The retail industry quickly rehabilitated itself this spring as the COVID-19 pandemic took hold.
Brick and mortar stores amped up their online presence while adding curbside pick-ups and touchless payment systems. Working from home had many Americans turn their attention to do-it-yourself improvement projects and investing in home offices and home classrooms.
Large retailers with the resources and speed to pivot have not suffered as scores of smaller stores have. This week a trio of big stores turn in their latest quarterly financial results.
Walmart and Home Depot will report on Tuesday. Target’s turn is Wednesday. All three are expected to report higher revenues compared to a year ago despite COVID-19.
Investors have been shopping for these shares. Each of their stocks has outperformed the S&P 500 this year.
Despite its size, Walmart has proven to be quite agile. Business is underpinned by its grocery offerings and reputation as a low-cost general retailer. It has been aggressive going after Amazon online. And it is relatively quick seizing opportunities, such as expanding its pet services. The pandemic has been a boon for pet adoptions.
All the time at home also has helped Home Depot. (Full disclosure, I own 100 shares.) Sales and profits are expected to have grown by more than 10% each. When optimism rises about a vaccine, Home Depot stock tends to be a loser. However, low interest rates support homebuying, homebuilding and home equity borrowing.
Target has been on a tear this year. Its stock is up about 25% and it has far exceeded profit forecasts in earlier quarters. Maintaining that ability to surprise investors may be difficult, even if the underlying business is robust.
As the transition of power drags on, political control of the U.S. Senate remains uncertain, and the pandemic surges, investors in retailers will be listening for the sound of American shoppers as the holiday selling season fast approaches.
Financial journalist Tom Hudson hosts “The Sunshine Economy” on WLRN-FM in Miami, where he is the vice president of news. He is the former co-anchor and managing editor of “Nightly Business Report” on public television. Follow him on Twitter @HudsonsView.