We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Retail Stocks Likely to Stand Out This Earnings Season
Read MoreHide Full Article
The earnings season is underway and most companies in the Retail-Wholesale sector are yet to show their cards. Per the latest Zacks Earnings Outlook, the Retail-Wholesale sector is anticipated to witness top-line growth of 8.4% this reporting cycle, whereas the bottom line is expected to drop 0.5%. The earnings season has witnessed releases from 18.4% of the retail companies in the S&P 500 cohort.
The sector displays strength this reporting period, thanks to impressive growth strategies undertaken by the companies constituting the sector. Also, a strong jobs market (highlighted by the 50-year low unemployment rate of 3.5% in September) is likely to have aided consumers’ buying capacity, which is a key driver for the consumer-driven retail space.
Well, companies in the retail sector are likely to have gained from their constant omnichannel initiatives, brand introduction, store expansion and remodeling, and efforts to enhance delivery services in the quarter. Additionally, companies’ efficient pricing actions along with marketing and loyalty programs are likely to have worked in favor. These endeavors have helped retailers keep pace with the evolving consumer environment and counter hurdles related to sluggish brick-and-mortar traffic.
However, costs associated with such efforts, combined with any SG&A deleverage, rising operating expenses and escalated labor costs might have weighed on the bottom line.
All said, let’s check out four retailers, which are likely to beat estimates this earnings season.
Our research shows that for stocks with the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP, the chance of a positive earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
4 Prominent Picks
RH (RH - Free Report) is worth a bet with a Zacks Rank #1 and an Earnings ESP of +2.00%. The Zacks Consensus Estimate for third-quarter fiscal 2019 earnings is pegged at $2.21, suggesting growth of 27.7% from the prior-year quarter. This home furnishings retailer has outperformed the Zacks Consensus Estimate by an average of 20.2% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Restoration Hardware Holdings Inc. Price and EPS Surprise
You may also consider The Home Depot, Inc. (HD - Free Report) , which has a Zacks Rank #2 and an Earnings ESP of +0.23%. The Zacks Consensus Estimate for third-quarter fiscal 2019 earnings is pegged at $2.52, suggesting growth of 0.4% from the year-ago figure. This home improvement retailer has an average positive earnings surprise of 5.8% for the trailing four quarters.
The Children's Place, Inc. (PLCE - Free Report) also deserves a mention. The stock has a Zacks Rank #2 and an Earnings ESP of +17.24%. The Zacks Consensus Estimate for third-quarter fiscal 2019 earnings is pegged at $3.16, indicating a year-over-year improvement of 2.9%. This children's specialty apparel retailer has outpaced the Zacks Consensus Estimate by a decent margin in the preceding two quarters.
Another worthwhile option is Dollar General Corporation (DG - Free Report) , with a Zacks Rank #2 and an Earnings ESP of +1.69%. The Zacks Consensus Estimate for third-quarter fiscal 2019 earnings is pegged at $1.38, indicating an improvement of 9.5% from the year-ago period. This discount retailer has outperformed the Zacks Consensus Estimate by an average of 3.6% in the trailing four quarters.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
4 Retail Stocks Likely to Stand Out This Earnings Season
The earnings season is underway and most companies in the Retail-Wholesale sector are yet to show their cards. Per the latest Zacks Earnings Outlook, the Retail-Wholesale sector is anticipated to witness top-line growth of 8.4% this reporting cycle, whereas the bottom line is expected to drop 0.5%. The earnings season has witnessed releases from 18.4% of the retail companies in the S&P 500 cohort.
The sector displays strength this reporting period, thanks to impressive growth strategies undertaken by the companies constituting the sector. Also, a strong jobs market (highlighted by the 50-year low unemployment rate of 3.5% in September) is likely to have aided consumers’ buying capacity, which is a key driver for the consumer-driven retail space.
Well, companies in the retail sector are likely to have gained from their constant omnichannel initiatives, brand introduction, store expansion and remodeling, and efforts to enhance delivery services in the quarter. Additionally, companies’ efficient pricing actions along with marketing and loyalty programs are likely to have worked in favor. These endeavors have helped retailers keep pace with the evolving consumer environment and counter hurdles related to sluggish brick-and-mortar traffic.
However, costs associated with such efforts, combined with any SG&A deleverage, rising operating expenses and escalated labor costs might have weighed on the bottom line.
All said, let’s check out four retailers, which are likely to beat estimates this earnings season.
Our research shows that for stocks with the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP, the chance of a positive earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
4 Prominent Picks
RH (RH - Free Report) is worth a bet with a Zacks Rank #1 and an Earnings ESP of +2.00%. The Zacks Consensus Estimate for third-quarter fiscal 2019 earnings is pegged at $2.21, suggesting growth of 27.7% from the prior-year quarter. This home furnishings retailer has outperformed the Zacks Consensus Estimate by an average of 20.2% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Restoration Hardware Holdings Inc. Price and EPS Surprise
Restoration Hardware Holdings Inc. price-eps-surprise | Restoration Hardware Holdings Inc. Quote
You may also consider The Home Depot, Inc. (HD - Free Report) , which has a Zacks Rank #2 and an Earnings ESP of +0.23%. The Zacks Consensus Estimate for third-quarter fiscal 2019 earnings is pegged at $2.52, suggesting growth of 0.4% from the year-ago figure. This home improvement retailer has an average positive earnings surprise of 5.8% for the trailing four quarters.
The Home Depot, Inc. Price and EPS Surprise
The Home Depot, Inc. price-eps-surprise | The Home Depot, Inc. Quote
The Children's Place, Inc. (PLCE - Free Report) also deserves a mention. The stock has a Zacks Rank #2 and an Earnings ESP of +17.24%. The Zacks Consensus Estimate for third-quarter fiscal 2019 earnings is pegged at $3.16, indicating a year-over-year improvement of 2.9%. This children's specialty apparel retailer has outpaced the Zacks Consensus Estimate by a decent margin in the preceding two quarters.
The Children's Place, Inc. Price and EPS Surprise
The Children's Place, Inc. price-eps-surprise | The Children's Place, Inc. Quote
Another worthwhile option is Dollar General Corporation (DG - Free Report) , with a Zacks Rank #2 and an Earnings ESP of +1.69%. The Zacks Consensus Estimate for third-quarter fiscal 2019 earnings is pegged at $1.38, indicating an improvement of 9.5% from the year-ago period. This discount retailer has outperformed the Zacks Consensus Estimate by an average of 3.6% in the trailing four quarters.
Dollar General Corporation Price and EPS Surprise
Dollar General Corporation price-eps-surprise | Dollar General Corporation Quote
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>