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Q4 Retail Earnings Preview: Will The Results Reflect High Consumer Confidence?

Q4 Retail Earnings Preview: Will The Results Reflect High Consumer Confidence?
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While the economy's fundamentals are not picture-perfect, they still point to a healthy environment. A report released by the Conference Board Tuesday said that confidence among the U.S. consumers rose to the highest level in over 17 years.

The consumer confidence index rose from 124.3 in January to 130.8 in February, with the most recent month's reading being the highest since the 132.6 recorded in November 2000. The present situation index climbed 7.7 points to 162.4 and the expectations index was up a more modest 5.7 points to 109.7.

The metric has been advancing solidly since the middle of 2016. Did the buoyant consumer confidence translate to more consumer spending? Did it provide a shot in the arm for retailers in the holiday season?

Lynn Franco, the director of economic indicators at the Conference Board, lent some insight in a Tuesday report. 

"Consumers' assessment of current conditions was more favorable this month, with the labor force the main driver. Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects," Franco said. 

"Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead."

A Mixed Bag For Large Retailers So Far 

  • Walmart Inc (NYSE: WMT)'s fourth-quarter report Feb. 20 revealed an adjusted EPS that fell 4 cents short of consensus estimates and a sales beat of $136.3 billion against a $134.9-billion estimate. The Bentonville, Arkansas-based retailer raised its dividend by 1 cent to 52 cents per share. 
  • Home Depot Inc (NYSE: HD) reported better-than-expected Q4 results and increased its dividend by over 15 percent. The company reaffirmed its 2020 sales guidance. 

Department Stores Sparkle

The department store space exuded some optimism, with Dillard's, Inc. (NYSE: DDS) reporting a Q4 beat. The stock reacted with a nearly 17-percent jump. 

  • Macy's Inc (NYSE: M) reported above-consensus results for its holiday quarter.
  • Footwear retailer Deckers Outdoor Corp (NYSE: DECK) reported forecast-beating earnings and raised its full-year earnings per share guidance.

See also: Analyst: Buy Finish Line Ahead Of Sports Retail Earnings Season

Upcoming Retail Earnings 

Format: earnings date/EPS estimate/revenue estimate. 

Discount Retailers

  • Target Corporation (NYSE: TGT): March 6/$1.37/$22.53 billion. 
  • Costco Wholesale Corporation (NASDAQ: COST): March 7/$1.46/$32.68 billion. 

Department Stores

  • Kohl's Corporation (NYSE: KSS): March 1/$1.75/$6.74 billion. 
  • Nordstrom, Inc. (NYSE: JWN):March 1/$1.25/$4.62 billion.
  • J C Penney Company Inc (NYSE: JCP): March 2/45 cents/$4.05 billion.
  • Sears Holdings Corp (NASDAQ: SHLD): March 7/$1.16/$3.86 billion. 

Apparel Retailers

  • Gap Inc (NYSE: GPS): March 1/59 cents/$4.66 billion. 

Discount Retailers

  • Dollar Tree, Inc. (NASDAQ: DLTR): March 7/$1.9/$6.39 billion. 
  • Dollar General Corp. (NYSE: DG): March 15/$1.48/$6.2 billion. 
  • Five Below Inc (NASDAQ: FIVE): March 20/$1.16/$502.74 million. 

Jewelry Retailers

  • Signet Jewelers Ltd. (NYSE: SIG): March 14/$4.19/$2.23 billion. 
  • Tiffany & Co. (NYSE: TIF): March 16/64 cents/$1.31 billion. 

Footwear Retailers

  • Foot Locker, Inc. (NYSE: FL): March 2/$1.25/$2.22 billion.
  • DSW Inc. (NYSE: DSW): March 13/27 cents/$729.42 million.
  • Genesco Inc. (NYSE: GCO): March 15/$2.09/$902.56 million. 
  • Shoe Carnival, Inc. (NASDAQ: SCVL): March 21/9 cents/$247.97 million.

Related Links:

Wage Pressures And Holiday Comps In The Retail Sector

Posted-In: Conference Board Lynn FrancoEarnings Retail Sales Trading Ideas Best of Benzinga


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