Market Overview

High Hopes For Lululemon Earnings, Not So Much For Abercrombie

High Hopes For Lululemon Earnings, Not So Much For Abercrombie
  • Upcoming earnings highlights include the latest results from two apparel retailers.
  • Wall Street analysts are looking for earnings growth from only one of them.
  • Both have mixed track records recently with beating earnings estimates.

The parade of quarterly results from big retailers is winding down, and along with it, the current earnings reporting season. But two more notable retailers take their turns in the earnings spotlight this week, and the consensus forecasts for Abercrombie & Fitch Co. (NYSE: ANF) and Lululemon Athletica inc. (NASDAQ: LULU) are starkly different.

Wall Street's consensus forecast calls for Abercrombie, retailer of upscale casual wear for young consumers, to have swung from last year's $0.12 in earnings per share (EPS) to a net loss of $0.20 per share. The consensus of 20 Estimize respondents calls for -$0.22 per share for the fiscal second quarter that ended in July. Note that both Wall Street and Estimize overestimated EPS results in the prior quarter.

Estimize also overestimated the revenue in the previous quarter, and this time, respondents are looking for $786.0 million, which would be around 4 percent lower year over year. The Wall Street estimate is a bit more pessimistic at $782.1 million, but so far the analysts see a smaller decline in the current period.

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When Lululemon shares its fiscal second-quarter results, the Wall Street forecast is that its earnings will have increased more than 10 percent from a year ago to $0.38 per share, on $ 514.87 million in revenue, which would be a more than 13 percent jump. Note that analysts overestimated earnings in two of the past four quarters, and at least one analyst expects a marginal decline year-over-year.

The forecast from 60 Estimize respondents sees EPS from the Canadian athletic apparel retailer coming in at $0.39. They are a tiny bit more optimistic on revenue too, with a consensus forecast of $515.6 million for the three months that ended in July. That is above the company guidance on the top and bottom line as well.

Abercrombie is scheduled to report its results before the opening bell on Tuesday, while Lululemon is expected to post its numbers first thing on Thursday.

Some other, smaller retailers are scheduled to share their results this week too. The consensus forecasts call for per-share earnings at Five Below, Ollie's Bargain Outlet and Shoe Carnival to be at least a little higher than a year ago. EPS from Chico's FAS, DSW, Genesco and Lands' End are expected to be smaller year-over-year. And net losses are in the cards for Christopher & Banks and Fred's, if the analysts are correct.

The week's other most anticipated earnings reports include those from Broadcom, Campbell Soup, Ciena, Palo Alto Networks, and Smith & Wesson, which are all forecast to show growth on the bottom line, and H&R Block, with a seasonal net loss expected.

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

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Latest Ratings for ANF

Jan 2020BairdMaintainsNeutral
Jan 2020WedbushMaintainsNeutral
Sep 2019DA DavidsonInitiates Coverage OnNeutral

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