By Philip van Doorn, MarketWatch
For a time it seemed as if the entire U.S. retail landscape would eventually get squashed by Amazon.com.
But all of a sudden retailers are reporting surprising news: Consumers have ramped up spending, which has sent their sales, and shares, soaring.
We’ll look at the data behind the excitement and list this quarter’s earnings winners and sales winners.
The federal tax cuts signed into law by President Trump in December weren’t fully implemented by U.S. companies until the middle of the first quarter. So second-quarter earnings season was the first to incorporate the full effect of the tax cuts. That helped earnings, while strong consumer spending powered sales.
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We’re going to show several sets earnings and sales data for retail companies included in the S&P 1500 Composite Index, which is made up of the large-cap S&P 500 /zigman2/quotes/210599714/realtime SPX -1.05% , the S&P 400 Mid-Cap Index /zigman2/quotes/210599897/delayed MID -1.03% and the S&P 600 Small-Cap Index /zigman2/quotes/210599868/delayed SML -1.11% .
Starting with the S&P 1500 Composite Index, we arrived at a list of 83 retail companies, including Amazon.com /zigman2/quotes/210331248/composite AMZN -2.65% and other online retail specialists. First we’ll look at earnings growth and then sales growth.
Second-quarter earnings season is nearly over; however, many companies have fiscal quarter end dates that do not match the calendar, especially in the retail world. So these comparisons are for each company’s most recently reported quarter through Aug. 22, from a year earlier.
Earnings growth winners
Unfortunately, a company’s bottom-line earnings for any one quarter can be confusing because it might be grossly distorted by one-time accounting charges, as well as extraordinary expenses from restructuring, legal settlements or any number of corporate events. This is why investors focus on so many other metrics, including sales growth, comparable-store sales growth, profit margins, etc.
With that said, here are the 20 S&P 1500 profitable retail companies showing the largest increases in quarterly net income according to reports filed through Aug. 22:
|Company||Ticker||Net income - most recently reported quarter ($mil)||Net income - year-earlier quarter ($mil)||Increase in net income||EPS - most recently reported quarter||EPS - year-earlier quarter||Increase in EPS|
|Amazon.com Inc.||/zigman2/quotes/210331248/composite AMZN||$2,534.0||$197.0||1,186%||$5.07||$0.40||1,168%|
|Tailored Brands Inc.||/zigman2/quotes/208073591/composite TLRD||$13.9||$1.8||656%||$0.27||$0.04||575%|
|Kroger Co.||/zigman2/quotes/206215053/composite KR||$2,005.0||$301.0||566%||$2.37||$0.33||628%|
|Five Below Inc.||/zigman2/quotes/202743941/composite FIVE||$21.8||$8.4||160%||$0.39||$0.15||160%|
|Medifast Inc.||/zigman2/quotes/204273018/composite MED||$14.1||$7.6||86%||$1.16||$0.63||84%|
|Urban Outfitters Inc.||/zigman2/quotes/208403734/composite URBN||$92.8||$49.9||86%||$0.84||$0.44||91%|
|Ralph Lauren Corp. Class A||/zigman2/quotes/207257694/composite RL||$109.0||$59.5||83%||$1.31||$0.72||82%|
|Ollie's Bargain Outlet Holdings Inc.||/zigman2/quotes/208674659/composite OLLI||$30.5||$19.0||61%||$0.46||$0.29||59%|
|Shoe Carnival Inc.||/zigman2/quotes/203407380/composite SCVL||$12.9||$8.1||59%||$0.83||$0.48||73%|
|American Eagle Outfitters Inc.||/zigman2/quotes/209429711/composite AEO||$39.9||$25.2||58%||$0.22||$0.14||57%|
|Tiffany & Co.||/zigman2/quotes/209249105/composite TIF||$142.3||$92.9||53%||$1.14||$0.74||54%|
|Michael Kors Holdings Ltd.||$186.4||$125.5||49%||$1.22||$0.80||53%|
|Nordstrom Inc.||/zigman2/quotes/203902116/composite JWN||$162.0||$110.0||47%||$0.95||$0.65||46%|
|Group 1 Automotive Inc.||/zigman2/quotes/202697225/composite GPI||$54.5||$37.7||45%||$2.72||$1.84||48%|
|Macy's Inc.||/zigman2/quotes/201854387/composite M||$166.0||$116.0||43%||$0.53||$0.38||39%|
|Kohl's Corp.||/zigman2/quotes/210414114/composite KSS||$292.0||$208.0||40%||$1.76||$1.24||42%|
|Tapestry Inc.||/zigman2/quotes/207417762/composite TPR||$211.7||$151.7||40%||$0.73||$0.53||38%|
|Sonic Automotive Inc. Class A||/zigman2/quotes/203357771/composite SAH||$17.1||$12.3||39%||$0.39||$0.27||44%|
|PetMed Express Inc.||/zigman2/quotes/203606847/composite PETS||$12.6||$9.3||36%||$0.62||$0.45||38%|
|Asbury Automotive Group Inc.||/zigman2/quotes/207159575/composite ABG||$43.2||$31.9||35%||$2.11||$1.52||39%|
You can click on the tickers for more information about each company, including corporate profiles, news, charts and financials.
As you can see, this approach can lead to some very large swings in earnings, especially if profits in the year-earlier quarter were low. We have also included changes in earnings per share, as these reflect any dilution from the issuance of new shares, as well as any boosts to EPS from buybacks.
Amazon leads the list for earnings growth, although investors over the long term have grown used to the company typically showing low profitability as it invests in various business units.
It is, of course, good to see earnings go up so significantly. But again, keeping in mind the potential distortion of earnings results, sales figures can be much more useful. Here are sales growth figures for the same group of 20 “retail earnings winners”: