In this episode of MarketFoolery, host Chris Hill and analyst Seth Jayson talk about a few of the market's biggest stories. Target's (NYSE:TGT) earnings report wowed Wall Street, and its long-term strategies are setting it up to just keep winning. But with the stock popping like it did, is the retailer still a buy for long-term investors?

Meanwhile, Lowe's (NYSE:LOW) once again put up results that were just a little worse than Home Depot's (NYSE:HD). But this time, new CEO Marvin Ellison shook up the gloomy monotony with some tangible change. Red Robin Gourmet Burgers (NASDAQ:RRGB) is struggling, but you know who isn't? Midwest burger chain Culver's. Plus, the guys share some blunt, practical advice for any marathoners out there. Tune in and find out more.

A full transcript follows the video.

This video was recorded on Aug. 22, 2018.

Chris Hill: It's Wednesday, August 22nd. Welcome to Market Foolery! I'm Chris Hill. With me in studio ...

Seth Jayson: Again!

Hill: Again, back by popular demand. 

Jayson: There was one nice note, so I'm back.

Hill: Seth Jayson, in the house!

Jayson: I'm like a golden retriever, all I want is some adulation.

Hill: Well, I wanted you in here because your home state retailer --

Jayson: Target!

Hill: -- Target is crushing it. We're also going to talk about Lowe's. But let's start with Target because their second quarter report ...

Jayson: Pretty good.

Hill: If by "pretty good," you mean best same-store sales growth in over a decade, then yes, pretty good. 

Jayson: Pretty good, yeah. They talk about the comps, 6.3%, something like that. That includes online. Online sales growth was huge, 41%. The bricks and mortar comp was still pretty strong, 4.9%, I think I saw in the release. That's pretty good for them. You get more people in, you've already paid for the store, you're paying for it, you're paying the people to work there. So, obviously, this is a very important indicator for retailers. Not a lot of good reports from certain retailers on this number for months and months. Now Target has turned it around. The online thing is great. We saw something similar from Walmart. Turns out, you don't have to buy everything from Amazon, and people are figuring that out, as well.

Hill: Smart of Brian Cornell and his team at Target for executing. There have been struggles that Target has had. They've pretty much stuck to the plan that Cornell laid out a few years ago, particularly when you think about how they made pretty large strategic moves, some of which were geared toward building out the e-commerce. I'm thinking primarily about the decision to sell the pharmacies to CVS Health and just say, "We need to focus on other things."

Jayson: Yeah, that's a complex business that somebody else can do better, and just keep it in our store. The grocery thing is still an area where they probably don't have quite the level of service you could get from someone like a Walmart currently. I mean, I shop at Target pretty often, there's one near us. It doesn't occur to me that it's much of a grocery store, although there's a small store in there. But, if I go by a Super Walmart, to me, that's as good or better than most grocery stores. You're going to find great produce and everything else. 

But that's an opportunity for them. If they can just rise to the level of competence there, they're in good shape. Then, in more urban areas, I think they have some good advantages with their delivery. They really appeal to a more hip, younger customer in ways that Walmart never will. They seem to be taking good advantage of that, as well. 

Hill: I'm wondering if, what they've just done in the second quarter, if this puts them on a really great path for the next six months, or if it increases the pressure. If you just think about the quarter that they're in right now, it includes, obviously, the back to school event. Then, you have the holidays.

Jayson: And they had their own sale to try and compete with Amazon's made-up holiday where everybody buys stuff online. 

Hill: Wait, did Target do that?

Jayson: They did one, as well. Apparently, they said it worked out very well for them.

Hill: OK, I totally missed that they did that.

Jayson: If you run a large chain of stores out there, it turns out that if you get on that there Instagram and you make a fake holiday, you might sell a bunch more stuff. We should try that here!

Hill: [laughs] I'll see what we can do with our little

Jayson: Let's take some suggestions from listeners.

Hill: E-mail us,, or you can hit us up on Twitter. Absolutely!

We see the stock responding, with Target. When you look at the stock right now, do you think, "OK, this thing's still got room to run?" Or do you feel like, "Ooh, this is starting to get a little pricey."

