World's Biggest Retailers Reveal Holiday Sales Results

In the past holiday season, retailers across the country struggled to sell too much stuff that customers didn't want, resulting in a low sales volume. There will be an avalanche of markdowns in the near future, and it will be interesting to learn how much profit they lost due to an avalanche of markdowns.

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Among the top three retailers in the country are Walmart Inc. WMT, Home Depot Inc. HD and Alibaba Group Holding Ltd. As a result of inflation siphoning away consumer demand for groceries and other basic items, retail chains sat on clothing, electronics, and toys that they had hard time selling last year, which caused retailers to sit on these items. In order to entice customers, retailers rolled out big price cuts on many non-food items to entice them to purchase.

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Generally, analysts agree that the larger the chain, the greater the advantage it will have in that environment. It's especially true if the retailer sells groceries.

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While Walmart and Target Corp. TGT, which both sell a lot of groceries, reported mixed third-quarter results. Target predicted falling same-store sales for the fourth quarter in November; however, Walmart did better at the time. And analysts still like Walmart's odds, comparatively, ahead of its report.

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Oppenheimer analysts said of Walmart in a research note published this month that they expect continued momentum in the grocery category to offset challenges in the general merchandise category.

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A retail consumer-traffic analytics firm, Placer.ai, recently provided MarketWatch with holiday-season data that wasn't particularly encouraging.

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“Pent-up demand, accumulated savings, and an early start all contributed to an unusually robust holiday season for 2021, as a result of pent-up demand, accumulated savings, and an early start, thus making it difficult to assess the success of 2022's holiday season,” Placer.ai said in a blog post.

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“In October and November 2022, Target, Walmart, Costco, BJ’s Wholesale, and Sam’s Club visited fewer stores than they did last year, probably due to last year’s extended holiday season,” the post continued.

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Although trends improved somewhat in December, firm analysts forecast a more sluggish January due to higher prices.

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“However, traffic data does appear to indicate that the economic difficulties of 2022 have begun to take a toll on consumers – for most of the superstore chains analyzed, January visits were down compared to previous year, with the exception of Target, which seems to continue its winning streak in the new year,” according to the article.

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Home Depot's results will likely touch on consumer appetite for home improvement, as investors withdraw from the housing market amid rising rates, which will flesh out the story for the broader e-commerce slump and stalled housing industry. After Amazon.com Inc., online retailers eBay Inc. EBAY, Etsy Inc. ETSY, Overstock.com Inc. OSTK and Wayfair Inc. W, which recently announced it would reduce its workforce by 10%, report after Amazon.com Inc. Amazon.com Inc. reported its least profitable holiday quarter since 2014.

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FactSet published a report on Friday indicating that the consumer discretionary sector has been at the top of the list of those leading the S&P 500 in terms of profit declines. However, it can be attributed to Amazon to a large extent.

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Earnings this week

In this holiday-shortened week, 61 S&P 500 SPX companies are expected to release their earnings, including two Dow Jones Industrial Average DJIA companies, according to FactSet.

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BYND also reports, despite cutting staff as it deals with an onslaught of competition, from rivals producing their own imitation meat and those making the real stuff, outside the major indexes. A rebound in the price of bitcoin BTCUSD has led Coinbase Global Inc. COIN to issue results after FTX's crash scorched the crypto landscape. The stock has been moving higher recently amid FTX's downfall.

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Moderna Inc. MRNA reports mixed results from its flu vaccine, as the company decides to continue providing free COVID-19 vaccines. And Warner Bros. Discovery Inc., which oversees HBO, TNT and other channels, may provide more insight into the digital ad market and streaming market, as the media giant weighs how much to shuffle operations.

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The calls to put on your calendar

As small bands struggled with higher prices and equipment shortages last year, Live Nation Entertainment Inc. reported that even though concert demand peaked, Ticketmaster rage peaked as well. In spite of decades of high inflation, LYV, the concert industry gatekeeper that owns Ticketmaster and reports earnings on Thursday, had a banner 2022. Despite increased ticket demand, higher ticket prices, and the record sales and profits Live Nation LYV have reaped from the concert industry's post-lockdown revival, there has not been a lack of frustration among fans and scrutiny from lawmakers.

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A federal antitrust investigation is reportedly underway after the botched Taylor Swift concert ticket sale last year, and lawmakers questioned the company last month. Ticketmaster's technological infrastructure was overwhelmed by an onslaught of online traffic from bots, according to Live Nation's Chief Financial Officer Joe Berchtold.

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The prospect of a breakup of the company has been downplayed by many analysts regardless of which way it goes. After the hearing and the investigation, Benchmark analysts said last month that "regulatory clouds" will persist as a result of the hearing. It is likely that executives' perceptions of competition, regulation, and concert demand - which has held up so far despite the decline in demand for other goods - will be discussed during the call.

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The numbers to watch

Nvidia, crypto, gaming, and AI: Nvidia Corp., maker of graphics chips. NVDA, whose processors power PC games, data centers, crypto mining, and AI, reports its results on Wednesday. After demand for PCs, videogames and other digital goods tailed off during the pandemic, it will report after its tech-equipment peers got battered last year. In a note on Thursday, Susquehanna Financial Group analyst Christopher Rolland predicted weaker gaming and PC demand would weigh on Nvidia. Nvidia stands to benefit from a wave of investments in artificial intelligence as other tech firms rush to develop ChatGPTs.