[Earnings Recap] Estée Lauder Soars 16%, Target Gains 4% — Is the Consumer Rebound?
Consumer earnings were in focus Wednesday, and the market reactions were surprisingly strong. Estée Lauder surged 16% as China and fragrance demand improved, while Target gained 4% after raising its full-year outlook. Lowe’s also moved higher despite softer sales, while TJX fell even after beating expectations.
$Estee Lauder(EL)$ +16.3%
Estée Lauder is a global beauty company behind brands including Estée Lauder, Clinique, M.A.C, Tom Ford Beauty and Le Labo.
Estée Lauder delivered a strong finish to fiscal 2026, with Q4 sales of $3.63 billion, ahead of the $3.54 billion Wall Street expected. Adjusted EPS came in at $0.39, beating the $0.32 consensus.
Luxury fragrance remained the standout. Fragrance sales rose 10%, helped by Tom Ford and Le Labo, while China also showed improving momentum. For fiscal 2027, Estée Lauder expects adjusted EPS of $3.10–$3.35, with the midpoint above consensus.
Shares jumped 16.3% Wednesday, as investors gained confidence that the company’s turnaround is finally gaining traction.
$Target(TGT)$ +4.3%
Target is one of the largest U.S. general-merchandise retailers, selling everything from groceries and household goods to clothing and electronics.
Target’s Q2 net sales rose 5.3% to $26.5 billion, while comparable sales increased 3.8%. EPS doubled to $4.11, though that figure included a $1.65-per-share benefit from roughly $1 billion in tariff refunds.
The underlying business also improved. Digital comparable sales rose 8.7%, traffic increased, and Target raised its full-year sales growth outlook to around 5%. Full-year EPS guidance was lifted to $9.90–$10.90.
Shares gained about 4.3%, with investors looking past the one-time tariff benefit and focusing on signs that Target’s sales turnaround is holding.
$Lowe's(LOW)$ +4%
Lowe’s is one of the largest U.S. home-improvement retailers, selling building materials, appliances, tools and renovation products.
Lowe’s reported Q2 EPS of $4.27, above the $4.22 consensus, while adjusted EPS reached $4.40. Revenue came in at $25.96 billion, slightly below the $26.16 billion expected, and comparable sales rose just 0.2% versus expectations for 0.8%.
The outlook was softer. Lowe’s now expects full-year comparable sales to be flat, down from its previous range of flat to +2%, as consumers remain cautious on larger DIY renovation projects. Contractor, repair and home-services demand held up better.
Shares still rose about 4%, helped by hopes that lower mortgage rates could eventually support housing turnover and home-improvement spending.
$TJX Companies(TJX)$ -4.2%
TJX is the off-price retailer behind T.J. Maxx, Marshalls, HomeGoods and several international discount chains.
TJX beat expectations, with adjusted EPS of $1.22 versus $1.19 expected and revenue of $15.2 billion, slightly ahead of consensus. Comparable sales rose 4%, while HomeGoods and international comps both climbed 7%.
Management raised full-year EPS guidance to $5.15–$5.20, but investors focused on weaker performance at Marmaxx, where comparable sales rose just 1%. TJX said merchandise-mix execution hurt the division during the quarter.
Shares closed down 4.2% despite the beat, as investors weighed the slower growth outlook for the second half against an already strong valuation.
Today’s discussion:
Target +4% or Estée Lauder +16% — which stock would you rather own after earnings?
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I also like $Target(TGT)$ setup, with stronger traffic, digital sales growth and a raised full-year outlook. However, part of the EPS strength came from tariff refunds, so I’d like to see more evidence that earnings can continue improving without one-off benefits.
For me, EL has more upside potential, while TGT is the steadier recovery play. I’d choose EL, but wouldn’t chase the 16% move—I’d rather wait for a pullback and see if the fundamentals continue improving.
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