La-Z-Boy, Inc. (LZB) announced its first quarter earnings on Tuesday, August 20. While the residential furniture retailer beat revenue estimates, the company’s stock fell over 3% following the report’s release.

The company posted quarterly sales of $495.5 million. This was up 3% from $481.7 million reported during the same quarter last year and exceeded analysts’ expectations of $479.8 million in sales.

“We were pleased to return to delivered sales growth in the quarter, led by our Wholesale segment, which benefited from higher delivered volume supported by Century Vision's channel expansion strategy,” said La-Z-Boy CEO, Melinda D. Whittington. “Our high quality offering of comfortable, custom furniture with quick delivery is resonating in a challenging marketplace. And while we expect industry fundamentals to be volatile for the foreseeable future, we remain confident in our ability to outperform the market and gain share longer term.”

For the quarter, La-Z-Boy reported net income of $26.2 million or $0.61 per adjusted share. This was a decrease from net income of $27.5 million or $0.63 per adjusted share in the same quarter last year.

The Michigan-based furniture manufacturer, known for its recliners, sofas and chairs, experienced a decline of 3% in delivered sales for the company-owned Furniture Galleries stores to $202 million in the quarter. Wholesale sales increased 5% to $351 million. The company generated $36.7 million in free cash flow for the first quarter, an increase from $12.5 million in the same quarter the prior year. The company expects revenue for the second quarter of fiscal 2025 to be between $495 million to $515 million.

La-Z-Boy, Inc. (LZB) shares ended the week at $41.20, down 3% for the week.

Target Reports Second Quarter Results

Target Corporation (TGT) announced its second quarter earnings report on Wednesday, August 21. The company reported better-than-expected sales and profits causing shares to rise by 12% following the report’s release.

Target reported quarterly revenue of $25.45 billion. This was up 2.7% from revenue of $24.77 billion in the same quarter last year and above analysts’ expectations of $25.21 billion.

“We made a commitment to get back to growth in the second quarter, and the team delivered, all while

expanding operating margins and growing EPS by more than 40% compared to last year,” said Target CEO, Brian Cornell. “We also saw improving trends across our discretionary categories, most notably in apparel, and we are seeing continued strength in beauty. Looking ahead, even as we maintain the measured outlook that has served us well, we are focused on building on this positive momentum by executing our strategy and providing the unique combination of newness and value that consumers can only find at Target.”

The company reported a net income of $1.19 billion or $2.57 per diluted share for the quarter. This was an increase from net income of $835 million or $1.80 per diluted share in the same quarter last year.

Target’s total comparable sales increased 2.0% in the quarter, which reflected a comparable stores sales increase of 0.7%. Digital comparable sales increased by 8.7%. Operating income for the second quarter increased by 36.6% to $1.6 billion, which the company attributed to sales growth and a higher gross margin rate. For the third quarter, Target anticipates earnings of $2.10 to $2.40 per adjusted share with a revised full-year forecast of $9.00 to $9.70 per adjusted share.

Target Corporation (TGT) shares ended the week at $158.50, up 10% for the week.

TJX Posts Earnings

TJX Companies, Inc. (TJX) released its second quarter earnings on Wednesday, August 21. The multinational off-price apparel and home accessories retailer delivered strong revenue, leading to an almost 6% increase in shares following the release.

The company reported second quarter net sales of $13.47 billion, up 6% from $12.76 billion reported during the same quarter last year. This exceeded analysts’ expectations of $13.31 billion.

“The third quarter is off to a strong start,” said TJX Companies CEO, Ernie Herrman. “We marked a milestone for our Company in the second quarter by opening our 5,000th store! Longer term, we are excited about our potential to capture additional market share in all of our geographies and to continue our global growth, while delivering great value to more consumers around the world and driving the profitability of TJX.”

For the second quarter, TJX reported net income of $1.10 billion or $0.96 per diluted share. This was up from $989 million or $0.85 per diluted share reported in the same quarter last year.

The Massachusetts-based parent company to T.J. Maxx, Marshalls and HomeGoods reported an increase in comparable store sales across all store segments, including an increase of 5% at Marmaxx and 2% at HomeGoods. At the end of the second quarter, TJX operated a total of 5,001 stores in nine countries and six e-commerce sites. The company returned $982 million to shareholders through share repurchases and dividends in the second quarter. TJX expects diluted earnings per share to be between $1.06 to $1.08 for the third quarter and between $4.09 to $4.13 for the full year fiscal 2025.

TJX Companies, Inc. (TJX) shares ended the week at $119.47, up 7% for the week.

The Dow started the week at 40,671 and closed at 41,175 on 8/23. The S&P 500 started the week at 5,557 and closed at 5,635. The NASDAQ started the week at 17,650 and closed at 17,878.

U.S. Treasury yields slipped early in the week as traders reacted to the minutes from the Federal Reserve’s latest meeting. Yields rose towards the end of the week after jobless claims data showed layoffs remained low.

On Wednesday, the Federal Reserve released the minutes from its July meeting, in which the Federal Reserve held the key federal funds rate between 5.25% and 5.5%. While the benchmark rates were held steady, the minutes showed that a vast majority of Federal Reserve members believed that a reduction of the current monetary policy measures would be appropriate if the economic data continued to align with their expectations.

“With regard to the outlook for inflation, participants judged that recent data had increased their confidence that inflation was moving sustainably toward 2%,” noted the minutes. “Almost all participants observed that the factors that had contributed to recent disinflation would likely continue to put downward pressure on inflation in coming months.”

The benchmark 10-year Treasury note yield opened the week of August 19 at 3.89% and traded as low as 3.77% on Wednesday. The 30-year Treasury bond opened the week at 4.14% and traded as low as 4.04% on Wednesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment rose by 4,000 to 232,000 for the week ended August 17. This came in higher than economists’ forecast of 230,000 claims for the week. Continuing unemployment claims increased by 4,000, reaching 1.86 million.

“Claims are leveling off on a trend basis, consistent with our view that, while the labor market is softening, it is not weak enough to warrant anything more than a 25 (basis point) rate cut at the Fed's September meeting,” said lead U.S. economist at Oxford Economics, Nancy Vanden Houten.

The 10-year Treasury note yield finished the week of 8/23 at 3.80%, while the 30-year Treasury note yield finished the week at 4.09%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, August 22. The survey showed the 30-year mortgage rate falling to the lowest level in 15 months.

This week, the 30-year fixed rate mortgage averaged 6.46%, down from last week’s average of 6.49%. Last year at this time, the 30-year fixed rate mortgage averaged 7.23%.

The 15-year fixed rate mortgage averaged 5.62% this week, down from last week’s 5.66%. During the same week last year, the 15-year fixed rate mortgage averaged 6.55%.

“Although mortgage rates have stayed relatively flat over the past couple of weeks, softer incoming economic data suggest rates will gently slope downward through the end of the year,” said Freddie Mac’s Chief Economist, Sam Khater. “Earlier this month, rates plunged and are now lingering just under 6.5%, which has not been enough to motivate potential homebuyers. We expect rates likely will need to decline another percentage point to generate buyer demand.”

Based on published national averages, the savings rate was 0.46% as of 8/19. The one-year CD averaged 1.85%.

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