Advertisement
Canada markets closed

  • S&P/TSX

    21,885.38
    +11.66 (+0.05%)
     

  • S&P 500

    5,048.42
    -23.21 (-0.46%)
     

  • DOW

    38,085.80
    -375.12 (-0.98%)
     

  • CAD/USD

    0.7323
    +0.0025 (+0.34%)
     

  • CRUDE OIL

    83.77
    +0.96 (+1.16%)
     

  • Bitcoin CAD

    89,104.64
    +1,530.48 (+1.75%)
     

  • CMC Crypto 200

    1,398.50
    +15.93 (+1.15%)
     

  • GOLD FUTURES

    2,344.60
    +6.20 (+0.27%)
     

  • RUSSELL 2000

    1,981.12
    -14.31 (-0.72%)
     

  • 10-Yr Bond

    4.7060
    +0.0540 (+1.16%)
     

  • NASDAQ futures

    17,816.50
    +152.00 (+0.86%)
     

  • VOLATILITY

    15.37
    -0.60 (-3.76%)
     

  • FTSE

    8,078.86
    +38.48 (+0.48%)
     

  • NIKKEI 225

    37,628.48
    -831.60 (-2.16%)
     

  • CAD/EUR

    0.6822
    +0.0003 (+0.04%)
     
MARKETS LIVE BLOG:

STOCKS SLIDE AFTER META'S REALITY CHECK, DOWNBEAT GDP

U.S. first-quarter GDP report prompts inflation, growth concerns among investors

Retail Stocks' Q2 Earnings Slated on Aug 1: TXRH, HVT, NLS

Zacks Equity Research
Updated

Nearly halfway into the second-quarter earnings season, it looks like we are set to witness the fifth straight quarter of year-over-year earnings decline. Nonetheless, the results reported so far depict a modest growth picture, especially when compared to the last two quarters.

Out of the 208 S&P 500 members that have come up with their quarterly numbers, approximately 73.1% have posted positive earnings surprises, while 51.9% surpassed top-line expectations – per the latest Zacks Earnings Trends report as of Jul 27, 2016. However, earnings for these companies are down 4.7% from the same period last year, while revenues have inched up 0.4%.

Taking a look at the future projections, among the 16 Zacks sectors which together decide the fate of the index, 10 are anticipated to post a year-over-year decline in earnings in the second quarter. Once again, Oil/Energy is expected to cause most of the damage, with Basic Materials, Aerospace and Transportation also being a drag.

Notably, the Retail/Wholesale sector seems to show some resilience despite challenges including overseas turmoil, yet-to-recover Chinese economy, fluctuating commodity prices and Fed rate-related controversies that are affecting consumers’ spending behavior to an extent. As of Jul 27, 29.5% of the total number of S&P 500 companies in this sector had reported their results, wherein 38.5% delivered an earnings beat and 15.4% cruised ahead of revenue estimates. However, the top and bottom lines declined 0.8% and 2.4% year over year, respectively.

Nonetheless, the story is not over yet as most retailers are yet to unveil their results. While total earnings for the Retail/Wholesale sector are expected to drop marginally by 0.2%, revenues are projected to increase 4.7% in Q2. So, let’s take a look at a few Retail/Wholesale stocks that are queued up for second-quarter 2016 earnings releases on Aug 1, 2016.

To start with Texas Roadhouse, Inc. TXRH, we are unsure whether this service restaurant chain will be able to post a positive earnings surprise in the quarter to be reported. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as the company has an Earnings ESP of -2.27% and a Zacks Rank #3. The Zacks Consensus Estimate for second-quarter earnings is pegged at 44 cents, while the Most Accurate Estimate stands at 43 cents. Further, we note that in the trailing four quarters, the company has underperformed the Zacks Consensus Estimate by an average of 4.2%.

TEXAS ROADHOUSE Price and EPS Surprise

TEXAS ROADHOUSE Price and EPS Surprise | TEXAS ROADHOUSE Quote

ADVERTISEMENT

Next, let’s take a sneak peek at Haverty Furniture Companies Inc. HVT. While this full-service home furnishings retailer has outperformed the Zacks Consensus Estimate by an average of 1.4% over the trailing four quarters, our proven model does not conclusively show that Haverty Furniture is likely to beat earnings estimates this quarter. This is because the company currently carries an Earnings ESP of 0.00%, with both the Most Accurate Estimate and the Zacks Consensus Estimate pegged at 19 cents. Further, the stock carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

HAVERTY FURNIT Price and EPS Surprise

HAVERTY FURNIT Price and EPS Surprise | HAVERTY FURNIT Quote

Finally, let’s watch manufacturer and marketer of innovative health and fitness products – Nautilus Inc. NLS, which boasts a splendid earnings history, as is evident from its trailing four-quarter average of 7.1%. However, it currently looks unlikely for the company to keep this streak alive, as this Zacks Rank #4 stock has an Earnings ESP of 0.00%. The Most Accurate Estimate and the Zacks Consensus Estimate for second-quarter earnings are both pegged at 9 cents. So, let’s wait and see what’s in store for Nautilus.

NAUTILUS INC Price and EPS Surprise

NAUTILUS INC Price and EPS Surprise | NAUTILUS INC Quote

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
TEXAS ROADHOUSE (TXRH): Free Stock Analysis Report
 
HAVERTY FURNIT (HVT): Free Stock Analysis Report
 
NAUTILUS INC (NLS): Free Stock Analysis Report
 
To read this article on Zacks.com click here.