3 Retail Stocks to Watch After a Big Consumer Earnings Week

Many retailers beat earnings estimates last week, but one-time tariff refunds inflated results and masked underlying weakness in some cases. Dollar General and Best Buy delivered high-quality beats, with strong comp sales growth that held up even after stripping out minimal tariff-refund contributions. Williams-Sonoma outperformed a weak home furnishings sector with accelerating comp sales and raised margin guidance that excluded any assumed tariff refunds.

The retail sector was one of the biggest winners in earnings season, which was especially evident in some of the reports that rolled in last week. Eight major retailers reported earnings within 48 hours, and nearly all beat on headline numbers. But headline numbers rarely tell the story, and this quarter was especially deceiving. Tariff refunds have done to earnings what steroids did to baseball players in the 1990s, and these juiced results can mask underlying weakness. Take Abercrombie and Fitch Co. NYSE: ANF , for example, which soared more than 35% after its Q2 release on an impressive double beat and buyback increase. But the company accumulated about $100 million in tariff refunds during the period, boosting margin by 790 basis points (bps) and adding $1.75 to the $4.12 earnings per share (EPS) figure. Another $20 million in refunds is expected in Q3, but comps were weak, especially at Hollister.

To find the real winners, we need to screen out earnings juiced by tariff refunds. That means focusing on comp sales and traffic instead of EPS and revenue, and parsing true operational improvement from one-time windfalls.

Dollar General: The Trade Down King Continues to Grow Traffic Cash-strapped consumers trading down to discount stores has been a boon to Dollar General Corp. NYSE: DG , which seems to impress the market every time a conference call rolls around.

In fiscal Q2 2027 results released Aug. 27, the company once again beat top- and bottom-line estimates, with same-store sales (i.e., comps) up 3.5% and growth spread out across all four merchandise categories. Foot traffic was up for a fifth consecutive quarter, and gross margins expanded by 127 bps. Crucially, the EPS beat wasn’t reliant on tariff refunds. The company earned $2.48 per share in the period, and management estimates that only 25 cents of that figure came from tariff refunds. Removing the one-time tariff boost leaves EPS of $2.23 per share, still well above the expected $2.01 and nearly 17% higher than fiscal Q2 2026’s number of $1.86. Management also raised full-year guidance on revenue, comps, and EPS. DG shares jumped as much as 12% following the earnings call before surrendering most of those gains later in the day. But the bounce off the May lows is confirmed, and the Relative Strength Index (RSI) refuses to dip much below 50. The stock is up 16% in the last three months, and a potential Golden Cross on the 50-day and 200-day moving averages could be the next technical catalyst.

Best Buy: Stock Sell-off Obscures High-Quality Beat Best Buy Co. Inc. NYSE: BBY posted one of the better quarters in the retail sector but fell 4% after the release, despite only $34 million in tariff refunds. High memory costs continue to weigh heavily on computing prices, and management expects this tension to persist th...