Walmart (NYSE:WMT): It has been no secret that Walmart (WMT) is trailing Amazon (NASDAQ:AMZN) as an ecommerce retailer. Its acquistion of Jet.com is a direct message to Amazon that they are coming for them. In FQ2 2017 online sales rose 11.8%, much better than the 7% increase recorded in the prior quarter. Along with boosting online sales the company is focused on creating a better customer experience and lowering prices even further. These initiatives might generate sales but they will also pressure margins in the short-term.
Same store sales have come in positive for eight consecutive quarters, driven by 7 quarters of increasing traffic. Walmart’s biggest advantage over Amazon and other online retailers is its expansive grocery and fresh food offerings. Walmart’s are often considered one stop shops for families to do their weekly grocery shopping and to pick up anything else they might need. The adoption of these services amongst online retailers have yet to gain traction. Amazon is of course testing this out as part of its Amazon Prime services. In the meantime, Walmart, Target Corporation (NYSE:TGT) and Costco (NASDAQ:COST) will have the upperhand in this segment.
In preparation for its biggest quarter of the year, Wal-mart just announced it’s plans for Black Friday. The holiday shopping event will begin at midnight on Nov 24, and will offer “something for everyone – from $1.96 movies to a $30 Sharper Image Video Drone and a $798 65-inch Samsung (KS:005930) HDTV.”
Best Buy Co Inc (NYSE:BBY): In the last couple of years, many have written off Best Buy (BBY) as a showroom for Amazon. The rising popularity of online retail has really taken its toll on the electronics store in recent years, forcing the company to expand its omni channel capabilities and push more frequent discounts to compete in the rapidly changing environment.
This has taken its toll on quarterly results in the form of higher operating expenses and lower margins. However, bottom-line growth still appears to be intact, a trend that analysts expect to continue into Q3. Revenue growth is where the concern lies, still expected to come in flat for the second quarter in a row.
While comparable store sales only increased 0.8% in Q2, comparable online sales up-ticked by an impressive 24%. Strength in wearables, home theater, appliances and computing have kept growth afloat while phones and gaming suffer. With the popularity of the iPhone 7, investors will be looking for signs that the latest iteration of the smartphone boosted overall sales as the retailers heads into its most important quarter of the year.
JM Smucker Company (NYSE:SJM): Strong organic sales growth, product innovation and constant efforts to expand through acquisitions have led to robust quarterly results over the past year for SJM. The second quarter though was a bit of a surprise to investors who had become accustomed to large beats and robust growth. Revenue missed analysts estimates by a wide margin in part due to lower demand and unreasonably high expectations.
Shares have been trading lower since then but are currently higher on the year. The acquisition of Big Heart Pet Brand, launch of Dunkin K cup pods, and expanding distribution of key pet brands will help support top line growth. Meanwhile lower coffee prices are expected to result in greater performance for its overall coffee business in fiscal 2016.
The Childrens Place Retail Stores (NASDAQ:PLCE): Shares of PCLE are soaring in the past week after analysts at Bank of America upgraded the stock to buy just ahead of its earnings report. Its recent history of topping analysts estimates coupled with robust growth rates have led to a 60% in the stock this year.
Despite ongoing woes in the retail environment analysts are optimistic that Children’s Place can pull out another victory tomorrow. The retailer has found success in its mall-based stores, something you don’t find many other retailers claiming anymore, while maintaining a very modest store openings and closure process. Any projections on holiday season sales will have more bearing than the actual results.
Staples Inc (NASDAQ:SPLS): Staples (SPLS) business model continues to be hurt by wider adoption of Amazon as well as the abandonment of pen and paper in favor of digital note taking. Staples of course doesn’t only offer office supplies but has seen a major pullback in recent years from the technological advancements offing its core business.
To top it off, currency headwinds and economic uncertainty in Europe are playing a key role in its misfortunes. Shares are down 30% in the past 12 months and typically trade lower immediately through an earnings report.