Friday's Market Minute: Lack Of Forward Guidance

Even in the midst of the pandemic, companies continue to report earnings. Lululemon Athletica Inc. LULU and KB Home KBH both reported after the bell yesterday. Lululemon posted a beat for its fourth quarter, with total comparative sales up over 20% year-over-year, driven by direct-to-consumer growth. KB Home also beat earnings, with $0.63 eps vs $0.43 expected. However, both these companies withdrew their guidance for the fiscal year, citing uncertainty around coronavirus.

This is becoming a trend around Wall Street: company after company withdraws their forward guidance, pauses buybacks, or cuts dividends. Some of this is certainly prudent; no one knows how long the virus will last, or if the world will take enough protective measures to slow the spread.

The U.S. is fast becoming the worst epicenter for it. However, after a glut of buyback programs in the last few years, dividend increases, and investors clamoring for high growth, how many companies could be taking advantage of the global weakness to brush their prior difficulties under the rug for a few more quarters?