Earnings season came to its unofficial end today with the release of Q2 results for Walmart (WMT).  As shown in the snapshot of our Earnings Explorer below, the earnings slate has slowed considerably but there are still several reports per day over the next month. The busiest day will be August 27th with 37 reports.

Similar to today, retail earnings dominate the upcoming calendar. While WMT and Home Depot (HD) blew the doors off their reports, upcoming earnings will give a better picture of how the consumer has been impacted by the pandemic. Over the next month there are 52 retailers scheduled to report second-quarter results.  Of these retailers, less than half are expected to show positive EPS.  Companies that have historically beaten EPS the most include Ollie’s Bargain Outlet (OLLI), Ulta Beauty (ULTA), and Restoration Hardware (RH). In terms of topline results, Vipshop (VIPS), OLLI, and Alibaba (BABA) have topped sales forecasts the most consistently.

In terms of stock price reactions, Land’s End (LE) has averaged the strongest performance on earnings days with an average full-day gain of just under 6% with positive returns a little better than half the time. Sportsman’s Warehouse (SPWH) is the only other stock on this list to have averaged a gain of more than 5% on earnings days. SPWH along with ULTA, and Burlington Stores (BURL) have also been the ones to most consistently experience a positive stock price reaction.

Given retailers tend to be fairly seasonal businesses, the table below looks only at these companies’ beat rates and average stock price reactions in just their reports for the Q2 earnings season.  As shown, Sportsmans Warehouse (SPWH) has most consistently topped EPS and sales estimates. SPWH has averaged a 9.11% gain following its Q2 reports.  On a side note, PDD has a 100% beat rate for its Q2 earnings season reports, but it has only had one prior report during the Q2 earnings season.  While SPWH has seen positive returns, stocks like At Home Group (HOME), Duluth Trading (DLTH), and Vipshop (VIPS) have all averaged the worst performance fin reaction to their Q2 earnings reports.

As for where retail stands ahead of their earnings, the snapshot below from our Trend Analyzer shows the 20 most overbought stocks in the sector.  Many of the stocks making the cut are retailers that are currently extremely overbought after sizeable runs.  As of Monday’s close, the average S&P 500 retail stock is 1.7 standard deviations above its 50-DMA. Click here to view Bespoke’s premium membership options for our best research available.

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