In the past few months, we’ve introduced a product called Consumer Pulse that uses survey data from thousands of consumers to identify actionable investment ideas. In the past, we’ve highlighted trends in Apple and Amazon, and today we have another example of how useful this product can be for making investment decisions. Earlier this month, Consumer Pulse subscribers got an update that we had rotated out of Target (TGT) and into Wal-Mart (WMT) based on results from the April survey. Now that both companies have reported Q1 and we’ve seen the thesis play out, we wanted to highlight what we learned through Pulse:
Recent Results: Target reported on 5/18. Q1 earnings actually beat estimates while revenue was a little lower than analyst expectations. However, based on a soft outlook for Q2 and very cautious commentary from management, shares were off by as much as 11% post the earnings release. Bricks and mortar retailers traded off alongside Target on Wednesday as the market prepared for Wal-Mart to release earnings the following day. When Wal-Mart finally did release on Thursday 5/19, WMT holders got a nice surprise as the troubles at Target were nowhere to be found in Wal-Mart.
Survey Says: While the divergence in the fortunes in Wal-Mart and Target caught many market commentators off sides, we were able to observe this trend through our survey data weeks in advance. Among the many trends we follow in our Pulse surveys is store traffic as reported by actual consumers. Based on our most recent surveys, we noticed a clear negative change in Target traffic relative to Wal-Mart and other discount retailers. In fact during the earnings call, Target’s management noted the traffic decline in April, which is exactly what our survey data reflects.
Bespoke subscribers (and now non-subscribers too!) can purchase our Consumer Pulse survey analysis for just $365/year or $39.99/month (including a 30-day free trial). We strongly encourage you to give our Consumer Pulse subscription a try!
As a non-member, you can purchase Consumer Pulse below as a stand-alone product, or subscribe to one of our other memberships and get a big discount on Consumer Pulse. Click here to learn more about the product.