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Department Store Stocks' Q2 Earnings on Aug 11: M, KSS, DDS
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The Q2 earnings season is gradually nearing its end, with more than 87% of the S&P 500 companies having already announced their results. Per the latest Zacks Earnings Trends report as of Aug 5, out of the 433 S&P 500 members that have come up with their quarterly numbers, approximately 70.7% have posted positive earnings surprises, while 52.7% beat top-line expectations.
According to the report, earnings for the 433 S&P 500 companies that have reported so far are down 4.1% from the same period last year, while revenues have dropped 0.9%. Although the bulk of earnings releases have already come from different sectors, most retailers are yet to post their financial results. Hence, investors are keeping their fingers crossed over the outcome.
The report further highlights that total earnings for the Retail/Wholesale sector are expected to increase 2.1%, while revenues are anticipated to jump 4.8%. As of Aug 5, 50% of the total number of S&P 500 companies in this sector had reported their results, wherein 45.5% delivered an earnings beat and about 18.2% cruised ahead of revenue estimates. While earnings grew 8.1% year over year, revenues improved 8.7%.
Let us focus on Department Store stocks, which form part of the Retail/Wholesale sector. Among Department Store stocks lined up to report, here’s a sneak peek at three companies.
Macy's, Inc. (M - Free Report) , one of the leading department store retailers, is slated to report second-quarter fiscal 2016 results on Aug 11. We believe Macy’s sustained focus on price optimization, inventory management, merchandise planning and private label offering acts as the primary catalyst. In an attempt to augment sales, profitability and cash flows, the company has been taking steps such as integration of operations as well as developing its eCommerce business and Macy’s Backstage off-price business, along with the expansion of Bluemercury and online order fulfillment centers. However, Macy’s operates in the highly competitive retail merchandise sector. A mature domestic market, lower tourist spending and cautious consumer spending continue to pose concerns.
Our proven model shows that Macy's is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. The Most Accurate estimate stands at 50 cents and the Zacks Consensus Estimate is pegged at 40 cents. So the ensuing +25.00% ESP and the company’s Zacks Rank #3 make us reasonably confident of an earnings beat. The company’s past performance reveals that it surpassed the Zacks Consensus Estimate in the trailing four quarters by an average of 3.9%. (Read: Macy's Likely to Beat on Q2 Earnings: Stock to Gain?)
Kohl’s Corporation (KSS - Free Report) is set to report second-quarter fiscal 2016 results before the opening bell on Aug 11. The company has been struggling to boost its sluggish top line since the past several quarters. Lower spending on apparel and accessories, and a general slowdown in consumer spending are hurting sales at department stores. Also, the company’s turnaround initiative named “Greatness Agenda” has been depicting weakness of late. (Read: Will Lower Spending Dampen Kohl's Earnings in Q2?)
Kohl’s has an Earnings ESP of -1.92% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for the quarter currently stands at $1.04. In the trailing four quarters, the company underperformed the Zacks Consensus Estimate by an average of 2.4%.
Dillard's Inc. (DDS - Free Report) , a department store chain featuring fashion apparel and home furnishings, is expected to report second-quarter fiscal 2016 results on Aug 11. Dillard’s focus on increasing productivity, developing a leading omni-channel platform and enhancing its domestic operations is expected to support future results. However, lower-than-expected bottom-line results for the past three straight quarters raise concerns. Moreover, stiff competition in the retail merchandise space may prove to be a hurdle. (Read: Dillard's to Report Q2 Earnings: What to Expect?)
The company has an Earnings ESP of 0.00% and a Zacks Rank #2. The Zacks Consensus Estimate for the quarter is currently pegged at 34 cents. In the trailing four quarters, the company underperformed the Zacks Consensus Estimate by an average of 8.8%.
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Department Store Stocks' Q2 Earnings on Aug 11: M, KSS, DDS
The Q2 earnings season is gradually nearing its end, with more than 87% of the S&P 500 companies having already announced their results. Per the latest Zacks Earnings Trends report as of Aug 5, out of the 433 S&P 500 members that have come up with their quarterly numbers, approximately 70.7% have posted positive earnings surprises, while 52.7% beat top-line expectations.
