Will Alibaba And Home Depot Bring Good News To Retail Earnings Season?

• More of the big retailers are on deck to report their most recent quarterly results this week.
• Wall Street is braced for mixed results from the troubled sector again this week.
• Yet two leading specialty retailers could buck the trend of low expectations.

The big-box stores and the major department stores began sharing their latest quarterly results this past week. So far, the results have been something of a mixed bag, with even those companies that top analysts' expectations still raising concerns for investors about the industry and its big players. The parade of retailer earnings continues this week, and perhaps the highest hopes for good news lie with the leading home improvement superstore operator and also with what many have called the Chinese version of Amazon.

For the period when Alibaba Group Holding Ltd (NYSE:BABA) wowed investors with its strong revenue forecast included in its analysts day presentation, Wall Street analysts are on the lookout for strong year-over-year growth on both the top and bottom lines for the three months that ended in June.

In addition, the consensus forecast for Home Depot Inc (NYSE:HD) calls for solid growth in both earnings and revenue when compared to the same period of last year. Barron's liked the company's chances of surviving the onslaught from e-commerce rivals during the period. Yet the short sellers were oddly interested in it too despite the apparent tailwinds.

Alibaba

When this Hangzhou-based online and mobile commerce company shares its fiscal first-quarter results before the opening bell on Thursday, the analysts on average predict that it will post 91 cents per share in earnings. That would compare to the 73 cents a share reported a year ago. And the $7.06 billion in expected revenue would be the second highest seen in the past eight quarters, after the most recent Christmas season period. It would also be up more than 47 percent year over year.

The forecast from 244 Estimize respondents is even more hopeful. It sees Alibaba's earnings per share coming in at 96 cents, and their consensus revenue estimate for the most recent period is pegged at $7.09 billion. Like the Wall Street analysts, Estimize overestimated the bottom line results but underestimated revenue in the previous quarter.

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Home Depot

Wall Street's consensus forecast calls for EPS at this big-box home improvement store operator to have risen by 24 cents from in the same period of last year to $2.21, the highest figure in two years. But note that the 107 Estimize respondents have a consensus estimate up at $2.24 a share for the three months that ended in July. Also, the EPS results topped both Estimize and Wall Street expectations in the two previous reporting periods.

Estimize underestimated revenue in the prior three quarters, and this time the respondents are looking for $27.82 billion. That would be around 5 percent higher than the figure posted in the year-ago quarter, as well as the greatest level in the past two years. It also is about the same as the Wall Street revenue forecast. Look for Home Depot to share its fiscal second-quarter results first thing Tuesday morning.

And Others

Other retailers predicted to show at least some year-over-year earnings growth when they reveal their results this week include Dicks Sporting Goods, JD.com and Ross Stores. But consensus forecasts call for shrinking profits from Advance Auto Parts, Foot Locker, Gap, L Brands, Target and Urban Outfitters. The per-share earnings at TJX and Walmart will be the same as a year ago, if the analysts are correct.

The following week, the retail earnings parade winds down, but look for results from the likes of Burlington Stores, GameStop, Lowe's and Tiffany. Then at the end of the month, Best Buy and Dollar General are expected to share their latest results.