Companies and Subjects discussed in this morning's report include: Walmart's overall strong quarter, but with a comp miss, Advance Auto reports a mixed 2Q26, with DIY weakness, Jobless Claims remain very low historically, highlight "low-hire, low-fire" labor market, Ethan Allen tries to fend off activist shareholder...
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DoR Consumer Research
Investor Oriented | Retail & Consumer
Thursday, August 20, 2026 | Published Daily by ~11:30 AM ET
Walmart's Light Comp, Advance Auto's Mixed 2Q26, Jobless Claims Remain Very Low...
THIS WEEK'S CALENDAR
UPDATED EACH MORNING
All Times Are Eastern
Monday (8/17)
- DoRCR publishes its proprietary weekly Store Opening/Closing Analysis
Tuesday (8/18)
- Amer Sports reports 2Q26, call 8:00 am, Street at sales/EPS of $1.54B/$0.11
- Housing Starts for July at 8:30 am, Street at (6.6%) m/m vs. prior +19.0%
- Home Depot reports 2Q26, call 9:00 am, Street at comps up 0.9%, EPS of $4.73
- Pending Home Sales for July at 10:00 am, Street at +0.2% m/m vs. prior (5.4%)
- La-Z-Boy reports 1Q27 after the close, Street at sales/EPS of $501.4M/$0.49
Wednesday (8/19)
- Revolve meeting with investors in San Francisco, hosted by BTIG
- Target reports 2Q26, call 8:00 am, Street at comps up 2.4%, EPS of $2.34
- La-Z-Boy 1Q27 call at 8:30 am
- Lowe's reports 2Q26, call 9:00 am, Street at comps up 0.5%, EPS of $4.22
- TJX reports 2Q27, call 11:00 am, Street at comps up 3.3%, EPS of $1.19
Thursday (8/20)
- Walmart reports 2Q27, call 8:00 am, Street at comps up 3.8%, EPS of $0.74
- Advance Auto Parts reports 2Q26, call 8:00 am, Street at comps up 1.4%, EPS of $0.81
- Jobless Claims for the week ended 8/15/26 at 8:30 am, Street at 211K vs. prior 209K
- Ross Stores reports 2Q26, call 4:15 pm, Street at comps up 7.7%, EPS of $1.95
Friday (8/21)
- DoRCR publishes its proprietary Next Week's Calendar
- BJ's Wholesale reports 2Q26, call 8:00 am, Street at comps up 2.6%, EPS of $1.17
- The Buckle reports 2Q26, call 10:00 am, actual comps up 2.1%, EPS expected at $0.81
**Colors Indicate Directional Change from First Time Shown in Our Calendar**
TODAY'S EARLY TRADING
The S&P Retail ETF (XRT) is down 2.4% as of ~11:00 am vs. a 0.3% decline in the S&P 500. Retail stocks are underperforming significantly after Walmart misses second quarter comp expectations and as Advance Auto Parts reports a mixed quarter, with weakness in DIY.
- Weaker retail stocks include AAP, which is down 23%, also volatile DBGI (down 22%), CATO (down 22%, weak results), WMT (down 10%) and KSS (down 8%).
- Stronger retail stocks include EBAY, which is up 2%, also RVLV (up 2%), ETSY (up 1%, analyst upgrade), ETD (up 1%, special dividend) and DXLG (up 1%).
MARKET-MOVING DEVELOPMENTS
All Stock Prices as of Last Close
- The +2.6% comp follows +4.1% in the first quarter and was driven by a 1.5% increase in transactions and a 1.1% increase in average ticket and also incorporated a 125 bps negative impact from pharmacy headwinds stemming from the MFP legislation/regulation.
- Total revs were $187.94B, up 5% y/y constant currency and also incorporated an 8% increase in International sales and a +4.4% comp at Sam's, traffic up 7.0%, ticket down 2.5%.
- Other revenue callouts: eCommerce grew 23% globally, similar to +26% in the first quarter, and were led by store-fulfilled pickup & delivery and marketplace, Walmart U.S. advertising revs increased 38% after +36%, global membership fees grew 17% y/y.
- Also of note, in-store comps declined by a low-single-digit rate, similar to the prior two quarters, and reflected the Rx weakness, also Walmart's very strong e-comm growth.
- Adjusted EPS were $0.81 vs. $0.68 last year and the Street's $0.74 estimate and with some benefit from tariff refunds, which contributed to 17% growth in operating income, though ex this benefit, operating income would have grown 10%, 4x the comp increase.
