What Happened?
A number of stocks jumped in the afternoon session after a trio of major retailers reported stronger-than-expected first-quarter earnings.
The synchronized beat from companies including Target, Lowe's, and TJX signaled a potential turn in consumer discretionary momentum, triggering a sector rotation back into U.S. retail stocks. The results suggest American household spending remains more resilient than analysts had feared at the start of the quarter.
Target, for example, saw a 6.7% increase in net sales, reversing several quarters of decline, with store traffic up 4.4%. These positive reports, particularly from discount-oriented retailers, indicate that while consumers may be navigating inflation, they are still spending, especially when focused on value.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Consumer Discretionary - Apparel and Accessories company Carter's (NYSE: CRI) jumped 3.3%. Is now the time to buy Carter's? Access our full analysis report here, it’s free.
- Consumer Discretionary - Footwear company Wolverine Worldwide (NYSE: WWW) jumped 3.4%. Is now the time to buy Wolverine Worldwide? Access our full analysis report here, it’s free.
- Consumer Discretionary - Travel and Vacation Providers company Marriott (NASDAQ: MAR) jumped 3.4%. Is now the time to buy Marriott? Access our full analysis report here, it’s free.
Zooming In On Marriott (MAR)
Marriott’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 9.1% on the news that the company reported fourth-quarter 2025 results that showed a strong outlook for 2026, even though its earnings slightly missed analyst expectations.
Adjusted earnings came in at $2.58 per share, just under the $2.62 consensus estimate, while revenue of $6.69 billion met forecasts. The key driver for the positive reaction was the company's optimistic forecast for the upcoming year. Marriott's adjusted EBITDA guidance for the full year 2026 was $5.89 billion at the midpoint, which surpassed Wall Street's estimate of $5.72 billion.
This strong earnings outlook overshadowed the slight miss on quarterly profits, signaling to investors that the company anticipates continued profitability. Additionally, the company's adjusted earnings per share guidance of $11.45 for 2026 was in line with analyst expectations, further bolstering investor confidence.
Marriott is up 18.2% since the beginning of the year, and at $370.49 per share, it is trading close to its 52-week high of $378.72 from April 2026. Investors who bought $1,000 worth of Marriott’s shares 5 years ago would now be looking at an investment worth $2,666.
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