Jayson: I think it's OK. It all depends a little bit on the execution. I think they'll probably continue to grow in this way. But the wildcard, of course, for any company out there right now, is the economy. Now, Target is so big that they'll remain established no matter what happens there. But I would say that probably the only thing that will throw a wrench in the works for Target is if we have a consumer spending pullback. But it doesn't look like we've got one of those on the way.

Hill: Lowe's second quarter, as expected, was pretty good, but not as good as Home Depot's second quarter. This is what we've seen for the last few years.

Jayson: The good news, the bad news, not quite as great as Home Depot. The market was, I guess, a little bit moody. Pre-market, the stock was down, and then it's up -- 

Hill: Now it's up 8%. I'm assuming at least some of that is because of Marvin Ellison, the CEO. And sort of his coming out and being very specific about... because the other news with Lowe's, beyond just the results, was the decision that Ellison talked about to shut down -- they have this other brand which is ...

Jayson: Smaller hardware stores. That lowered their guidance by shedding, I think there were about 100 of them, and they said, "We're getting rid of that." It makes some sense. I think they need to concentrate on those --

Hill: 99 Orchard Supply Hardware. By the end of the year, they're shutting all those down.

Jayson: I think that makes sense. They need to concentrate. They've got a very strong competitor in Home Depot. That's the extent of the bad news, and it's not such bad news. What's probably better news for them and worse news for others in the space, smaller competitors like Lumber Liquidators, Tile Shop, Floor & Decor, they're not doing very well. I mean, they're underperforming. Smaller companies that supposedly sell higher end product, at least in some of the categories like flooring, they are not seeing the same kind of sales growth at all. In some cases, they're seeing sales declines still. It's pretty interesting, because the housing market is not so great, but the big box home improvement outfits have really taken over this space. There aren't even enough crumbs left for the smaller players at this point. 

Hill: We've talked about a bunch of housing-related businesses over the last couple of weeks, including yesterday on the show, talking about Toll Brothers. Homebuilders, realtors, you and I talked about that last week, and, obviously, home improvement. For someone like me, who looks at their stock portfolio and sees really no exposure to the housing industry whatsoever, my assumption is that home improvement stocks are maybe the easiest way to get housing exposure in your portfolio. 

Jayson: I would say that's a fair assessment, also one of the safer. I saw a headline that some analysts said Home Depot is the better company, Lowe's is the better stock. I don't know if I agree with the second part of that. I think in the long run, the better company is always the better stock. Between the two of those, if you just look at the multiples, the pricing is not too different, so I would probably stick with the one that's doing better. Although there's maybe more room for improvement at Lowe's, I doubt it'll be such a dramatic improvement that they'll be able to eclipse Home Depot. 

Hill: Red Robin Gourmet Burgers also reported their second quarter report. Wasn't great. Their profits and revenue came in lower than expected. They had negative comps, which were expected, but they were even lower than expected.

Jayson: The bottomless fry pit isn't helping things out? It appeals to me, which confirms my belief, which is that if I'm shopping in your store, you're probably not doing very well.

Hill: [laughs] I don't really want to talk about Red Robin. I just want to use it as a pivot to talk about Culver's.

Jayson: Oh, delicious Culver's!

Hill: Culver's, a Midwestern chain, which I was surprised to learn -- looking at Red Robin, they've got about 530 locations. Culver's has over 650 locations, and somehow pretty much all of them are in the Midwest United States.

Jayson: There are a lot of people listening to the podcast who probably don't know what we're talking about. I can explain it quickly. Culver's is McDonald's; not McDonald's in the sense of what we're used to from McDonald's, when we think of things like a little bit seedy, ubiquitous, lower food quality, and not so clean. Culver's is what McDonald's was when it started, and when Ray Kroc was running around, and the McDonald's Brothers were holding the restaurants up to super high standards. Nice people working there, smiley, very clean, they actually bring the food out to your table for you, but it doesn't take long. The burgers are great. I think they're better than Five Guys, better than Shake Shack. They're not very expensive.

Hill: Oh, we're going to get emails. 

