URBN - Thanksgiving Week
As the stock market will be closed for Thanksgiving on Thursday and open only for a half-day of trading Friday, Wall Street is getting ready for a shorter week. There are no new IPOs scheduled for this week either. The past week brought a waterfall of retail earnings, but a river of reports is due this week as well that could show how specialty stores are managing as essential stores continue to gobble up market share.
Monday
After market close, Urban Outfitters (NYSE: URBN) will open the week. Urban’s stock soared after reporting a surprise profit in August but as for all retailers these days, e-commerce will be the highlight of report. Investors will also look at its Anthropologie brand that has suffered due to a hefty price tag. Analysts are expecting earnings per share to come at 44 cents.
Tuesday
Autodesk Inc. (NASDAQ: ADSK) results for the fiscal third quarter are coming out after the close. Zack’s consensus estimates call for $0.96 in EPS and $942.24 million in revenue.
Dollar Tree (NASDAQ: DLTR) comes with strong revenue and earnings expectations for Q3 as in the last reported quarter, the company delivered an earnings surprise of 23.6%. Although it managed to be classified as an essential as opposed to a specialty retailer, its stock has lagged behind its peers, event after reporting better-than-expected results in August. Its downsides are in greater exposure to discretionary and seasonal items as well as operational issues, which is why it stock is up just 2% this year, compared with Dollar General’s (NYSE: DG) 36% gain. This report is another chance to prove it can keep up with its discount rivals with consensus forecast being $1.15 in EPS on a revenue of $6.12 billion.
As for Medtronic (NYSE: MDT), the consensus forecast calls for $0.80 in EPS and $7.08 billion in revenue for the fiscal second quarter.
The retail front
Expectations have also likely been raised for Burlington Stores (NYSE: BURL) as loyal shoppers have been quick to return to stores. Recent reports from larger peers such as TJX Cos. (NYSE: TJX) have been encouraging with analysts predicting EPS to swing from a 56-cent loss in the prior quarter to a 16 cents gain. But, this is still far below earnings of $1.55 a share in the same period last year.
As for Dick’s Sporting Goods (NYSE: DKS) analysts anticipate $0.98 in EPS and $2.22 billion in revenue. With shares down more than 48% year to date, Nordstrom (NYSE: JWN) has been the worst performer of the group, although it has traded roughly in-line with its department store peers. A multi-brand specialty retailer, American Eagle Outfitters (NYSE: AEO) might not be the most widely known stock at the moment, but it received a lot of attention from a substantial price increase on the stock exchange over the last few months. The Gap Inc (NYSE: GPS) has seen a major reversal of fortune in 2020. During the first half of the year, it was out luck with closures and its rent dispute. But, then it got upgraded by analysts, it sealed a 10-year deal with Kanye West, and enjoyed a rebound in the second quarter due to strong e-commerce growth. Now the question is if Gap can keep up its online momentum as well as the general one. Analysts are expecting EPS of 31 cents for the third quarter, an improvement from prior quarter’s 17 cents but still significantly below last year quarter’s 53 cents.
Tech
After the closing bell, HP Inc. (NYSE: HPQ) will report its fiscal fourth-quarter results with analysts forecastingEPS of $0.52 on a revenue of $14.65 billion. As for Dell Technologies (NYSE : DELL), the consensus forecast is at $1.39 in EPS on a revenue of $21.85 billion for the fiscal third quarter.
Moving on to software and cloud computing, VMware’s (NYSE: VMW) is expected to generate total revenues of $2.80 billion, implying 5.4% year-over-year growth for its third-quarter with non-GAAP earnings of $1.42 per share. While microprocessor and memory market ‘servers’ remained largely undisrupted by the pandemic, Analog Devices (NASDAQ: ADI) still faced challenges due to an unstable demand as well as seasonal factors. However, the situation is improving and the management is confident of ending the fiscal 2020 on a positive note and getting back on track next year.
Consumer electronics retail
Best Buy’s (NYSE: BBY) third-quarter earnings are expected to be strong as it benefits from pandemic-related trends. The consensus forecast is for EPS of $1.69 on a revenue of $10.97 billion.Stock has already added about 36% year to date, leaving other big-box retailers behind. Paradoxically, much of that strength came from COVID-19 that boosted online sales as people needed electronics to facilitate their home stays. Moreover, the digital business continued booming even after most of its stores were allowed to reopen. As the virus looks poised to wreak more havoc over the winter, Best Buy seems to be poised to benefit. But, if it can convince investors that its post-vaccine outlook is just as bright, it could easily be on a path to even more gains.
Foods
Moving on to jams, peanut butter and other toppings, J.M. Smucker (NYSE: SJM) is likely to register a decline in its bottom line when it releases second-quarter fiscal 2021 numbers although it delivered positive earnings surprise of 41.1% in the last reported quarter. Meanwhile, Hormel Foods (NYSE: HRL) is likely to register an improvement in its top line along with a YoY decline in its bottom line. The Zacks Estimate for revenue stands at $2.60 billion, which would be 3.8% from the previous year’s comparable quarter.
Wednesday
Deere & Company (NYSE: DE), the world’s largest makers of farm equipment, is performing excellently so far this year. Shares of the agricultural, construction and forestry equipment manufacturer are up about 50% for the year to date. As for the fiscal fourth quarter, the consensus forecast stands at $1.38 in EPS on a revenue of $7.68 billion.
Outlook
Although Thanksgiving is an optimistic holiday that is all about gratitude, the gloomy news of rising daily coronavirus cases and worries of the U.S. economic recovery will still be in the air during the last week of November. The third-quarter earnings reporting season is slowly winding down but as for the IPO front, at least December is shaping up to be a very busy month. With the e-commerce retailer Wish, the payments company Affirm, along with the eagerly awaited Airbnb all filing to go public, at least we’re in for a grand finale of this unprecedented year.
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