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Can JD.Com And Staples Overcome Low Earnings Expectations?

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Can JD.Com And Staples Overcome Low Earnings Expectations?
  • Two very different specialty retailers are expected to report their fourth-quarter results this week.
  • Wall Street analysts are looking for declining earnings for each of them.
  • Several other retailers are expected to report earnings growth this week.

The parade of quarterly results from the big retailers begins to wind down this week. Among those taking their turns in the earnings spotlight in the first week in March are JD.Com Inc(ADR) (NASDAQ: JD) and Staples, Inc. (NASDAQ: SPLS).

What these two very different specialty retailers have in common is that the consensus forecasts of Wall Street analysts indicate declining earnings. In fact, one of them is expected to have swung to a net loss for its most recent quarter. Revenue numbers will tell a different story though, of the analysts are correct.

Below is a quick look at what is expected from the reports of JD.Com and Staples. That is followed by a quick peek at some of the week's other most anticipated retail earnings.

JD.Com

Wall Street's fourth-quarter forecast for this Chinese online purveyor of consumer electronics calls for earnings per share (EPS) to have fallen from $0.06 in the year-ago period to a per-share net loss of $0.12. The consensus of 18 Estimize respondents sees a break-even quarter, though both Estimize and Wall Street overestimated EPS in the previous quarter. The Wall Street analysts are looking for a net loss for the full year as well.

Both Wall Street and Estimize predict that revenue will come in at about $8.1 billion, which would be around 50 percent higher than in the same period of last year, and also the highest quarterly revenue in the past two years. The company is scheduled to report its results very early on Tuesday.

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Staples

When this office supply superstore operator shares its results early Friday, the Wall Street forecast is that it will show EPS of $0.28 for the fiscal fourth quarter. That would compare to the $0.31 per share in the same period of last year and is in line with Estimize expectations and the midpoint of the company's guidance.

Revenue for the three months that ended in January will total $5.4 billion, or down more than 4 percent year over year, if the Wall Street analysts and consensus of six Estimize estimates are correct. The analysts also see full-year revenue almost 6 percent lower than in the previous year to $21.1 billion, and EPS slipping a nickel to $0.91.

And Others

American Eagle Outfitters, AutoZone, Barnes & Noble, Big Lots, Burlington Stores, Costco Wholesale, Kroger and Ross Stores are among the retail companies that Wall Street analysts expect to show earnings growth this week.

Earnings declines are in the works for Abercrombie & Fitch, Dollar Tree and Stage Stores, as well as a net loss for Ascena Retail, if the consensus forecasts are correct.

At the time of this writing, the author had no position in the mentioned equities.

Image Credit: By Anthony92931 (Own work) [CC BY-SA 3.0], via Wikimedia Commons

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