- Ending global inventory was up 6% y/y, slightly faster than total sales growth and reflects company strategic initiatives and the impact of inflation.
- Full-year guidance now includes 4%-5% growth in total sales from $706.41B last year, up 50 bps from before, an adjusted op margin of 7.0%-8.5% vs. a prior 6.0%-8.0%, and adjusted EPS of $2.80-$2.87 vs. $2.64 last year and a prior $2.75-$2.85 range.
- CFO John David Rainey spoke to CNBC after the results and made a number of positive comments while also acknowledging consumers are under a bit more pressure than the beginning of the year, mostly b/c of higher fuel prices, but are also "very resilient."
- Rainey said Walmart's back-to-college performance went "exceedingly well" and said he is "pretty optimistic" about holiday with the strong BTC and what appears to be a good BTS.
- DoRCR INSIGHT: WMT is a high multiple stock and was vulnerable to any kind of a slip/miss, and that is what we got here, though the overall numbers are still extremely impressive, especially when considering Walmart's size, and indicate significant share gains from a broader group of customers and growing benefits from higher-margin revenue streams like advertising.
- Comps decreased 0.5% vs. the Street's +1.4% estimate and incorporated a low-single-digit increase in Pro, and weakness in DIY, while total sales were flat y/y at $2.00B.
- Adjusted EPS were $1.03 vs. $0.69 last year and the Street's $0.81 estimate and included the $26M in tariff refunds, which benefitted gross margin, while gross margin ex the refunds increased on expansion in product margin, driven by merchandising initiatives.
- Ending inventories were up 4% y/y after being up 2% in the first quarter.
- FY26 guidance still includes comps up 1%-2%, total sales of $8.49B-$8.58B vs. $8.60B last year, and an adjusted operating margin of 3.8%-4.5%, while mgmt raised the adjusted EPS range by $0.20, to $2.60-$3.30 vs. $2.26 last year, to reflect higher interest income.
- Guidance now assumes 30-35 stores openings, down from a prior 40-45 range, and 15-20 market hub openings, up from a prior range of 10-15 new hubs.
- DoRCR INSIGHT: This is a big setback to what had been a decent execution-driven turnaround under new(er) CEO Shane O'Kelly and appears to reflect macro issues, which you can see in the divergent performance in Pro (more resilient) vs. DIY (sensitive to higher gas prices, etc.).
Analyst Actions that could move retail stocks today:
- TJX (TJX, $144.50) Citi downgrades from Buy to Neutral
- TJX (TJX, $144.50) Gordon Haskett downgrades from Buy to Accumulate
- Etsy (ETSY, $80.46) BofA upgrades from Neutral to Buy
OTHER DEVELOPMENTS
Ethan Allen (ETD, $22.63) announced a special cash dividend of $3 per share, payable 9/17/26 to shareholders of record as of 9/3/26, and also reaffirmed its debt-free balance sheet, disciplined approach to capital allocation and ongoing focus on creating sustainable long-term value as it fends off a push by 5.0% holder Doug Bergeron to replace the entire board.
- Bergeron responded to the announced special dividend, called it a "desperate maneuver that does nothing to address the governance, leadership, strategy, and execution failures."
- Bergeron also said the dividend highlights management's underinvestment in the biz.
The Cato Corporation (CATO, $3.75) had a very weak 2Q26 (July) against no Street estimates as comps fell 3.7% after a +3.0% increase in the first quarter and as EBIT decreased 80% y/y to $1.3M, and management called out pressures on consumers from "persistent inflation, higher fuel prices and continued elevated interest rates" and said it expects the basic dynamic to continue.
- Total sales fell 6% to $163.9M after slight y/y growth in the first quarter.
- Cato closed eight stores in the quarter, finished with 1,057 stores in 31 states.
Target's Food & Beverage sales grew 7% y/y in the second quarter, to nearly $6B, and were driven by factors including an expanded selection of fresh produce and international foods and snacks, including protein bars, meat sticks and health(ier) snacks, while Apparel and Home underperformed but should start to gain traction from assortment changes/improvements.
- Target also made positive comments about back-to-school, noted "broad-based strength in everything from school supplies to kids' apparel to our beauty assortment and beyond."
