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Aug. 25, 2018, 9:06 a.m. EDT

Retailers are hot again — here are the earnings and sales winners

Trump’s tax cuts and strong consumer spending lead to favorable results for retailers

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By Philip van Doorn, MarketWatch


Bloomberg
Five Below reported a 27% increase in quarterly sales, while its profit shot up by 160%.

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.

Don’t miss: These seven stocks prove that retail is roaring

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% .

The data

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%
Source: FactSet

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”:

/zigman2/quotes/210599714/realtime
US : S&P US
3,337.75
-35.48 -1.05%
Volume: 2.12B
Feb. 21, 2020 5:16p
loading...
/zigman2/quotes/210599897/delayed
US : S&P US
2,084.33
-21.79 -1.03%
Volume: 551.13M
Feb. 21, 2020 5:16p
loading...
/zigman2/quotes/210599868/delayed
US : S&P US
1,009.62
-11.34 -1.11%
Volume: 505.96M
Feb. 21, 2020 5:16p
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 2,095.97
-57.13 -2.65%
Volume: 4.65M
Feb. 21, 2020 4:00p
P/E Ratio
91.06
Dividend Yield
N/A
Market Cap
$1043.39 billion
Rev. per Employee
$359,671
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 2,095.97
-57.13 -2.65%
Volume: 4.65M
Feb. 21, 2020 4:00p
P/E Ratio
91.06
Dividend Yield
N/A
Market Cap
$1043.39 billion
Rev. per Employee
$359,671
loading...
/zigman2/quotes/208073591/composite
US : U.S.: NYSE
$ 4.01
-0.29 -6.74%
Volume: 1.57M
Feb. 21, 2020 6:30p
P/E Ratio
4.87
Dividend Yield
0.00%
Market Cap
$208.22 million
Rev. per Employee
$154,281
loading...
/zigman2/quotes/206215053/composite
US : U.S.: NYSE
$ 30.31
+0.53 +1.78%
Volume: 9.07M
Feb. 21, 2020 6:30p
P/E Ratio
15.36
Dividend Yield
2.11%
Market Cap
$24.27 billion
Rev. per Employee
$269,849
loading...
/zigman2/quotes/202743941/composite
US : U.S.: Nasdaq
$ 115.65
-2.56 -2.17%
Volume: 883,763
Feb. 21, 2020 4:00p
P/E Ratio
42.25
Dividend Yield
N/A
Market Cap
$6.44 billion
Rev. per Employee
$120,803
loading...
/zigman2/quotes/204273018/composite
US : U.S.: NYSE
$ 95.98
-5.47 -5.39%
Volume: 366,774
Feb. 21, 2020 6:30p
P/E Ratio
15.82
Dividend Yield
4.71%
Market Cap
$1.11 billion
Rev. per Employee
$1.19M
loading...
/zigman2/quotes/208403734/composite
US : U.S.: Nasdaq
$ 28.61
+0.37 +1.31%
Volume: 1.23M
Feb. 21, 2020 4:00p
P/E Ratio
12.57
Dividend Yield
N/A
Market Cap
$2.77 billion
Rev. per Employee
$171,766
loading...
/zigman2/quotes/207257694/composite
US : U.S.: NYSE
$ 117.46
-4.40 -3.61%
Volume: 914,570
Feb. 21, 2020 6:30p
P/E Ratio
13.65
Dividend Yield
2.34%
Market Cap
$8.99 billion
Rev. per Employee
$269,638
loading...
/zigman2/quotes/208674659/composite
US : U.S.: Nasdaq
$ 57.10
+0.17 +0.30%
Volume: 1.11M
Feb. 21, 2020 4:00p
P/E Ratio
26.80
Dividend Yield
N/A
Market Cap
$3.64 billion
Rev. per Employee
$179,718
loading...
/zigman2/quotes/203407380/composite
US : U.S.: Nasdaq
$ 34.96
-1.43 -3.93%
Volume: 95,156
Feb. 21, 2020 4:00p
P/E Ratio
12.75
Dividend Yield
0.97%
Market Cap
$496.20 million
Rev. per Employee
$220,899
loading...
/zigman2/quotes/209429711/composite
US : U.S.: NYSE
$ 14.80
+0.04 +0.27%
Volume: 4.51M
Feb. 21, 2020 6:30p
P/E Ratio
9.72
Dividend Yield
3.72%
Market Cap
$2.46 billion
Rev. per Employee
$89,683
loading...
/zigman2/quotes/209249105/composite
US : U.S.: NYSE
$ 134.24
+0.05 +0.04%
Volume: 934,396
Feb. 21, 2020 6:30p
P/E Ratio
30.03
Dividend Yield
1.73%
Market Cap
$16.26 billion
Rev. per Employee
$312,824
loading...
/zigman2/quotes/203902116/composite
US : U.S.: NYSE
$ 40.54
-0.54 -1.31%
Volume: 1.52M
Feb. 21, 2020 6:30p
P/E Ratio
11.80
Dividend Yield
3.65%
Market Cap
$6.29 billion
Rev. per Employee
$214,324
loading...
/zigman2/quotes/202697225/composite
US : U.S.: NYSE
$ 106.15
-2.47 -2.27%
Volume: 157,046
Feb. 21, 2020 6:30p
P/E Ratio
11.48
Dividend Yield
1.13%
Market Cap
$1.95 billion
Rev. per Employee
$796,250
loading...
/zigman2/quotes/201854387/composite
US : U.S.: NYSE
$ 16.23
-0.41 -2.46%
Volume: 8.12M
Feb. 21, 2020 6:30p
P/E Ratio
5.25
Dividend Yield
9.30%
Market Cap
$5.01 billion
Rev. per Employee
$197,992
loading...
/zigman2/quotes/210414114/composite
US : U.S.: NYSE
$ 44.55
-0.22 -0.49%
Volume: 2.45M
Feb. 21, 2020 6:30p
P/E Ratio
10.24
Dividend Yield
6.02%
Market Cap
$6.98 billion
Rev. per Employee
$156,814
loading...
/zigman2/quotes/207417762/composite
US : U.S.: NYSE
$ 27.99
-0.82 -2.85%
Volume: 4.31M
Feb. 21, 2020 6:30p
P/E Ratio
13.54
Dividend Yield
4.82%
Market Cap
$7.95 billion
Rev. per Employee
$287,889
loading...
/zigman2/quotes/203357771/composite
US : U.S.: NYSE
$ 28.10
-0.94 -3.24%
Volume: 247,811
Feb. 21, 2020 6:30p
P/E Ratio
8.50
Dividend Yield
1.42%
Market Cap
$1.21 billion
Rev. per Employee
$1.03M
loading...
/zigman2/quotes/203606847/composite
US : U.S.: Nasdaq
$ 28.50
+0.15 +0.53%
Volume: 479,357
Feb. 21, 2020 4:00p
P/E Ratio
22.57
Dividend Yield
3.79%
Market Cap
$574.73 million
Rev. per Employee
$1.53M
loading...
/zigman2/quotes/207159575/composite
US : U.S.: NYSE
$ 99.49
-0.25 -0.25%
Volume: 179,043
Feb. 21, 2020 6:30p
P/E Ratio
10.42
Dividend Yield
N/A
Market Cap
$1.92 billion
Rev. per Employee
$838,341
loading...
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