Here’s what you should have seen this week……
Earnings season hit its final stretch this week, and it delivered some of the sharpest single-day moves of the year. Big-box retailers kept posting healthy numbers even as shoppers stayed price-focused, Best Buy proved tech upgrades still sell, and Dick’s Sporting Goods had a session it will not want to remember. Here is the recap.
EARNINGS SHOCK
Dick’s Sporting Goods Suffers Its Worst Trading Day Ever
Dick’s shares plunged more than 30% on Tuesday, the steepest single-day drop in the company’s history, after second quarter revenue and earnings missed Wall Street targets and management slashed full year guidance. The company’s core Dick’s banner actually grew comparable sales nearly 5%, but that strength was overwhelmed by its Foot Locker business, which the retailer bought for roughly 2.4 billion dollars last year. Foot Locker posted a same-store sales decline and an operating loss for the quarter.
Executives pointed to an unusually promotional athletic footwear and apparel market, thinner product launches, and cautious consumers as the culprits, and said Dick’s had to cut prices to stay competitive. Wall Street responded by hacking price targets across the board, though several analysts, including CNBC’s Jim Cramer, argued the sell-off was overdone given Dick’s remains the last national sporting goods chain with real scale.
• Stock closed down roughly 30.7% to about $124, its worst session on record
• Foot Locker comparable sales fell 3.6% with an operating loss for the quarter
• Full year adjusted EPS guidance cut, with multiple banks trimming price targets by 20 to 30%
EARNINGS BEAT, STOCK SLIPS
Best Buy Raises Its Outlook, but Investors Aren’t Buying It
Best Buy beat across the board on Thursday: revenue of 9.8 billion dollars topped estimates, comparable sales climbed 4.1% against a forecast of roughly 1.6%, and adjusted earnings of 1.47 dollars per share cleared expectations. The company raised its full year revenue guidance to a range of 42.3 to 42.8 billion dollars and lifted its adjusted EPS outlook to 6.70 to 6.90 dollars, crediting an AI-driven hardware upgrade cycle pulling shoppers toward new computers and phones.
Shares still fell around 5% on the day. Part of the caution stems from a 34 million dollar tariff-refund benefit that padded the quarter, along with warnings that computer sales growth is likely to cool later in the year. Outgoing categories like large appliances remain soft, while newer bets such as AI glasses and 3D printers are picking up some of the slack. CEO transition news added to the backdrop, with Jason Bonfig set to take over as incoming CEO.
• Comparable sales +4.1%, more than double the Street’s 1.6% estimate
• Full year comp sales guidance raised to 1.9%–3.0% from a prior range of -1% to +1%
• Shares fell roughly 5% despite the beat, on durability concerns tied to tariff refunds
BIG BOX WRAP-UP
Walmart, Target and Home Depot Show a Resilient but Price-Sensitive Shopper
The week capped a heavy stretch of big-box earnings. Walmart, Target and Home Depot all reported sales gains, describing a consumer still willing to spend but hunting for the right price on the right product. Target’s turnaround under new CEO Michael Fiddelke continued to draw attention, with traffic and comparable sales both improving after a rough stretch, while Walmart’s scale and grocery mix kept it the steadiest performer of the group despite a stock that has cooled off this year.
Off-price chains had a strong showing too. TJX and Ross Stores both reported solid results earlier in the week, and Burlington capped the group Thursday with adjusted earnings that topped consensus and raised full year guidance, even though shares dipped on cautious third quarter commentary. Across the broader retail and restaurant index, roughly 73% of companies that have reported second quarter results have beaten earnings estimates, though the market’s reaction this week showed investors are parsing the details closely rather than rewarding headline beats alone.
• Target Q1 comps of +5.6% with traffic +4.4%, momentum that carried into this week’s report
• Burlington Q2 adjusted EPS of $2.37 beat consensus of $2.18, but shares fell on soft Q3 guidance
• 73% of the 165 retail and restaurant companies reporting Q2 results have beaten earnings estimates so far
LEADERSHIP SHAKE-UP
Gap Taps a New CEO to Turn Around Old Navy
Gap Inc. shares jumped this week after the company named a new chief executive for Old Navy, its largest and most closely watched banner. The move signals renewed urgency to fix a brand that has struggled to keep pace with off-price and fast-fashion competitors even as Gap’s namesake brand has shown signs of a genuine comeback over the past two years.
TRADE & TARIFFS
Cross-Border Retailers Keep Adjusting to the Tariff Fight
North of the border, Canada’s roughly 27.6 billion dollar counter-tariff package targeting hundreds of U.S.-origin goods continues to reshape pricing, sourcing and shelf labeling decisions for Canadian retailers, with a Buy Canadian movement pushing more shoppers toward domestic brands. Loblaw reversed course on dropping country-of-origin labeling from produce after backlash, a reminder that tariff politics are increasingly playing out on the shelf edge, not just in boardrooms.