Diamonds and Dogs

5/18/22

TJX (TJX) bucking the trend. The clothing retailer is up 6% following earnings. Earnings were not great, beating by 8 cents as sales missed estimates and then provided downside guidance for the second quarter. Many of the retailers are providing downside guidance. Profit margins were better than expected as shoppers are clearly gravitating more to discounted merchandise as cost inflation causes wholesale and consumer prices to spike. Didn't work for Walmart. TJX was trading at a 52 week low yesterday.

Not a good time for retail. Target (TGT) is down 25%, worst drop since 1987, following disappointing earnings. Target missed by a wide margin as revenue rose 4% to $24.83 billion. The company went on to lower guidance as a surge in costs during the first quarter shows little sign of easing. Target's fuel and freight costs soared in the first quarter while a shift in consumer spending caused a sharper-than-expected slowdown in apparel and home-goods sales, prompting the company to mark down bloated inventories.

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