Market Overview

Earnings Expectations for the Week of August 22


The earnings season may be winding down, along with the summer, but this week will bring some more quarterly reports from retailers. Here's a quick rundown of what analysts expect to see from them.

  • Bebe Stores (NASDAQ: BEBE): EPS up 50.0% to $0.04 (reports Thursday)
  • Express (NYSE: EXPR): EPS up 46.7% to $0.15 (reports Wednesday)
  • Tiffany (NYSE: TIF): EPS up 21.4% to $0.70 (reports Friday)
  • Signet Jewelers (NYSE: SIG): EPS up 20.3% to $0.59 (reports Thursday)
  • rue21 (NASDAQ: RUE): EPS up 18.8% to $0.32 (reports Wednesday)
  • Williams Sonoma (NYSE: WSM): EPS up 13.9% to $0.36 (reports Tuesday)
  • Guess (NYSE: GES): EPS up 11.1% to $0.81 (reports Wednesday)
  • Fred's (NASDAQ: FRED): EPS flat at $0.13 (reports Thursday)
  • Shoe Carnival (NASDAQ: SCVL): EPS down 6.3% to $0.30 (reports Thursday)
  • Big Lots (NYSE: BIG): EPS down 8.3% to $0.44 (reports Thursday)
  • American Eagle Outfitters (NYSE: AEO): EPS down 15.4% to $0.11 (reports Monday)
  • Collective Brands (NYSE: PSS): EPS down 56.3% to $0.14 (reports Wednesday)

Also, Cost Plus (NASDAQ: CPWM), dELiA*s (NASDAQ: DLIA) and Pacific Sunwear of California (NASDAQ: PSUN) are expected to post net losses that are larger per share than in the same period of last year.


Among this week's retail results, one of the most anticipated may be the second-quarter report from Tiffany & Co. The consensus forecast is that this leading manufacturer and marketer of fine jewelry and other luxury products will report per-share earnings of $0.70, which is up from $0.55 per share in the same period of last year. Analysts also expect to see revenues of $785.4 million, an increase of 17.4% from a year ago. And analysts are looking for year-over-year growth of both EPS and revenues in the current quarter as well. Note that analysts have underestimated Tiffany's per-share earnings in the previous five quarters.

Tiffany has a dividend yield of 2.0% and a return on equity of 18.2%. The long-term earnings per share growth forecast is 14.7%. Though the P/E and PEG ratios are higher than the industry averages, 13 analysts rate the stock a Buy or Strong Buy, compared to just one that recommends selling it.

Tiffany's share price has plunged about 31% in the past month, falling from a 52-week high of $84.49 in July to end last week at $57.36. But shares are still up almost 35% from a year ago, and the stock has still outperformed the broader markets over the past six months.

Heinz and Hormel

Among the week's other earnings highlights will be reports from food producers H.J. Heinz (NYSE: HNZ) and Hormel Foods (NYSE: HRL). The consensus forecasts call for marginal earnings growth from each of them.

Heinz is expected to post first-quarter fiscal 2012 earnings of $0.76 per share on revenues of $2.8 billion. That is up from $0.75 per share and $2.5 billion in the same period of last year. And Hormel is expected to report that its third-quarter fiscal 2011 earnings rose 8.6% to $0.35 per share. Revenues are expected to be up 7.8% year over year to $1.9 billion. Both companies have tended to beat earnings estimates in recent quarters, though Heinz missed by a penny per share in the previous quarter.

Both of these S&P 500 companies have price-to-earnings ratios of about 16 and long-term EPS growth forecasts of more than 6%. Hormel's dividend yield of 1.8% while Heinz's is 3.7%. And both companies have healthy return on equity numbers.

Heinz shares are trading more than 14% higher than a year ago; the stock has outperformed competitors ConAgra Foods (NYSE: CAG) and Campbell Soup (NYSE: CPB) over the past six months. The share price of Hormel is almost 30% higher year over year; the stock has outperformed competitors Smithfield Foods (NYSE: SFD) and Tyson Foods (NYSE: TSN) over the past six months. Both stocks have outperformed the broader markets year to date.

And Others

Here is what is expected from others predicted to post earnings growth this week:

  • Applied Materials (NASDAQ: AMAT): EPS up 12.1% to $0.33 (reports Wednesday)
  • Dollar Financial (NASDAQ: DLLR): EPS up 31.7% to $0.41 (reports Thursday)
  • Focus Media (NASDAQ: FMCN): EPS up 18.9% to $0.37 (reports Monday)
  • Krispy Kreme Doughnuts (NYSE: KKD): EPS up 50.0% to $0.06 (reports Thursday)
  • Omnivision Technologies (NASDAQ: OVTI): EPS up 45.8% to $0.72 (reports Thursday)
  • OSI Systems (NASDAQ: OSIS): EPS up 27.7% to $0.65 (reports Thursday)
  • Solera Holdings (NYSE: SLH): EPS up 11.7% to $0.60 (reports Wednesday)

Analysts anticipate lower earnings from Medtronic (NYSE: MDT), Patterson (NASDAQ: PDCO), Toll Brothers (NYSE: TOL) and Trina Solar (NYSE: TSL), as well as a net loss from Sanderson Farms (NASDAQ: SAFM).

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