While the second quarter earnings season is almost over for all the other sectors, there are still a few companies in the retail sector that are yet to report. As a result, investors are on the lookout for companies in the retail sector that can beat their respective earnings estimates.
If we summarize the performance of the almost 91.0% S&P 500 companies that have reported financial results so far, we will see that 71.1% of the companies beat on earnings and 52.9% surpassed revenue estimates, as per our Earnings Preview report. However, total earnings for these companies were down 3.7% year over year while revenues declined 0.7%.
Though the rate of decline is seen to be moderating from the previous quarter, investors remain concerned as there is still no sign of growth. In fact, the quarter is on track to be the fifth in a row to record an earnings decline for the S&P 500 index.
In this scenario, the retail sector appears to be quite reliable. Overall, the sector has reported modest results so far. Out of the 50.0% companies that have reported Q2 earnings as of Aug 10, 45.5% have posted an earnings beat, while 18.2% have surpassed revenue estimates. Total earnings of these companies were up 8.1% year over year while revenues grew 8.7%. Total earnings for the sector are expected to increase 2.3% driven by revenue growth of 4.8%, offset by a 0.1% decline in margins.
Leading firms from the industry like Amazon.com, Inc. (AMZN - Free Report) , Ebay, Inc. (EBAY - Free Report) , Macy’s Inc. (M - Free Report) , Kohl’s Corp. (KSS - Free Report) , The Walt Disney Company (DIS - Free Report) , Michael Kors Holdings Limited , Sprouts Farmers Market, Inc. (SFM), Ralph Lauren Corporation (RL - Free Report) , and Coach, Inc. have delivered better-than-expected results in their recently reported quarter despite tough retail sales environment. On the other hand, Whole Foods Market, Inc. and Starbucks Corp. (SBUX - Free Report) posted in-line earnings in their recently reported quarterly results.
However, international turmoil, a yet-to-recover Chinese economy, fluctuating commodity prices and sluggish traffic, and colder-than-normal weather in the spring-selling season largely impacted second-quarter comparable store sales through May. Nevertheless, we believe that the sector is positioned to gain from an improving U.S. economy.
Here we have four retail stocks, which are scheduled to release their second-quarter numbers next week.Let's see how things are shaping up for their respective announcements.
Wal-Mart Stores, Inc. (WMT - Free Report) is scheduled to report on Aug 18 before the opening bell. The retail giant has an Earnings ESP of +0.98% and a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for the second quarter earnings is pegged at $1.02 per share. The company has posted positive earnings surprises in three of the last four quarters and a negative surprise in the remaining quarter, translating to an average positive surprise of 4.01%.
Wal-Mart is making efforts to understand the evolving needs of its customers to regain their confidence, and thus boost sales. It has delivered positive comps in the U.S. in the last seven quarters. Lower fuel prices aided sales as it eased consumers’ spending power. The company expects the trend of positive comps at Wal-Mart U.S. to continue in the soon-to-be reported quarter.
Wal-Mart is also making huge investments in e-commerce initiatives to compete in the online industry. It is also paying higher wages to its workers and training them to improve its store performance. However, these initiatives have increased expenses for the company. This along with unfavorable currency will take a toll on earnings. (Read: Will Wal-Mart's Earnings Surpass Estimates in Q2?).
Performance Food Group Company (PFGC) is slated to release its results on Aug 17 before the opening bell. The company, which markets and distributes food and food-related product, has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for fourth quarter fiscal 2016 (ending June) earnings is pegged at 40 cents. The company delivered an average positive surprise of 3.51% over the past four quarters.
Popeyes Louisiana Kitchen, Inc. (PLKI), the owner and operator of a chain of quick-service restaurants, is slated to release its results on Aug 16 after the market closes. The company has an Earnings ESP of -2.13% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for second quarter earnings is pegged at 47 cents. The company has delivered an average negative surprise of 0.33% in the past four quarters.
SpartanNash Company (SPTN - Free Report) is scheduled to release its second-quarter results on Aug 17 after the market closes. The food distributor has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate for second quarter earnings is pegged at 57 cents. The company has posted positive earnings surprises in three of the last four quarters and in-line earnings in the remaining quarter, translating to an average positive surprise of 8.08%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
While the second quarter earnings season is almost over for all the other sectors, there are still a few companies in the retail sector that are yet to report. As a result, investors are on the lookout for companies in the retail sector that can beat their respective earnings estimates.
