Market Overview

Earnings Expectations For Big-Box Retailers Best Buy And Home Depot Are Very Different

Earnings Expectations For Big-Box Retailers Best Buy And Home Depot Are Very Different
  • Two big-box specialty retailers are expected to report their fourth-quarter results this week.
  • Wall Street analysts have very different expectations for both of them.
  • But Wall Street also underestimated earnings from both in the previous period.

The parade of reports from big retailers kicked off last week with unimpressive results from Wal-Mart and Nordstrom. Many more of big retailers are on deck to share their latest earnings this week, including specialty retailers and big-box store operators Best Buy Co Inc (NYSE: BBY) and Home Depot Inc (NYSE: HD).

The consensus forecasts of Wall Street analysts suggest no big swings on the top or bottom lines for either of them, but they are seen moving in different directions. Are either Best Buy or Home Depot likely to offer up a positive surprise or rosy guidance? If they do, how much will investors cheer?

Below is a quick look at what is expected from the reports of these two stocks. That is followed by a quick peek at some of the week's other most anticipated earnings reports from retailers.

Best Buy

When the home electronics superstore operator shares its results early Thursday, the consensus forecast of Estimize calls for a profit of $1.42 per share for the fourth quarter. That would be down from earnings per share (EPS) of $1.48 in the same period of last year. Earnings handily topped expectations in the past few quarters, and the Wall Street estimate has risen four cents in the past 60 days.

Revenue for the three months that ended in January will be $13.67 billion, or down around 4 percent year over year, if the eight survey respondents are correct. Wall Street analysts are looking for just $13.61 billion for the quarter, as well as $39.51 billion (up about 2 percent) for the year.

See also: Were Wal-Mart's Earnings Really All Doom And Gloom?

Home Depot

Wall Street's fourth-quarter forecast for this Atlanta-based home improvement retailer calls for EPS to have risen by a dime from the year-ago period to $1.10. Some 112 Estimize respondents predict EPS will be $1.12. Note that Wall Street underestimated EPS in the previous quarter, but its current estimate has not changed in the past 60 days.

However, Wall Street's consensus revenue estimate is a bit more optimistic than that of Estimize, at $20.39 billion and $20.37 billion, respectively. In the same quarter of last year, Home Depot posted $19.16 billion in revenue. Look for the company to report its results before Tuesday's opening bell.

And Others

Foot Locker, J.C. Penney, L Brands, Lowe's, Office Depot, Target and TJX Companies are among the retail companies that Wall Street analysts expect to show earnings growth this week.

Earnings declines are in the works for Chico's FAS, Gap, Kohl's and Macy's, as well as a net loss for Sears, if the consensus forecasts are correct.

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

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