Market Overview

The Earnings Spotlight Is On Wal-Mart And Other Retail Giants This Week

The Earnings Spotlight Is On Wal-Mart And Other Retail Giants This Week

  • Big-box retailers will highlight the week's quarterly earnings reports.
  • Expectations are low for Wal-Mart Stores, Inc. (NYSE: WMT) and Best Buy Co Inc (NYSE: BBY), but somewhat higher for Home Depot Inc (NYSE: HD) and Target Corporation (NYSE: TGT).
  • Bottom line growth is expected from some other retailers as well.
  • For the most part, the retailers that have stepped into the earnings spotlight so far have given investors and analysts little to be thrilled about. Will that change as big-box giants join the third-quarter reporting parade this week?

    Expectations for the world's largest retailer, Wal-Mart are not high, with declines forecast for both the top and bottom lines. Things are not anticipated to be much better at Best Buy Co Inc.

    However, solid year-on-year earnings growth is in the cards for Home Depot and Target, if Wall Street predictions for the quarter are correct. But, it may be guidance for the current that determines how their share prices fare.

    Below is a quick look at what is expected from these and a peek at some of the week's other most anticipated reports from retailers and others.

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    Best Buy

    In its report early Thursday, this purveyor of consumer electronics is expected to report that its earnings per share (EPS) came to $0.36 for the period that ended in October, according the consensus of 23 Estimize estimates. That would be up a couple of pennies from in the year-ago period.

    Revenue is expected to total $8.88 billion for the fiscal third quarter, which would be around 5 percent lower relative to the same period of last year. Note that both Wall Street and Estimize underestimated revenue and earnings back in the second quarter.

    Home Depot

    This Atlanta-based specialty retailer will post EPS of $1.35 for its fiscal third quarter, if Estimize's consensus forecast is accurate. That would be up from $1.11 in the year-ago period. Wall Street is not quite as optimistic, with a $1.32 EPS forecast, though that estimate is unchanged in the past 60 days.

    The 94 Estimize survey respondents see revenue for the three months that ended in October at about $21.82 billion. That likewise is higher than the Wall Street expectations. Watch for Home Depot to reveal its latest financial results before Tuesday's regular trading session commences.


    When this big-box store operator shares its results first thing Wednesday, the consensus of 51 Estimize estimates is that it will show a profit of $0.88 per share. That would compare to the $0.54 EPS in the same period of last year. Note that it is also above the company guidance for EPS of $0.84.

    Revenue for the three months that ended in October will be $17.65 billion, or essentially flat year-over-year if Estimize is correct. Estimates from both Wall Street and Estimize were in line with posted revenue in the previous quarter, though they both underestimated per-share earnings.


    The fiscal third-quarter forecast for the empire that Sam Walton built calls for EPS to have dropped from $1.15 in the year-ago period to $0.98, according to 74 Estimize respondents and to Wall Street analysts. Also, revenue is expected to have slipped marginally to $117.66 billion for the period.

    In the past two periods, both Wall Street and Estimize overshot with their EPS expectations. Note that the analysts' forecast has decreased by a dime per share in the past 90 days. Wal-Mart is scheduled to release its results Wednesday before the opening bell.

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    And Others

    Of course, these are not the only retailers on deck to share their latest results this week. At least some growth in earnings is coming from Foot Locker, L Brands, Lowe's, Ross Stores, Urban Outfitters and Vipshop, if the analysts are correct.

    EPS at TJX Companies are expected to be the same as a year ago.

    However, the consensus forecasts call for declining earnings from Abercrombie & Fitch, Gap, and Staples.

    Other companies expected to reveal their results this week include, from which earnings growth is forecast, as well as Agilent Technologies, Keurig Green Mountain and NetApp, which are seen posting smaller earnings than a year ago.

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