If we summarize the performance of the almost 91.0% S&P 500 companies that have reported financial results so far, we will see that 71.1% of the companies beat on earnings and 52.9% surpassed revenue estimates, as per our Earnings Preview report. However, total earnings for these companies were down 3.7% year over year while revenues declined 0.7%.
Though the rate of decline is seen to be moderating from the previous quarter, investors remain concerned as there is still no sign of growth. In fact, the quarter is on track to be the fifth in a row to record an earnings decline for the S&P 500 index.
In this scenario, the retail sector appears to be quite reliable. Overall, the sector has reported modest results so far. Out of the 50.0% companies that have reported Q2 earnings as of Aug 10, 45.5% have posted an earnings beat, while 18.2% have surpassed revenue estimates. Total earnings of these companies were up 8.1% year over year while revenues grew 8.7%. Total earnings for the sector are expected to increase 2.3% driven by revenue growth of 4.8%, offset by a 0.1% decline in margins.
Leading firms from the industry like Amazon.com, Inc. (AMZN - Free Report) , Ebay, Inc. (EBAY - Free Report) , Macy’s Inc. (M - Free Report) , Kohl’s Corp. (KSS - Free Report) , The Walt Disney Company (DIS - Free Report) , Michael Kors Holdings Limited , Sprouts Farmers Market, Inc. (SFM), Ralph Lauren Corporation (RL - Free Report) , and Coach, Inc. have delivered better-than-expected results in their recently reported quarter despite tough retail sales environment. On the other hand, Whole Foods Market, Inc. and Starbucks Corp. (SBUX - Free Report) posted in-line earnings in their recently reported quarterly results.
However, international turmoil, a yet-to-recover Chinese economy, fluctuating commodity prices and sluggish traffic, and colder-than-normal weather in the spring-selling season largely impacted second-quarter comparable store sales through May. Nevertheless, we believe that the sector is positioned to gain from an improving U.S. economy.
Here we have four retail stocks, which are scheduled to release their second-quarter numbers next week.Let's see how things are shaping up for their respective announcements.
Wal-Mart Stores, Inc. (WMT - Free Report) is scheduled to report on Aug 18 before the opening bell. The retail giant has an Earnings ESP of +0.98% and a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for the second quarter earnings is pegged at $1.02 per share. The company has posted positive earnings surprises in three of the last four quarters and a negative surprise in the remaining quarter, translating to an average positive surprise of 4.01%.
Wal-Mart is making efforts to understand the evolving needs of its customers to regain their confidence, and thus boost sales. It has delivered positive comps in the U.S. in the last seven quarters. Lower fuel prices aided sales as it eased consumers’ spending power. The company expects the trend of positive comps at Wal-Mart U.S. to continue in the soon-to-be reported quarter.
Wal-Mart is also making huge investments in e-commerce initiatives to compete in the online industry. It is also paying higher wages to its workers and training them to improve its store performance. However, these initiatives have increased expenses for the company. This along with unfavorable currency will take a toll on earnings. (Read: Will Wal-Mart's Earnings Surpass Estimates in Q2?).
Performance Food Group Company (PFGC) is slated to release its results on Aug 17 before the opening bell. The company, which markets and distributes food and food-related product, has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for fourth quarter fiscal 2016 (ending June) earnings is pegged at 40 cents. The company delivered an average positive surprise of 3.51% over the past four quarters.
Popeyes Louisiana Kitchen, Inc. (PLKI), the owner and operator of a chain of quick-service restaurants, is slated to release its results on Aug 16 after the market closes. The company has an Earnings ESP of -2.13% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for second quarter earnings is pegged at 47 cents. The company has delivered an average negative surprise of 0.33% in the past four quarters.
SpartanNash Company (SPTN - Free Report) is scheduled to release its second-quarter results on Aug 17 after the market closes. The food distributor has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate for second quarter earnings is pegged at 57 cents. The company has posted positive earnings surprises in three of the last four quarters and in-line earnings in the remaining quarter, translating to an average positive surprise of 8.08%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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