As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the consumer retail industry, including Walgreens (NASDAQ:WBA) and its peers.
Shares of used-car retailer America’s Car-Mart (NASDAQ:CRMT)
fell 22.2% in the morning session after the company reported disappointing second-quarter results that widely missed analyst expectations.
Used-car retailer America’s Car-Mart (NASDAQ:CRMT) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 1.5% year on year to $341.3 million. Its GAAP loss of $0.69 per share was significantly below analysts’ consensus estimates.
America's Car-Mart (CRMT) reported a wider-than-expected Q1 FY2026 loss. Revenue fell to $341.3M, missing estimates. The company saw improved margins but a 5.7% decline in sales volumes.
A number of stocks fell in the afternoon session after markets pulled back with the decline concentrated in the tech space as investors engaged in profit-taking following a robust week that saw the S&P 500 hit a new record.
Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names.
But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential.
However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.
Shares of used-car retailer America’s Car-Mart (NASDAQ:CRMT)
jumped 3.5% in the morning session after the company announced it had regained compliance with Nasdaq's periodic filing requirements, ensuring its continued listing on the exchange. The used car retailer confirmed it had satisfied Nasdaq's Listing Rule 5250(c)(1) after submitting its Annual Report on Form 10-K for the fiscal year ended April 30, 2025. This confirmation from Nasdaq's Listing Qualifications Department closes the matter, removing the risk of delisting and providing clarity for investors.
A number of stocks jumped in the afternoon session after markets continued to rally amid growing investor optimism for a Federal Reserve interest rate cut in September. This optimism was spurred by a recent Consumer Price Index (CPI) report that did not show runaway inflation, increasing the perceived probability of a rate cut to over 90%. Lower interest rates are generally seen as a positive for the economy as they reduce borrowing costs for consumers, which can stimulate spending on non-essential goods. Consequently, investors bid up shares in the apparel, home furnishings, and automotive retail industries in anticipation of stronger consumer demand.
A number of stocks fell in the afternoon session after a hotter-than-expected wholesale inflation report fueled concerns about slowing consumer spending. The market was rattled by a Labor Department report showing the Producer Price Index (PPI), a measure of wholesale inflation, jumped 0.9% in July, significantly exceeding economists' expectations of a 0.2% rise. This was the largest monthly increase since March 2022, reigniting worries that businesses will be forced to pass higher costs on to consumers, who are already showing signs of price sensitivity. This inflation data has fanned concerns that U.S. tariffs on imported goods could start to translate into higher prices for shoppers. The inflation report landed amid growing evidence of consumer caution, with recent reports highlighting that shoppers are cutting back on non-essential spending, seeking out sales, and trading down to cheaper brands.
Retailers are evolving to meet the expectations of modern, tech-savvy shoppers. Still, demand can be volatile as the industry is exposed to the ups and downs of consumer spending.
This has stirred some uncertainty lately as retail stocks have tumbled by 2% over the past six months. This drawdown was discouraging since the S&P 500 returned 5.7%.
Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
A number of stocks fell in the morning session as the broader market tumbled in the morning session after a surprisingly weak U.S. jobs report and the announcement of new, widespread tariffs on imported goods. The U.S. economy added only 73,000 jobs in July, falling far short of the 109,000 forecast. Compounding the issue, job gains for May and June were revised down by a combined 258,000, signaling what some see as “increasing signs of fragility” in the labor market. Simultaneously, the White House announced new tariffs, ranging from 10% to 41%, on goods from 92 countries. This “double whammy” of negative news has intensified fears that ongoing trade wars are damaging the U.S. economy. The combination of a weaker labor market and new trade barriers has rattled investor confidence, fueling expectations that the Federal Reserve may be forced to cut interest rates to support the economy.
The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer.
However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.
Shares of used-car retailer America’s Car-Mart (NASDAQ:CRMT)
fell 3.4% in the morning session after the company announced a delay in filing its annual report and stated that its financial statements for the past two fiscal years should not be relied upon.
