Market Overview

Looking Ahead: Earnings from Apparel Companies, US Durable Goods

The last week of November is short on earning reports. Economic data for the U.S. will be light, but there will be a few key releases, and a fair amount of international data out on Thursday.

Several of the major apparel retailers will release earnings during the week, including PVH (NYSE: PVH), American Eagle Outfitters (NYSE: AEO), Guess? (NYSE: GES) and Pacific Sunwear (NASDAQ: PSUN).

These earnings reports will not include sales from Black Friday, but investors might look to the reports for guidance on the crucial fourth quarter.

Analysts at Wedbush like American Eagle Outfitters heading into earnings. They expect a strong third quarter report and guidance that will come in line with expectations. Wedbush has a $26 price target on the company, shares are currently trading around $19.60.

On the other hand, Piper Jaffray is cautious on Guess. In October, Guess' CEO and CFO tendered their resignations. While the management change may have been necessary for longer-term success, Piper Jaffray believes it brings short-term uncertainty. In the face of this uncertainty, investors should remain cautious.

Also of note, two companies that have both been targeted by short sellers in recent months will release earnings. Both Green Mountain Coffee (NASDAQ: GMCR) and Focus Media (NASDAQ: FMCN) will report on Tuesday.

Last October, hedge fund manager and short seller David Einhorn targeted Green Mountain in a presentation. Einhorn raised questions with the company's accounting and argued that the expiration of Green Mountain's patents would put tremendous pressure on the company's earnings.

Thus far, Einhorn's Green Mountain call has been a great one, with shares down almost 40 percent so far this year.

Green Mountain's upcoming earnings might be expected to be light, given that this quarter is the first time the company saw competition from Starbucks (NASDAQ: SBUX). Although Starbucks has fiercely denied that it is attempting to compete with Green Mountain directly, Starbucks released its single-serve Verismo in October, a device largely similar to Green Mountain's Keurig brewer.

Yet, analysts at Canaccord Genuity remain bullish Green Mountain. The Keurig-maker announced that it had hired a new CEO last week, a Coca-Cola (NYSE: KO) executive named Brian Kelly.

Canaccord thinks Kelly's hiring is a reason to buy the stock. Analysts there currently have a $39 price target, much higher than the current price near $28.

Focus Media was targeted by Muddy Waters earlier in 2012. Muddy Waters, headed by Carson Block, has successfully targeted companies like Sino Forest and RINO International. Most recently, Block set his sights on Singapore-based Olam International.

Despite Block's allegations, Focus Media has been a winner so far this year, and shares are up more than 25 percent. The company is reportedly set to be acquired by a group of private equity firms, led by the Carlyle Group (NASDAQ: CG). Traders might look to Tuesday's report for info on the progress of the deal.

On the economics front, Tuesday will bring information on U.S. durable goods orders and German CPI. Expectations for durable goods orders are for a decline of 0.3 percent, while the consensus estimate for German CPI is an increase of 1.9 percent, year-over-year.

Thursday is a full calendar of international economic reports. Japan will release its unemployment rate and industrial production. Recent Japanese data has been poor, but Japan's stock market has rallied as its yen has shown weakness. Likewise, Germany will release its unemployment rate on Thursday, with expectations for 6.9 percent.

U.S. markets have been strong the week of Thanksgiving, but stocks could rapidly correct when market participants return to their offices in full force.

Monday

  • Earnings from: SeaDrill (NYSE: SDRL), Bazaarvoice (NASDAQ: BV), Hillenbrand (NYSE: HI).
  • Swiss Employment Level (Expected 4.09 million), German Consumer Climate (Expected 6.2), New Zealand Trade Balance (Expected -536 million).

Tuesday

  • Earnings from: DHT (NYSE: DHT), Ralcorp Holdings (NYSE: RAH), Focus Media (NASDAQ: FMCN), Green Mountain Coffee (NASDAQ: GMCR), PVH (NYSE: PVH).
  • South African GDP (Expected 1.50 percent), British GDP (Expected 1.0 percent, month-over-month), U.S. Durable Goods Orders (Expected -0.5 percent, month-over-month), German CPI (Expected -0.1 percent, month-over-month).

Wednesday

  • Earnings from: American Eagle Outfitters (NYSE: AEO), The Fresh Market (NASDAQ: TFM), Aeropostale (NYSE: ARO), Guess' (NYSE: GES), TiVo (NASDAQ: TIVO).
  • U.S. New Home Sales (Expected 390,000), Aussie Capital Expenditure (Expected 2.0 percent), Japanese Retail Sales (Expected -0.7 percent, year-over-year).

Thursday

  • Earnings from: Barnes & Noble (NYSE: BKS), Kroger (NYSE: KR), Tiffany (NYSE: TIF), Pacific Sunwear (NASDAQ: PSUN).
  • Swiss GDP (Expected 0.2 percent, quarter-over-quarter), German Unemployment Rate (Expected 6.9 percent), Japanese Unemployment Rate (Expected 4.2 percent), Japanese Industrial Production (Expected -2.2 percent, month-over-month).

Friday

  • Earnings from: Big Lots (NYSE: BIG), Genesco (NYSE: GCO).

Posted-In: Analyst Color Earnings News Previews Management Econ #s Economics Markets Best of Benzinga

 

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