Retail earnings season is upon us, in case you haven't already noticed.
And although multiple department store chains saw their stocks crater last week on second-quarter results, analysts are saying the environment really isn't as bad as it seems.
In fact, department stores, for the most part, posted better-than-expected results. There has been a "severe overreaction" on the Street, Rick Helfenbein, CEO of the American Apparel and Footwear Association, said.
"The business is not that bad," Helfenbein told CNBC's "Squawk on the Street" on Monday. "I expect good results this week. ... I think we see an improvement."
As of Monday, about 70 percent of retailers and restaurants have reported second-quarter results, with some of the biggest names in retail still on deck.
Last week, Nordstrom was the only one of four department stores, including Kohl's, Macy's and J.C. Penney, to post same-store sales growth — a key metric that Wall Street is looking for — for the period. But this week several companies are expected by analysts to report positive comps, something that could spin the so-called retail apocalypse narrative in another direction.
Home Depot, which reports earnings before the bell on Tuesday, is expected to post comparable sales growth of 4.9 percent, according to a survey of analysts by Thomson Reuters. This would be better than the 4.7 percent growth it saw during the second quarter of 2016.
"Off price, which has been touted as the next segment Amazon will take over — I don't think this is the case at all," MKM Partners retail analyst Roxanne Meyer told CNBC. She added that the third quarter looks to be off to a "clean start" for many, with promotions down in stores and margins improving.
Off-price chain Ross Stores' same-store sales are also forecast to climb, up 2.3 percent, Thomson Reuters said. But this is less than the 4 percent growth that Ross reported one year ago. TJX also saw higher comps of 4 percent in the second quarter of 2016.
Considering the year-over-year declines — though results are still faring better than most of the industry — some analysts have begun to speculate the off-price chains are losing steam.
Nonetheless, Meyer said she is confident that profits and revenues will fall in line with, or better, Street expectations for the retailers reporting this week, and outlooks should be reiterated.
Looking to the big-box retailers, Wal-Mart and Target are both in the midst of different strategies today — one in acquisition mode and the other investing more back in its own business.
Since acquiring Jet.com, Wal-Mart's e-commerce has accelerated, and the company is now reportedly in talks to buy Birchbox.