Costco, Best Buy to signal consumer pullback: US earnings week ahead - BNN Bloomberg

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The likes of Best Buy, Costco and Dollar Tree are expected to echo the cautionary note sounded last week by retail peers

Walmart, Target and Home Depot as tightened household budgets continue to crimp demand for big-ticket items and curb discretionary spending.

Tuesday: First-quarter earnings for Lowe’s will reveal the impact of unfavorable weather, deflating lumber prices and a pullback in home-improvement spending. Bloomberg Intelligence forecasts a 3% drop in the home-improvement retailer’s comparable sales. Lowe’s will report pre-market. Wednesday: Investors will focus on management comments about inventory levels and store promotions when apparel retailers Abercrombie & Fitch , American Eagle Outfitters and Kohl’s post results. Abercrombie, due premarket, is likely to guide second-quarter sales and earnings below consensus, as sales for teens and children remain “very weak” overall, Citi analysts say.

Costco also faces slowing sales growth as shoppers pull back on big-ticket discretionary items. The company’s comparable sales in March were weaker than expected. Nonetheless, BI sees continued strength in food and sundries sales as consumers spend more selectively. Easing inflation in some categories may also allow Costco to lower prices, helping sustain high membership-renewal rates.

 

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