This week started with fears over economic instability that triggered a broad stock market selloff. Many retailers have been impacted by consumers prioritizing affordability amid persistent inflation.
We are summarizing Dick’s and Kohl’s 2025 forecasts that joint a growing list of retailers projecting a difficult 2025. Concerns over declining consumer confidence, President Donald Trump’s tariff policies, and weaker-than-expected job growth have fueled fears of an economic downturn. The CEO of L’Oréal said in an interview that the effects of US tariffs are not “overly concerning.”
Continue reading for ideas to navigate the downward market trend.
Dick’s Sporting Goods Forecasts Weaker-Than-Expected 2025 Profits Amid Economic Uncertainty
On Tuesday, Dick’s Sporting Goods revealed that its projected 2025 profits are expected to fall well short of Wall Street estimates. This is just the latest retailer of many more preparing for a difficult year as customers are expected to struggle with tariffs, inflation, and growing concerns of a recession.
Following the announcement, shares of Dick’s Sporting Goods dropped almost 6% in early market trading.
Unlike many retailers struggling with a challenging consumer environment, Dick’s managed to grow both sales and profits. Fiscal Q4 Results vs. Wall Street Estimates:
– Earnings per share: $3.62 vs. $3.53 expected
– Revenue: $3.89 billion vs. $3.78 billion expected
For the quarter ending February 1, the company reported a net income of $300 million, or $3.62 per share, compared to $296 million, or $3.57 per share, in the previous year. Sales rose slightly to $3.89 billion, marking a 0.5% increase from the $3.88 billion reported a year prior.
2025 Outlook Falls Short of Expectations
Looking ahead, Dick’s Sporting Goods anticipates:
– Earnings per share: Between $13.80 and $14.40, falling short of Wall Street’s expectation of $14.86
– Net sales: Projected between $13.6 billion and $13.9 billion, aligning with analysts’ high-end estimates
– Comparable sales growth: Forecasted between 1% and 3%, compared to the expected 2.5% increase
The conservative outlook comes amid growing concerns over weakening consumer confidence, inflation-driven price increases, and worsening economic conditions. Numerous retailers have also issued mindful forecasts for the current quarter, citing lower consumer demand and external economic pressures.
Investing in Growth Amid Market Uncertainty
Despite economic concerns, Dick’s plans to ramp up investments in its “House of Sport” concept and e-commerce platforms, initiatives that are expected to impact short-term profitability but drive long-term growth.
The House of Sport stores feature unique attractions such as rock-climbing walls and running tracks, designed to enhance the in-store shopping experience. In 2025, the company plans to allocate $1 billion toward the expansion of this initiative, adding 16 new House of Sport locations and 18 Field House stores.
Should You Invest In Dick’s Sporting Goods Now?
Dick’s Sporting Goods could benefit from rising enthusiasm for sports and fitness in the U.S. despite broader market challenges. The upcoming 2026 FIFA World Cup in North America, the growing popularity of women’s sports, and an increasing consumer focus on health and wellness are all expected to provide favorable market conditions for the sporting goods retailers in the coming years. Before you buy Dick’s consider our top 5 picks to buy now. They might offer better returns in the coming years.
Kohl’s reported stronger-than-expected earnings and revenue for the fourth quarter on Tuesday, but its stock plummeted over 16% in early trading after issuing significantly weaker-than-anticipated guidance for the year ahead.
2025 Conservative Projections
For 2025, the retailer forecasts a revenue decline of 5% to 7%, far exceeding Wall Street’s expected 1.6% decrease. Sales are projected to drop between 4% and 6%, compared to analysts’ estimate of a 0.9% decline. Additionally, Kohl’s anticipates earnings per share to range between $0.10 and $0.60, well below the midpoint estimate of $1.23.
During the earnings call, CEO Ashley Buchanan admitted the company had lost focus on core product categories like fine jewelry and proprietary brands, instead prioritizing new categories that failed to resonate with shoppers. He also acknowledged the restrictive coupon policies that frustrated customers, but assured investors that the company is reversing some of those changes.
Significant Reorganization Plan
Shares of Kohl’s have fallen more than 60% over the past year. This is most likely the main reason why Kohl’s has undergone major restructuring changes in recent months, including the appointment of Buchanan as CEO in January, replacing Tom Kingsbury. In an effort to streamline operations, the company announced layoffs affecting nearly 10% of its corporate workforce and the closure of 27 underperforming stores by April.
E-commerce Revenue
Kohl’s e-commerce revenue and stores open for at least 12 months declined 6.7% year over year, slightly better than Wall Street’s projected 6.8% drop. Net income for the Q4 2024 fell sharply to $48 million ($0.43 per share) from $186 million ($1.67 per share) in the prior-year quarter.
CFO Jill Timm noted that while in-store sales remained strong, digital sales underperformed, particularly in the legacy home category. However, Kohl’s beauty segment saw a 13% comparable sales increase, driven by the continued success of its Sephora partnership.
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L’Oréal CEO Says Tariffs Won’t Be a Major Issue, but Prices Could Rise
L’Oréal, the world’s biggest beauty brand, is facing growing competition from all sides—big luxury brands like Hermès and Kering launching their own beauty lines, as well as smaller, social media startups. Competition paired with lower consumer demand could be the reason why L’Oréal’s stocks are falling just over 20% in the last year.
CEO Nicolas Hieronimus is betting on innovation to stay ahead sharing that every year, 10-15% of L’Oréal’s business comes from new products.
L’Oréal’s 2024 Performance
L’Oréal, known for brands like Maybelline, Garnier, and La Roche-Posay, had a strong 2024, despite a slower beauty market. However, the company missed expectations in the fourth quarter, with sales growth slowing by 2.5%.
U.S. sales were weak, and China’s demand continued to decline. Still, Hieronimus remains optimistic about North America’s growth potential.
2025 Expectations
L’Oréal recently bought a 10% stake in Galderma, a company specializing in injectable beauty treatments. It has also started working with clinics in North America and China to better understand the aesthetics market.
Additionally, L’Oréal is expected to announce new developments in nutricosmetics later this year. Exploring the growing interest of beauty products that support skin, hair, and nails from within.
L’Oréal may not be hit too hard by U.S. tariffs, according to CEO Nicolas Hieronimus, because most of L’Oréal’s products sold in the U.S. are made here. However, he added that tariffs most likely will be manageable “as long as it doesn’t turn into a global trade war.”
Is the Market Sell-Off a Great Buying Opportunity?
Recent market volatility has left many investors wondering is now a good time to buy or stay on the sidelines. While sell-offs can be nerve-wracking, they often present attractive buying opportunities for those with a long-term perspective.
Investors who buy quality stocks at discounted prices during periods of uncertainty often see significant gains when conditions improve. Key indicators, such as corporate earnings, economic growth, and interest rate trends, suggest that while there are many short-term risks, the broader market outlook remains positive.
Sectors such as technology, healthcare, and consumer staples tend to offer resilience during downturns, while blue-chip stocks with strong balance sheets may provide stability. Additionally, investing at regular intervals can help mitigate risks associated with timing the market.
Investors should focus on fundamentally strong companies with sustainable growth, rather than chasing short-term rebounds.
Ultimately, while market volatility can be unsettling, history suggests that patient investors who buy during downturns are often rewarded in the long run.
