Market Overview

Retail Earnings Parade Continues: Best Buy, Costco, Sears

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Retail Earnings Parade Continues: Best Buy, Costco, Sears
  • Three more big retailers are set to share their latest quarterly results this week.
  • Wall Street expectations vary for each of them, reflecting the retail results thus far.
  • Consensus estimates for other smaller and specialty retailers on deck this week are mixed but mostly positive.

Even as the number of scheduled earnings reports begins to slow to a trickle, the parade of quarterly results from big retailers continues. This week's highlights will include the latest numbers from Best Buy Co Inc (NYSE: BBY), Costco Wholesale Corporation (NASDAQ: COST) and Sears Holdings Corp (NASDAQ: SHLD).

Retail earnings reports so far this season have brought both big surprises and big disappointments, and the expectations for this week are varied. Wall Street forecasts call for earnings growth from the membership warehouse operator, a shrinking profit from the big-box electronics retailer and yet another net loss from the struggling department store operator.

Below is a quick look at what is expected from the reports of these three retailers, as well as a peek at some of the others that also are on tap to post quarterly results this week.

Best Buy

In its report early on Tuesday, this retailer of technology products and services is expected to say that in its fiscal first quarter it had earnings of $0.36 per share, according to 40 Estimize respondents. That would be a penny less than in the same period of last year. The Wall Street consensus estimate is $0.35 per share, but note that analysts have underestimated EPS in the past several quarters.

The Estimize revenue estimates were in line with results in the past two quarters, and this time the respondents are looking for about $8.29 billion. The Wall Street forecast concurs. It would be about 3 percent lower year-over-year, as well as the lowest quarterly revenue in the past two years.

See also: Is The Department Store Model Doomed? This Pro Reveals 3 Different Competitive Threats

Costco

The consensus Wall Street forecast calls for this operator of almost 700 membership warehouses in North America, Asia and Europe to post fiscal third-quarter EPS of $1.22 (or up about 4 percent from in the year-ago period) and for revenue to have risen nearly 4 percent to $27.12 billion. However, EPS fell short of expectations in the previous two quarters, ending a streak of five earnings beats.

Estimize is a bit more optimistic on earnings, with the consensus of 60 respondents pegging results at $1.23 per share, but on revenue of $26.99 billion for the three months that ended in Mary. Back in the fourth quarter, Estimize underestimated on both the top and bottom lines. Costco is scheduled to share its latest results after Wednesday's closing bell.

Sears

If the one Wall Street analyst still surveyed by Thomson/First Call is correct, this iconic but long-struggling department store operator will post a net loss of $3.20 per share for its fiscal first quarter. That would compare to the $3.48 per share net loss reported in the year-ago period. But the net losses have been deeper than predicted in most recent periods. Estimize has no forecast for Sears.

Wall Street (again represented by just one analyst) sees revenue in the three months that ended in April falling to $5.26 billion, down more than 10 percent from a year ago. Note that the analyst also predicts year-on-year revenue declines (and further net losses) in the current quarter and for the full year. Sears is expected to share its most recent results Thursday morning.

And Others

Other retailers that Wall Street analysts expect to show at least some earnings growth when they report this week include AutoZone, Big Lots, Burlington Stores, Chico's FAS, Dollar General, Dollar Tree, Express, Fred's, Signet Jewelers, ULTA Beauty and Williams-Sonoma.

EPS at DSW, GameStop, Genesco, Kirkland's and Tiffany will be smaller than a year ago, if analysts' expectations are on target. And the consensus forecasts call for net losses from Abercrombie & Fitch and Tilly's.

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

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