Walmart stock was one of the five worst performers in the retail sector for the first half of 2021.
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While 2021 is more than half over, there will probably be plenty of more volatility for the retail space.
Retail stocks have largely benefited in recent months: Consumers are flush with cash, looking to refresh their wardrobes as offices and schools reopen, and are still pouring money into their houses. In addition, the meme trade is largely focused on consumer-oriented names, sending some stocks skyrocketing. Not surprisingly, GameStop (ticker: GME) topped the list of the best performing retailers in the first half of the year.
But not every stock can be a winner. Here’s a look at the worst performers for the first six months of 2021.
Grocery Outlet Holding
Grocery Outlet stock (GO) made its trading debut in mid-2019, and saw plenty of initial success. However, unlike other grocers—including Albertsons (ACI), Kroger (KR), and Sprouts Farmers Markets (SFM), all of which are up more than 20% year to date—the stock has been a laggard in the first half of 2021, falling nearly 12%. That is a reversal of fortune from a relatively strong showing during the Covid-19 pandemic. The shares fell double-digits in mid-May, when the company reported weaker-than-expected first-quarter sales.
For the year as a whole, analysts expect Grocery Outlet to earn 97 cents a share, down from $1.14 a share in the previous year. Forty percent of the 15 analysts tracked by FactSet that follow the stock are bullish on Grocery Outlet, while 60% are on the sidelines. The average analyst price target is $40.21, compared with a recent level of around $35.
Dollar Tree
Dollar Tree (DLTR) is the second worst performer in the first half of 2021, falling roughly 8%. The company struggled more than rival Dollar General (DG) during the pandemic, as it carries more discretionary and seasonal items. Even as consumers began to favor those categories, the stock has still struggled. Dollar Tree stock took a hit in late May, after the company offered disappointing guidance and warned of the impact of increased freight costs.
Half of the 28 analysts covering the stock are on the sidelines, while 46% rate it a Buy or the equivalent; there is one bearish call on the Street. The average analyst price target is $117.09; the stock closed at $99.45 Friday. Consensus calls for Dollar Tree to earn $5.97 a share for the full calendar year, up from $5.58 a share the previous year.
La-Z-Boy Inc.
Shares of La-Z-Boy (LZB) fell 5% in the first six months of the year. The company saw a CEO transition earlier this year, amid a surge in furniture sales. Yet the shares tumbled double-digits when the retailer warned that it was facing higher costs and supply chain disruptions.
Analysts expect La-Z-Boy to earn $2.84 a share in calendar 2021, up from $2.47 a share. Two out of the three analysts that cover the stock rate it Sell, while one is on the sidelines. The average analyst price target is $50, compared with Friday’s closing price of $37.18.
Walmart
Walmart stock (WMT) fell a little over 3% in 2021’s first half. A profit miss and muted outlook weighed on the stock’s shares early in the year. While the stock got a boost from the mega-retailer’s most recent earnings report, it still hasn’t recovered to the levels where it began the year. As stimulus funds dwindle, some investors may be worried about increasing labor costs—although that is a worry for the industry as a whole—or stalling growth for the Walmart+ subscription service.
Analysts are looking for Walmart to earn $5.88 a share in 2021. Nearly three quarters of the 37 analysts covering the stock rate it the equivalent of Sell, while just over 20% rate it at Hold or the equivalent. There are two bearish analysts. The average price target is $162.82 compared with Friday’s closing price of $140.11.
TJX Cos.
Shares of TJ Maxx owner TJX (TJX) fell less than 1% in the first half. The stock held up fairly well during the pandemic—considering the off-price retailer has minimal online presence. But in mid-May, the shares fell despite a strong earnings report.
Nonetheless, Wall Street is overwhelmingly upbeat about the stock, with more than 80% of the 27 analysts that cover TJX rating it at Buy or the equivalent. Fifteen percent are on the sidelines, and there’s one bear on the Street. The average analyst price target is $78.83; the stock closed at $68.25 on Friday.
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