Large-format Grocery & General Merchandise Retailer Stocks Q2 Highlights: Target (NYSE:TGT)

Let’s dig into the relative performance of Target (NYSE:TGT) and its peers as we unravel the now-completed Q2 large-format grocery & general merchandise retailer earnings season.

Big-box retailers operate large stores that sell groceries and general merchandise at highly competitive prices. Because of their scale and resulting purchasing power, these big-box retailers–with annual sales in the tens to hundreds of billions of dollars–are able to get attractive volume discounts and sell at often the lowest prices. While e-commerce is a threat, these retailers have been able to weather the storm by either providing a unique in-store shopping experience or by reinvesting their hefty profits into omnichannel investments.

The 4 large-format grocery & general merchandise retailer stocks we track reported a solid Q2. As a group, revenues beat analysts’ consensus estimates by 1%.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility. Thankfully, large-format grocery & general merchandise retailer stocks have been resilient with share prices up 5.6% on average since the latest earnings results.

Target (NYSE:TGT)

With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE:TGT) serves the suburban consumer who is looking for a wide range of products under one roof.

Target reported revenues of $25.45 billion, up 2.7% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with an impressive beat of analysts’ gross margin estimates and a solid beat of analysts’ earnings estimates.

"We made a commitment to get back to growth in the second quarter, and the team delivered, all while expanding operating margins and growing EPS by more than 40% compared to last year. Importantly, our growth was driven entirely by traffic in stores and our digital channels, with double-digit growth in our same-day delivery services," said Brian Cornell, chair and chief executive officer of Target Corporation.

Target delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 10.4% since reporting and currently trades at $159.47.

Is now the time to buy Target? Access our full analysis of the earnings results here, it’s free.

Best Q2: Costco (NASDAQ:COST)

Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ:COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.

Costco reported revenues of $58.52 billion, up 9.1% year on year, in line with analysts’ expectations. It was a very strong quarter for the company with an impressive beat of analysts’ gross margin estimates and a narrow beat of analysts’ earnings estimates .

Costco achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 8% since reporting. It currently trades at $880.07.

Is now the time to buy Costco? Access our full analysis of the earnings results here, it’s free.

Walmart (NYSE:WMT)

Known for its large-format Supercenters, Walmart (NYSE:WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.

Walmart reported revenues of $169.3 billion, up 4.8% year on year, exceeding analysts’ expectations by 1.2%. It was a mixed quarter for the company with a solid beat of analysts’ gross margin estimates but underwhelming earnings guidance for the full year.

Interestingly, the stock is up 10.5% since the results and currently trades at $75.80.

Read our full analysis of Walmart’s results here.

BJ's (NYSE:BJ)

Appealing to the budget-conscious individual shopping for a household, BJ’s Wholesale Club (NYSE:BJ) is a membership-only retail chain that sells groceries, appliances, electronics, and household items, often in bulk quantities.

BJ's reported revenues of $5.21 billion, up 4.9% year on year, surpassing analysts’ expectations by 1%. Overall, it was a mixed quarter for the company with a decent beat of analysts’ earnings estimates but underwhelming earnings guidance for the full year.

The stock is down 4.1% since reporting and currently trades at $83.97.

Read our full, actionable report on BJ's here, it’s free.

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