The U.S. consumer is alive and well.
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Retailers Target and Lowe’s reported better-than-expected results Wednesday and said they see further strength ahead. Both shares jumped on the results.
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“Traffic and sales continue to grow while our EPS reached an all-time high, driven by the strength of our team's execution and their focus on delivering for our guests,” Target Chairman and CEO Brian Cornell said. “Because of our outstanding performance in the first half of the year and our confidence moving forward, we are increasing our guidance for full-year earnings per share."
Over at Lowe’s things are also looking good.
“Despite lumber deflation and difficult weather, we are pleased that we delivered positive comparable sales in all 15 geographic regions of the U.S,” Lowe’s President and CEO Marvin Ellison said in the earnings release. “This is a reflection of a solid macroeconomic backdrop and continued momentum executing our retail fundamentals framework."
Both companies announced earnings, revenue and same-store sales growth that were ahead of Wall Street's expectations.
Still, for every retail winner, it seems like there is a loser. On Tuesday, Home Depot lowered its forecast due to tariff concerns, and Macy's last week slashed its outlook as it continued to see "massive bleeding off of traffic and of customers."
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But overall, the U.S. consumer appears to be on solid footing powered by record-low unemployment.
The strong showings from Target and Lowe’s come after the Commerce Department said last week that retail sales grew by 0.7% month-over-month in July, more than double what economists were expecting. Consumer spending is followed closely as it accounts for more than two-thirds of economic activity.
“Retail sales have been absolutely on fire,” Storch Advisors CEO and former Toys ‘R’ Us CEO Gerald Storch last week told FOX Business’ “Making Money,” “This latest report is absolutely consistent with that.”