In the next week or so, many major U.S. retail companies will begin to report their third-quarter results. Four in particular will report their earnings November 12. Here's what to expect when they do:
Back On Track
Analysts anticipate a strong quarter from Kohl's (NYSE: KSS) when the department store operator reports its results before the opening bell November 12. EPS is projected to rise 15% on a 5.1% pop in sales on a year-over-year basis. The company's stock price is up 54% so far in 2009.
In Q2, total sales were up 2.2% at this retailer, and the company raised its fiscal 2009 earnings guidance. Kohl's will be looking to carry this momentum into Q4. The company is coming off an October in which same-store sales rose by 1.4%, and it is seeing strength in its home business.
Nordstrom (NYSE: JWN) posted an especially strong October with same-store sales growth of 6.5%. Total sales are expected to be flat for the company's Q3, but EPS is expected to climb 6.1% when Nordstrom announces its earnings after the market close November 12. The retailer has benefited from its discounted rack stores, which have been leading the company's full-line stores.
Steady Performers
The consistent performance delivered by Wal-Mart Stores (NYSE: WMT) throughout this most recent economic downturn has been extremely remarkable. Analysts are now calling for the world's largest retailer to post a 5.2% gain in EPS Nov. 12 on a 1.2% improvement in sales compared to Wal-Mart's year-ago quarter.
In Q2, Wal-Mart came in slightly ahead of Wall Street estimates and at the upper end of the company's earnings guidance. More recently, the retailer has upped its attempt to drive online shoppers to its website and take away market share from rival Amazon.com (Nasdaq: AMZN) by offering some hardcover books set for release in November at $9 each.
After dropping off in the second half of 2008, Urban Outfitters (Nasdaq: URBN) has seen its stock price storm up the charts in 2009. Year-to-date, URBN shares have soared 115%. Analysts are expecting the apparel retailer to announce EPS a penny below its results from Q3 2008 and quarterly sales growth of 4.8%. (For more on analyst expectations, be sure to read Analyst Forecasts Spell Disaster For Some Stocks.)
The Bottom Line
The retail industry is coming off a particularly tough end to 2008 and beginning to 2009. Since then, though, many of these names appear to be heading back in the right direction. On a comparable basis, Q3 numbers should be close to or above results from a year ago for many of these companies. Whether they can sustain this positive turnaround over the long term remains to be seen.
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