Jayson: Premium is not very high. The quality is super high. I even looked at franchising years ago, before they were quite this big. At the time, they gave you a protected turf, which was good. They've grown like crazy. When we are on a road trip, we will often eat at McDonald's, just because you get what you expect.

Hill: No surprises.

Jayson: Very few surprises, except for the people who buy salad. But, I mean, come on! Salad at McDonald's? What are you thinking? 

Hill: Come on, people!

Jayson: If there's a Culver's, we will cross our legs and hold it and do the peepee dance in the back. I'll hold it to get to that Culver's down the road, because the food quality is just that much better.

Hill: [laughs] I don't think Culver's advertising department is necessarily going to use that as a pull quote for a poster.

Jayson: Seth Jayson will hold his urine just to get to Culver's!

Hill: Why is the closest one to where you and I are sitting in Winston Salem, North Carolina? Come on, Culver's! Come to your nation's capital!

Jayson: They tend to be in a bit more of a rural-ish market. Tractor Supply and Culver's probably have quite a bit of overlap. Maybe we're not rural-ish enough. But, Culver's, come on to Front Royal! I would love to see one in Front Royal. Anybody on their way down to Roanoke, or heading out that way, Front Royal would be a great place for a Culver's. I'm going to go back to that franchising page. OK, everybody, you didn't hear that.

Hill: [laughs] Seth Jayson gets right of first refusal on the franchising rights to the Front Royal Culver's, coming in 2019.

Jayson: I think all they have there is a McDonald's.

Hill: No, Front Royal is getting a little built up.

Jayson: It's a little bigger. I forget the name, there's a deli, McAlister's Deli and some other stuff where we stop to eat when we're on our way out that way. But I don't think there's high-quality fast food like a Culver's. I don't think it exists there at this point.

Hill: Alright, get on that real quick, before we wrap up. 67 days until the Marin Corps Marathon, how are you feeling?

Jayson: Pretty good, as we discussed and looped Dan in the conversation. It's hot and humid here. Anybody else out there training for that fall marathon in this kind of weather, remember to wear the right clothes. We had some unfortunate chafing situations, only remedied by diaper cream, which I was lucky to find in the house. A seven-year-old tube from when my girl was little. Things are going OK. How about you?

Hill: They're going OK. Like you, dealing with the heat and humidity. I would pay hundreds of dollars for the people running the Marine Corps Marathon to activate a weather machine to make sure that it's not ungodly hot this year -- unseasonably hot, I should say, as it has been the last two times.

Jayson: I don't remember the warm Marine Corps. Maybe that's because I run in the afternoon. It always feels cool to me. I mean, it's 85 or 90 every day when I train for Marine Corps Marathon, because that's just when I run. But I do remember some that were freezing cold at the start. And I remember one where it was so freezing cold at the start, I wore tights, and four miles in I was boiling, and I was looking for somebody who maybe had scissors or something, because I just wanted to stop and cut the legs off them. I was dying.

Hill: I think maybe the reason the warm ones don't stick out in your mind is, you probably didn't end up in a medical tent when it was over. 

Jayson: Oh, that's right! You have your heat issues. I deal pretty well with the heat. A little bit of luck on the body shape, and then a lot of experience with it. I have a good indicator. If it feels like I have an inner tube of warm air around my neck, I know I have to stop and walk. Everyone remember that. Drinking more is not going to help you. If you're too hot, you need to walk, and you might need to stop drinking. You might have been drinking too much already. Drink when you're thirsty, but if you feel too hot, if you feel dizzy, walk, stop, get in the shade.

Hill: See, between that and the advice on alternative uses for diaper cream ... you're not getting that on Bloomberg radio. 

Jayson: Not at all. I think this is more just a primary use on diaper cream. I have to recommend the Desitin 40%, even though it smells like fish. For some reason, there's cod liver oil. Even though you are going to walk around smelling like fish, if you get in this situation, go for the Desitin. 

Hill: [laughs] Definitely not getting that on Bloomberg. Seth Jayson, thanks for being here!

Jayson: You're welcome!

Hill: As always, people on the program may have interests in stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. That's going to do it for this edition of Market Foolery. The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening! We will see you tomorrow