JD Group (UK), which owns Hibbett, Finish Line, DTLR and Shoe Palace in the US, gave a disappointing trading update for its second quarter, ended July, noted particular weakness in North America, where like-for-like sales fell 6.8%, and cited "weaker core consumer sentiment, a slower quarter for high-heat footwear product, and deferred 'back to school' demand."
- Group like-for-like sales fell 3.1%, and management lowered full-year profit guidance, cited the first half sales trends and industry promos that could continue in the back half.
COMMERCIAL REAL ESTATE
TJX, which has close to 5,300 stores globally, said yesterday it will accelerate store growth from an implied 3% this year to 4% next year and noted "opportunities in rural markets, where we see department stores are closing," and also said it is finding it can locate stores closer to each other than it thought previously and that it is planning a small-format store for dense urban mkts.
- TJX also raised its longer-term store target from 7K to 7,500 and said 300 of the incremental stores will be TJ Maxx and Marshalls stores, while 200 will be HomeGoods stores.
Nike has "quietly" closed all 15 of its Nike Live hyper-localized format stores acc'd to Retail Dive, which notes the format launched in Los Angeles in 2018 as part of Nike's DTC push and says the stores were eventually rebranded to be called Nike Well Collective before being closed.
ALDI USA (2,600+ stores) opened four stores today, three in Florida, in DeFuniak Springs, Eustis and Tarpon Springs, and one in Ohio, in Hamilton Township, plans to open two next Thursday, in New Albany, IN and Springfield, OH, and one in early-September, in Miami, specific locations here, per Store Brands, which notes ALDI USA will enter state #41, Colorado, in coming months.
MANAGEMENT UPDATES
Lululemon Chief Communications Officer since September 2024, company exec since 2019, and former longtime Gap corporate affairs exec Bill Chandler is leaving the company in early September acc'd to Bloomberg, which notes this is the third C-suite departure in front of new CEO Heidi O'Neill's arrival, follows Chief AI and Tech Officer and Chief Strategy Officer departures.
MACRO/CONSUMER INSIGHT
Out at 8:30 am, Jobless Claims for the week ended 8/15/26 were lower than expected at only 206K vs. the Street's 211K estimate and down 6K from a revised 212K the prior week, while Continuing Claims, which are reported with a week's lag, rose by 18K, to 1.80M.
- DoRCR INSIGHT: Reassuring to see another low Jobless Claims number after the weak Nonfarm Payrolls for July report -- down 23K -- supports the "low-hire, low-fire" narrative around the labor market, and with Unemployment at only 4.1%, is positive for consumer spending.
Out Tuesday and acc'd to the U.S. Energy Information Administration, a gallon of regular Unleaded Gasoline cost $4.05 on average across the US for the week ended 8/17/26, up $0.04 from the prior week and up $0.92 per gallon from the same week last year.
- A gallon of diesel cost $5.45, up $0.19 on the week and up $1.74 from last year.
- DoRCR INSIGHT: Gas prices could come down quickly with a US/Iran peace deal and reopening of the Strait of Hormuz, but for now, the significant y/y increase is a meaningful headwind to discretionary spending, esp by lower-income consumers (e.g. core dollar store customer).
Also out Tuesday, Pending Home Sales for July were weaker than expected and fell 2% m/m vs. the Street's estimate and reflected declines across all regions of the country, while Pending Home sales also fell 2% on a year-over-year basis when compared to July 2025.
- DoRCR INSIGHT: High mortgage rates -- the average 30-year fixed rate mortgage was 6.5% in July -- continue to suppress housing turnover, but there are signs of life in some areas of retail more dependent on home sales, including furniture, based on recent reports from Wayfair, which grew US revs by 9% in the second quarter, and Arhaus, which grew comp written sales by 12.5%.
Source: Labor Dept and Bloomberg (for chart)
SELECT ANALYST ACTIONS
The TJX Companies (TJX, $144.50) Citi downgrades from Buy to Neutral and lowers its target from $182 to $154 after the 2Q27 (July) results, says the +1% comp at Marmaxx was "weak and disappointing" and notes better performance by TJX's off-price competitors, also says the risk/reward profile in the stock is no longer attractive given a tougher competitive backdrop.
The TJX Companies (TJX, $144.50) Gordon Haskett downgrades from Buy to Accumulate and lowers its target from $175 to $155 after the 2Q27 (July) results, has concerns about the slower comp growth at Marmaxx and says it was the division's weakest comp in four years, with some of the slowdown likely reflecting competitive pressures from Ross Stores and Target.
Search Select Analyst Actions for the past 12 months here
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