Tuesday's Market Minute: Earnings Stumble Out Of The Gate

Earnings are off to a poorer start this week as Home Depot Inc HD and Kohl's Corporation KSS both missed. Although Home Depot reported revenue was impacted by investments into its business, which may pay off in the longer term, it cut its guidance for the second quarter in a row. It cited tariff impacts and lower lumber prices when it cut last quarter, catalysts that don't seem to have changed. With a number of other homebuilder stocks beating estimates in the last few weeks, Home Depot's miss may have come as more of a surprise than Kohl's.

Retail has been a mixed bag this year, with department stores finding themselves in a difficult environment as Sears and Barneys New York both filed for bankruptcy. Kohl's cut its full year guidance, and this quarter's same-store sales numbers were half of what analysts expected: 0.4% vs 0.8%.

Although Kohl's has employed a number of different strategies to compete with other department stores, including partnerships with celebrities, pop-up stores, and Amazon.com, Inc. AMZN package returns, it seems that might not be enough to see a turnaround. Keep an eye on other big-name stocks reporting this week for a potential preview of the holiday quarter: Target Corporation TGT, L Brands Inc LB, Lowe's Companies Inc LOW, Macy's Inc M, and Gap Inc GPS.

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