A survey of North American equities heading in both directions
On the rise
Shares of Canada Goose (GOOS-T) jumped over 19 per cent on Wednesday even though it withheld from providing its fiscal 2026 forecast due to uncertainty stemming from the implementation of U.S. President Donald Trump’s tariffs.
However, the Toronto-based luxury retailer reported strong quarterly sales.
The parka maker joined several other companies in either withholding, cutting or withdrawing expectations for the year following the Trump administration’s unpredictable tariff shifts.
There are some U.S. tariffs but the majority of the company’s products are not under these levies, CEO Dani Reiss told Reuters.
The tariff policies sparked a global trade war, rattling several businesses and Americans, who are now bracing for a surge in product prices. Retail behemoth Walmart has already hiked prices on some items.
Canada Goose, which leans heavily on winter clothing, saw strong sales during the key January to March season, partly aided by a Lunar New Year campaign in China, its biggest market that generates 31.7 per cent of its total revenue. Greater China revenue surged 63.1 per cent.
In the United States, a marketing campaign with fashion designer Haider Ackermann, which kicked off in November, aided a 15.3-per-cent rise in quarterly revenue. The country accounts for 24.3 per cent of total revenue.
Benefits from leaner inventory levels as well as robust growth of 15.7 per cent in direct-to-consumer channel strengthened its margins.
The company’s quarterly gross margin was 71.3 per cent, compared with 65.1 per cent a year ago. The company’s quarterly revenue rose to $384.6-million, from $358-million a year ago. Analysts estimated $356.4-million, according to data compiled by LSEG.
On the decline
Brookfield Corp.‘s TSX-listed shares (BN-T) were lower by 3.8 percent on a report Spain’s Bankinter has submitted a binding bid for Livensa, a student accommodation platform owned by the Canadian fund, in what would be one of the largest deals in the sector in recent years.
Spain’s Cinco Dias said that Bankinter was one of the parties interested in acquiring the platform, which is valued at around 1.2 billion euros (US$1.36-billion), according to unidentified real estate sources.
A source told Reuters that the Canadian fund CPPIB and venture capital giant KKR were also among the interested parties.
Target (TGT-N) slashed its annual sales forecast on Wednesday after posting a sharp fall in quarterly same-store sales, attributing the declines to weakened consumer confidence and a pullback in discretionary spending due to U.S. President Donald Trump’s tariff war.
Shares of the company were down 5.2 per cent after Target also said that its first-quarter performance was impacted by changes made to its diversity, equity and inclusion policies (DEI) in January.
The big-box retailer’s results showcase the pressure that American consumers are under due to growing economic concerns. In May, consumer sentiment slumped further while one-year inflation expectations surged. That followed the first contraction in the U.S. economy in three years in the first quarter due to a flood of imports as businesses and retailers raced to avoid higher costs from tariffs.
Target’s forecast on Wednesday was in contrast to bigger rival Walmart (WMT-N), which maintained its annual forecasts last week but said it would need to pass on higher prices to customers due to tariffs. That drew the ire of Mr. Trump, who said the retail giant should “eat the tariffs” on imported goods instead of passing on the costs to consumers.
Investors so far have not shown much confidence in Target’s strategy to focus on middle-income consumers and reliance on selling non-essential items. Its stock has performed poorly, down nearly 28 per cent this year, in contrast to Walmart’s 9-per-cent gain and Home Depot’s 2.3-per-cent decline.
“Target’s (results) do nothing to restore confidence in the company. On the contrary, they are emblematic of a business that has made too many mistakes and has lost its way on several fronts,” GlobalData managing director Neil Saunders said, pointing to issues including a lack of exciting merchandise and poor inventory management.
Target executives did not say whether they would raise prices due to tariffs when asked about that on a call with reporters, stating only that it continuously adjusts pricing.
CEO Brian Cornell said current pricing decisions will largely depend on ongoing efforts to source more products in the United States and reduce reliance on China.
