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Home Depot, Kohl's earnings — What to know in markets Tuesday

Heidi Chung

Retail takes centerstage Tuesday. Two heavyweights, Home Depot (HD) and Kohl’s (KSS), will release quarterly results ahead of the market open.

Home Depot has managed to beat earnings estimates every quarter since November 2012, but a couple of issues have been plaguing the home improvement giant in recent quarters, including the wetter-than-normal weather and lumber pricing pressures.

In late June, Home Depot CEO Craig Menear told CNBC that lumber was pressuring the marketplace. Investors will be keen to see what management says about those challenges during the second quarter.

Management has also previously said that Home Depot wouldn’t feel much pressure from tariffs. About 70% of Home Depot’s goods are domestic, according to the company. Menear has said that Home Depot would do whatever it takes to protect its customer.

Home Depot is expected to report adjusted earnings of $3.08 per share on $30.96 billion in revenue, according to data compiled by Bloomberg. Same-store sales, a key metric for retailers, is expected to have grown 3.5% during the second quarter.

Kohl’s will also report second-quarter results ahead of the opening bell. Analysts are expecting the department store to report adjusted earnings of $1.53 per share on $4.20 billion in revenue. Same-store sales are expected to have fallen 2.3% during the quarter.

Much like the other retailers, tariffs will be a key focal point for investors. Kohl’s currently sources about 20% of its products from China, but its partner brands import their goods from China, so Kohl’s is exposed through those brands indirectly. Analysts are predicting that Kohl’s will slash its full-year guidance in response to the looming tariffs set to go into place later this year.

Investors will also be expecting to hear how Kohl’s partnership with Amazon affected foot traffic during the quarter. In attempt to drive foot traffic to physical Kohl’s stores, the department store announced earlier this year that it would be accepting Amazon returns in all of its locations nationwide.

Kohl’s shares have struggled this year. The stock has plunged nearly 26% so far in 2019, while the broader market rose 18% in the same time period.

Other notable earnings reports scheduled for Tuesday include TJX Companies (TJX) before market open, and Toll Brothers (TOL), Urban Outfitters (URBN) after market close.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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