According to the report, earnings for the 433 S&P 500 companies that have reported so far are down 4.1% from the same period last year, while revenues have dropped 0.9%. Although the bulk of earnings releases have already come from different sectors, most retailers are yet to post their financial results. Hence, investors are keeping their fingers crossed over the outcome.
The report further highlights that total earnings for the Retail/Wholesale sector are expected to increase 2.1%, while revenues are anticipated to jump 4.8%. As of Aug 5, 50% of the total number of S&P 500 companies in this sector had reported their results, wherein 45.5% delivered an earnings beat and about 18.2% cruised ahead of revenue estimates. While earnings grew 8.1% year over year, revenues improved 8.7%.
Let us focus on Department Store stocks, which form part of the Retail/Wholesale sector. Among Department Store stocks lined up to report, here’s a sneak peek at three companies.
Macy's, Inc. (M - Free Report) , one of the leading department store retailers, is slated to report second-quarter fiscal 2016 results on Aug 11. We believe Macy’s sustained focus on price optimization, inventory management, merchandise planning and private label offering acts as the primary catalyst. In an attempt to augment sales, profitability and cash flows, the company has been taking steps such as integration of operations as well as developing its eCommerce business and Macy’s Backstage off-price business, along with the expansion of Bluemercury and online order fulfillment centers. However, Macy’s operates in the highly competitive retail merchandise sector. A mature domestic market, lower tourist spending and cautious consumer spending continue to pose concerns.
MACYS INC Price, Consensus and EPS Surprise
MACYS INC Price, Consensus and EPS Surprise | MACYS INC Quote
Our proven model shows that Macy's is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. The Most Accurate estimate stands at 50 cents and the Zacks Consensus Estimate is pegged at 40 cents. So the ensuing +25.00% ESP and the company’s Zacks Rank #3 make us reasonably confident of an earnings beat. The company’s past performance reveals that it surpassed the Zacks Consensus Estimate in the trailing four quarters by an average of 3.9%. (Read: Macy's Likely to Beat on Q2 Earnings: Stock to Gain?)
Kohl’s Corporation (KSS - Free Report) is set to report second-quarter fiscal 2016 results before the opening bell on Aug 11. The company has been struggling to boost its sluggish top line since the past several quarters. Lower spending on apparel and accessories, and a general slowdown in consumer spending are hurting sales at department stores. Also, the company’s turnaround initiative named “Greatness Agenda” has been depicting weakness of late. (Read: Will Lower Spending Dampen Kohl's Earnings in Q2?)
KOHLS CORP Price, Consensus and EPS Surprise
KOHLS CORP Price, Consensus and EPS Surprise | KOHLS CORP Quote
Kohl’s has an Earnings ESP of -1.92% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for the quarter currently stands at $1.04. In the trailing four quarters, the company underperformed the Zacks Consensus Estimate by an average of 2.4%.
Dillard's Inc. (DDS - Free Report) , a department store chain featuring fashion apparel and home furnishings, is expected to report second-quarter fiscal 2016 results on Aug 11. Dillard’s focus on increasing productivity, developing a leading omni-channel platform and enhancing its domestic operations is expected to support future results. However, lower-than-expected bottom-line results for the past three straight quarters raise concerns. Moreover, stiff competition in the retail merchandise space may prove to be a hurdle. (Read: Dillard's to Report Q2 Earnings: What to Expect?)
DILLARDS INC-A Price, Consensus and EPS Surprise
DILLARDS INC-A Price, Consensus and EPS Surprise | DILLARDS INC-A Quote
The company has an Earnings ESP of 0.00% and a Zacks Rank #2. The Zacks Consensus Estimate for the quarter is currently pegged at 34 cents. In the trailing four quarters, the company underperformed the Zacks Consensus Estimate by an average of 8.8%.
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 >>