“That is going to play a very important role,” Cornell said. Providing further details, Rick Gomez, the company’s chief commercial officer, said Target is working on several options including negotiating with suppliers, expanding sourcing to other Asian countries beyond China, re-evaluating its product assortment, and adjusting the timing and quantity of orders.
“These efforts are expected to offset the vast majority of the incremental tariff exposure,” Gomez said.
Unlike Walmart, which generates the bulk of revenue selling grocery items like bananas, milk, toilet paper, and shampoo, a majority of what Target sells falls in the non-essential category - largely apparel, home furnishing and beauty products, which it sources from China.
Target has previously said that it depends on China for 30 per cent of its goods and that it is on track to reduce that to less than 25 per cent by the end of the year. This is down from 60 per cent in 2017, but still makes the current 30-per-cent tariff on China imports hard to navigate, analysts have said. Target has noted that about 50 per cent of its cost of goods sold are made in the U.S.
Target said Wednesday it now expects a low-single digit decline in annual sales, a surprise for Wall Street analysts, who expected a 0.27-per-cent rise, according to LSEG. Target previously forecast net sales growth of around 1 per cent.
The retailer expects annual adjusted earnings between US$7.00 and US$9.00 per share, compared to its prior forecast of US$8.80 to US$9.80. Analysts were expecting US$8.40.
Several U.S. companies have either withdrawn, cut or withheld forecasts, citing the Trump administration’s on-and-off tariff strategy that has roiled global markets.
Target’s first-quarter comparable sales fell 3.8 per cent, compared to analysts’ estimates of a 1.08-per-cent decline. On an adjusted basis, Target reported US$1.30 per share. Analysts on average were expecting US$1.61 per share.
Lowe’s Cos (LOW-N) slid 1.8 per cent after it posted a smaller-than-expected drop in first-quarter comparable sales on Wednesday, helped by customer spending on home maintenance projects even as they held off on big-ticket purchases amid higher borrowing costs.
The home improvement retailer also reaffirmed its annual forecast, a day after rival Home Depot (HD-N) did the same.
Atlanta-based Home Depot also said it would not raise its prices, betting that its diversified supply chain and stronger hold in the professional customer base would help it tide over tariff-led uncertainty.
The move was at odds with retail giant Walmart, which last week warned that shoppers could soon face higher prices due to the U.S. tariffs.
Escalating fears over the economic impact of Mr. Trump’s trade policy have led to a plunge in consumer sentiment in recent months, further driving customers away from large-scale renovation projects that typically require refinancing.
Lowe’s CEO Marvin Ellison said the company was operating amid “near-term uncertainty and housing market headwinds”, but strategic investments in its stores and technology have lifted its sales.
The company has expanded its business serving professional customers, such as home builders and property managers, to counter sluggish demand in do-it-yourself categories. It has also added more local suppliers to mitigate any impact from tariffs.
Lowe’s sources roughly 40 per cent of its products from outside North America, including China and Mexico.
The company said it expects comparable sales for 2025 to be flat to up 1 per cent and earnings per share in the range of US$12.15 to US$12.40.
Lowe’s reported a 1.7-per-cent drop in same-store sales for the quarter ended May 2, compared with analysts’ average estimate of a 2-per-cent decline, according to data compiled by LSEG.
Chinese search engine giant Baidu (BIDU-Q) on Wednesday reported better-than-expected first-quarter revenue, fueled by increasing demand for its AI cloud services.
The developer of the Ernie AI chatbot offset losses in its advertising market by growing its AI cloud segment, which provides cloud computing, AI-powered solutions, and services to enterprises.
U.S.-listed shares of Baidu lost 4.3 per cent in Wednesday trading.
Total revenue in the first quarter rose 3 per cent to 32.45 billion yuan (US$4.50-billion), beating analysts’ average estimate of 30.9 billion yuan, according to data compiled by LSEG.
Baidu’s online marketing business, which contributes the majority of its revenue, fell 6 per cent to 17.31 billion yuan. Analysts had estimated 17.39 billion yuan.
