There's investor dissatisfaction with Target's trajectory and management decisions [6] - The partnership with Ulta is ending unexpectedly, despite previous reports of strong beauty sales (up 7% year-over-year) [6] - Target experienced negative sales growth in the beauty category last quarter, potentially due to competition from Walmart and issues related to Ulta's new CEO [7] - Messy store operations at Target may be a factor in the Ulta partnership ending [8] - A survey indicated that 96% of investors prefer an outside hire as the new CEO for Target, seeking fresh perspectives and significant changes [8] - Brian Cornell's contract extension and retirement age are also factors influencing the CEO situation at Target [9][10] Home Depot & Lowe's Analysis - Home Depot previously stated its intention to generally avoid raising prices despite tariffs, utilizing roam accounting and a portfolio approach [11] - The spring season was not strong, and price increases are being phased in, impacting later stages of the quarter [12][13] - The market is currently more focused on potential rate cuts than Q2 performance, leading to Home Depot and Lowe's outperforming this week [13]

Industry Trend - Rent the Runway introduced young consumers to wardrobe rental [1] - Nuuly seems to be the one actually making wardrobe rental work [1]

Ulta Beauty and Target have mutually agreed not to renew their joint shopping experience when the current agreement ends in August 2026 https://t.co/QgC08yhOUe ...

RT Andy Jassy (@ajassy)Thousands of fresh groceries are now available for Same-Day Delivery orders in 1,000+ U.S. cities and towns, with plans to expand to 2,300+ by end of 2025. Think customers are going to love being able to add fresh produce, milk, eggs, and more to their everyday Amazon purchases in one cart, delivered within hours. ...

Target and Ulta will be ending their in-store partnership, concluding a popular offering that has drawn shoppers interested in trendy beauty products to the big-box retailer https://t.co/zgZJM0Cn7K ...

Indian immigrants Gurmer and Dashmeet Chopra started their careers reselling phone cases on eBay. Today, their fitness-inspired streetwear brand sells out every two weeks online—and is about to launch its first store. (Photo: Ethan Pines for Forbes) https://t.co/dOaFzREz8K https://t.co/HCdqWrTWB5 ...

Core Viewpoint - The market anticipates a year-over-year decline in Target's earnings due to lower revenues, with a focus on how actual results compare to estimates to influence stock price [1][2]. Earnings Expectations - Target is expected to report quarterly earnings of $2.04 per share, reflecting a year-over-year decrease of 20.6% [3]. - Revenue projections stand at $24.87 billion, which is a 2.3% decline from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.11% over the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP of +1.81% suggests recent bullish sentiment among analysts regarding Target's earnings prospects, despite a Zacks Rank of 4 indicating a less favorable outlook [12]. Earnings Surprise History - In the last reported quarter, Target was expected to post earnings of $1.62 per share but only achieved $1.30, resulting in a surprise of -19.75% [13]. - Over the past four quarters, Target has beaten consensus EPS estimates twice [14]. Conclusion - Target does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors when making decisions regarding the stock ahead of the earnings release [17].

Market Expansion - Amazon expands same-day delivery of perishable groceries to 1,000 US cities [1]

Indian immigrants Gurmer and Dashmeet Chopra started their careers reselling phone cases on eBay. Today, their fitness-inspired streetwear brand sells out every two weeks online—and is about to launch its first store.https://t.co/S9HbMigeAD https://t.co/UrT83K02EM ...

Core Insights - Costco Wholesale Corporation (COST) is trading at a forward 12-month price-to-earnings (P/E) multiple of 50, which is above the industry average of 33.02 and the S&P 500's 22.62, indicating a premium valuation [1][2] - Despite this premium, Costco's stock has increased by 8.2% year-to-date, outperforming the industry average rise of 6.9% [5][6] - Membership renewal rates are strong at 92.7% in the U.S. and Canada, contributing to Costco's robust business model [8][9] Valuation and Performance - Costco's current P/E is slightly below its 12-month median of 50.74, suggesting it is relatively cheaper than its recent historical average [1] - Compared to peers, Ross Stores trades at a P/E of 22.72, Dollar General at 18.92, and Target at 13.50, highlighting Costco's premium positioning [2] - E-commerce sales grew by 14.8% in Q3, supported by improved logistics and a new Buy Now Pay Later option [8][11] Membership and Revenue Growth - The company has 79.6 million paid household members, a 6.8% increase year-over-year, with executive memberships growing by 9% [10] - Membership fee income rose by 10.4%, aided by a recent fee hike, contributing approximately 4.6% growth in the quarter [10] - Costco's private-label brand, Kirkland Signature, saw sales growth outpacing overall company growth, with penetration increasing by 50 basis points year-over-year [12] Competitive Landscape - Costco faces increasing competition from rivals like Ross Stores, Dollar General, and Target, which are enhancing their capabilities [13] - Margins are a critical area to monitor, with potential concerns related to selling, general, and administrative expenses, as well as foreign exchange volatility [14] Consensus Estimates - The Zacks Consensus Estimate for the current fiscal year remains stable at $17.97, while the next fiscal year's estimate has decreased slightly to $19.92 [15][17] - Expected year-over-year growth rates are 11.6% for the current fiscal year and 10.9% for the next [17] Investment Outlook - Costco's strong fundamentals and market leadership support its long-term investment case, but its premium valuation suggests a cautious approach [18] - The recommendation is to hold existing positions rather than pursue new investments at current high valuations [18]