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Petroleum industry

Retailers Post Strong Sales, Oil Prices Slip, and Estee Lauder Reports Earnings

Strategic Insights

— 2 min read

Retail sales for April have come in strong, with many retailers posting year-over-year sales increases. Wal-Mart Stores (NYSE:WMT) posted a 6.8-percent increase in same-store sales, while Costco (COST) and Target (NYSE:TGT) also reported better-than-expected same-store sales results. In contrast, oil prices slipped below $70 per barrel for the first time since April 13, with crude futures moving down in response to yesterday's inventory data. Estee Lauder (NYSE:EL) also reported earnings, posting third-quarter earnings of 28 cents per share, which beat analysts' expectations.

Key Takeaways:

  • Wal-Mart Stores (NYSE:WMT) posted a 6.8-percent increase in same-store sales for April, matching the company's own forecast and topping the 5.7-percent gain expected by the consensus.
  • Costco (COST) posted same-store sales growth of seven percent, topping the consensus estimate for growth of 5.5 percent.
  • Target (NYSE:TGT) posted an increase of 10.4 percent in April same-store sales, edging out the consensus estimate of 10 percent.
  • The AMEX Oil Services HOLDRS Trust (AMEX:OIH) lost more than two percent in response to the drop in oil prices, while Exxon Mobil (NYSE:XOM), Halliburton (HAL), and Cooper Cameron (CAM) all lost more than one percent.
  • Estee Lauder (NYSE:EL) reported third-quarter earnings of 28 cents per share, which beat analysts' expectations of 39 cents per share.
  • The company also forecast fiscal 2006 sales growth of three percent and earnings from continuing operations between $1.61 and $1.72 per share.
  • Chico's FAS (CHS), Pier 1 Imports (PIR), and Hot Topic (HOTT) all missed the consensus estimate and are dropping in response.

Statistics:

  • 6.8%: The increase in same-store sales for Wal-Mart Stores (NYSE:WMT) in April.
  • 7%: The same-store sales growth for Costco (COST) in April.
  • 10.4%: The increase in April same-store sales for Target (NYSE:TGT).
  • 5.5%: The consensus estimate for same-store sales growth for Costco (COST).
  • 10%: The consensus estimate for same-store sales growth for Target (NYSE:TGT).
  • $70: The price of crude futures at which they slipped below for the first time since April 13.
  • $2: The price of gas futures that slipped below, a level not seen since mid-April.
  • 28 cents: The third-quarter earnings per share for Estee Lauder (NYSE:EL).
  • 39 cents: The expected earnings per share for Estee Lauder (NYSE:EL) by analysts.
  • 3%: The forecasted sales growth for Estee Lauder (NYSE:EL) in fiscal 2006.
  • $1.61-$1.72: The earnings from continuing operations per share for Estee Lauder (NYSE:EL) forecasted in fiscal 2006.

Sources:

  • Schaeffer's Market Blog, http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1
  • Schaeffer's Investment Research, http://www.SchaeffersResearch.com
  • Forbes, cited on SchaeffersResearch.com, http://www.SchaeffersResearch.com/method

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