Its non-online marketing revenue reached 9.4 billion yuan, up 40 per cent year over year, mainly driven by its AI cloud business.
The company reported profit of 21.59 yuan per American Depositary Share, compared with profit of 14.91 yuan per share a year earlier.
Baidu has intensified its focus on AI in recent years to reduce its dependence on advertising revenue from its core search engine business.
In early 2023, the company was among the first to launch a chatbot following Microsoft-backed OpenAI’s release of ChatGPT in late 2022.
Moderna (MRNA-Q) fell 7.8 per cent after it said on Wednesday it has withdrawn an application seeking approval for its flu and COVID combination vaccine candidate for adults aged 50 years and older.
The company would resubmit the application later this year with vaccine efficacy data from a late-stage trial of its experimental seasonal influenza vaccine, it said.
Moderna expects interim data from the trial to become available this summer.
The company’s decision comes a day after the U.S. Food and Drug Administration said it would require new clinical trials for approval of annual COVID-19 boosters for healthy people under 65 years.
Palo Alto Networks (PANW-Q) forecast fourth-quarter revenue above Wall Street estimates on Tuesday, on expectations of a surge in demand for the company’s cybersecurity solutions to tackle rising online threats.
The growing risk of high-profile online hacks and data breaches has boosted the demand for digital protection services, such as those provided by Palo Alto.
Analysts believe that the cybersecurity sector is benefiting from the AI revolution. Palo Alto is in a good position to capitalize on growing deal activity as more enterprises roll out strategic AI initiatives throughout the year.
Cybersecurity remains largely insulated from the broader spending volatility and will continue to be one of the top investment areas for customers, they have said.
However, shares of the Santa Clara, California-based company were down 6.8 per cent as its operating expenses increased 12 per cent in the third quarter and revenue came roughly in line with estimates.
Palo Alto projected fourth-quarter revenue between US$2.49-billion and US$2.51-billion, compared with analysts’ average estimate of US$2.49-billion, according to data compiled by LSEG.
For its fiscal 2025, Palo Alto sees revenue in the range of US$9.17-billion to US$9.19-billion, compared to its prior projection of US$9.14-billion to US$9.19-billion. Analysts expect US$9.17-billion.
Revenue for the third quarter, ended April 30, stood at US$2.29-billion. Adjusted profit per share came in at 80 US cents, above estimates of 77 US cents apiece.
TJX Cos (TJX-N) maintained annual forecasts and beat Wall Street expectations for first-quarter sales on Wednesday, as shoppers looking for deals to save money in the face of growing economic uncertainties flocked to the stores of the off-price retailer.
Fears of a potential recession and accelerating inflation triggered by hefty tariffs imposed by countries across the globe have pushed people to rethink their spending patterns, boosting demand for off-price and discount goods.
Investors and analysts have said off-price retailers such as TJ Maxx, which rely on expansive sourcing strategies and inventory management, mostly from middlemen in the U.S., can largely sidestep any direct hit from the new China tariffs in the near term.
The TJ Maxx parent’s fiscal 2026 forecast assumes that it can offset the significant incremental pressure it has experienced and continues to expect from tariffs.
It expects annual comparable sales to be up 2 per cent to 3 per cent and earnings per share to be in the range of US$4.34 to US$4.43.
Shares of the company were down almost 3 per cent on Wednesday.
TJX’s net sales were at US$13.11-billion for the quarter ended May 3, compared with analysts’ average estimate of US$13.01-billion, according to data compiled by LSEG.
Semiconductor supplier Wolfspeed (WOLF-N) is preparing to file for bankruptcy within weeks, as it struggles to address its debt pile, the Wall Street Journal reported on Tuesday, citing sources familiar with the matter.
Shares of the company fell 59.1 per cent.
Wolfspeed has been grappling with sluggish demand in industrial and automotive markets and tariff-induced uncertainty.
The company is looking to file for Chapter 11 bankruptcy that would have the support of a majority of its creditors, after rejecting several out-of-court debt restructuring proposals from creditors, the report said.
With files from staff and wires