Market Overview

Earnings Previews: Buckle, Dollar Tree, Ross Stores


Retailers The Buckle (NYSE: BKE), Dollar Tree Stores (NASDAQ: DLTR) and Ross Stores (NASDAQ: ROST) are scheduled to report their second-quarter 2011 results tomorrow, August 18, before the markets open. Analysts are expecting to see year-over-year growth of both per-share earnings and revenues from each of them.

The Buckle is a Kearney, Nebr.-based casual apparel purveyor, and it is expected to post earnings of $0.51 per share, as well as revenues of $209.0 million. That is an increase of $0.44 per share and $188.6 million in the same period of last year. Note that 60 days ago the consensus earnings estimate was $0.49 per share. And The Buckle has topped earnings estimates in six of the past eight quarters; it fell short by two cents per share in the most recent quarter.

Dollar Tree's consensus forecast calls for earnings of $0.75 per share, which is up from $0.61 year over year. That estimate is unchanged from 60 days ago. And this discount variety store operator's revenues are predicted to come in at $1.6 billion. That is an increase from $1.4 billion in the same period of last year. Analysts have been underestimating Dollar Tree's quarterly earnings since 2007, however.

Pleasanton, Calif.-based discount retailer Ross Stores is expected to report that per-share earnings rose 16.4% from a year ago to $1.28. Note that the consensus earnings estimate was $1.24 per share 60 days ago. Earnings results have been in line with consensus estimates in recent quarters. Revenues are anticipated to have increased 8.6% to total $2.1 billion.

The stocks of all three of these retailers have outperformed the broader markets year to date. The share prices of The Buckle and Dollar Tree are more than 60% higher than a year ago, while Ross Stores is trading more than 45% higher year over year.

Other retailers scheduled to post quarterly results tomorrow include America's Car-Mart (NASDAQ: CRMT), Bon-Ton Stores (NASDAQ: BONT), Casual Male (NASDAQ: CMRG), Children's Place (NASDAQ: PLCE), Foot Locker (NYSE: FL), GameStop (NYSE: GME), Gap (NYSE: GPS), Sears (NASDAQ: SHLD), Stage Stores (NYSE: SSI) and Stein Mart (NASDAQ: SMRT).

Action Items:

Bullish: Traders interested in exchange traded funds invested in retailers might want to consider the following trades:

  • SPDR S&P Retail (NYSE: XRT): up more than 27% in the past year
  • Vanguard Consumer Discretionary ETF (NYSE: VCR): up more than 19% in the past year
  • Retail HOLDRs (NYSE: RTH): up almost 16% in the past year
  • iShares Dow Jones U.S. Consumer Goods Fund (NYSE: IYK): up more than 15% in the past year

Bearish: Traders may want to consider these alternative positions:

  • Direxion Daily Retail Bear 2X Shares (NYSE: RETS): up more than 11% in the past month
  • ProShares UltraShort Consumer Goods (NYSE: SZK): up more than 8% in the past month

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.


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