Canadian banks are scheduled to step into the earnings spotlight this week, with third-quarter reports coming from Bank of Montreal (NYSE: BMO), Bank of Nova Scotia (NYSE: BNS), Canadian Imperial Bank of Commerce (NYSE: CM), Royal Bank of Canada (NYSE: RY), and Toronto-Dominion Bank (NYSE: TD). While Canadian banks on the whole held up better than their U.S. counterparts during the financial crisis, these five are expected to report that their earnings are still declining in the most recent quarter.
Analysts surveyed by Thomson Reuters are looking for EPS for these banks to have fallen from 15% to 25% from a year ago. Their long-term EPS growth forecast is for between 10% and 12%, which is in the same range as U.S. rivals JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC), but better than Bank of America Corp. (NYSE: BAC) and Citigroup Inc. (NYSE: C). Earnings multiples for these Canadian banks are 10x to 12x, but none of them have a First Call consensus recommendation is to buy. The Motley Fool, though, considers TD as a value stock and RY a stock poised to pop. All of them are trading much closer to their 52-week highs than lows, and shares of all are up more than 100% since March lows.
Also thriving during the economic downturn is Dollar Tree Stores Inc. (NASDAQ: DLTR). The nation's leading operator of dollar stores saw the retirement of a long-time board member in its second quarter. Dollar Tree is expected to report that its earnings grew 22.2% from a year ago to $0.54 per share. Revenue for the quarter is expected to be 11.2% higher to $1.2 billion, in line with preliminary results. Analysts so far expect the third-quarter results to be about the same. The Chesapeake, Va.-based company has topped earnings expectations in recent quarters, by as much as six cents per share. The long-term EPS growth forecast is 13.6%, which is better than that of rival Family Dollar Stores Inc. (NYSE: FDO). Dollar Tree's earnings multiple is 14.0x. The First Call consensus recommendation is to buy DLTR; TheStreet.com recently pegged it as a top stock. At $46.04, the share price is near its 52-week high, as well as 10.4% higher than at the beginning of the year.
Discount retailer Fred's Inc. (NASDAQ: FRED) is also expected to report some earnings growth this week, while Kirkland's Inc. (NASDAQ: KIRK) is expected to have swung to a profit. However, analysts expect to see lower earnings from Big Lots Inc. (NYSE: BIG) and a loss from Cost Plus Inc. (NASDAQ: CPWM) and Tuesday Morning Corp. (NASDAQ: TUES).
Analysts expect poultry producer Sanderson Farms Inc. (NASDAQ: SAFM) also to report swinging to a profit this week. Earnings for its fiscal third quarter are expected to be $1.76 per share, compared to a loss of $0.09 per share in the year-ago period. Revenue for the quarter is expected to be up 1.9% to $475.7 million. For the full year, the forecast is for a profit of $3.83 per share on sales of $1.8 billion. Earnings of this dividend-paying company beat estimates in the past two quarters -- more than doubling expectations in the second quarter. The long-term EPS growth forecast is 9.0%, which is a bit lower than that of larger rival Tyson Foods Inc. (NYSE: TSN), but better than the food and beverage industry average. Sanderson's earnings multiple is 8.2x, and the consensus recommendation is to buy SAFM. Shares are down 4.2% from three months ago to close Friday at $39.71.
Another company that analysts expect to report swinging to a profit from a year ago is Winn-Dixie Stores Inc. (NYSE: WINN), the Jacksonville Fla.-based supermarket chain operator. Earnings for the fiscal fourth quarter that ended in June are expected to come to $0.16 per share, compared to a year-ago loss of $0.09 per share. For the fiscal year, earnings are expected to be $0.42 per share (+40.5%). Revenue for the quarter is expected to total $1.7 billion (about the same as a year ago), and for the year, up 1.2% to $7.4 billion. Results have easily bested expectations in the past three quarters, including a surprise profit in the second quarter. The EPS growth forecast for the year is 60.2%, and the earnings multiple is 20x. Winn-Dixie had more cash on hand than long-term debt in the previous quarter, and recently said it had completed upgrades to many of its stores. Zack's identified WINN as a top performer since it boosted its guidance in July. The share price ended the week at $15.58. Shares are 10.5% higher than three months ago, but it is still 3.2% lower than a year ago.
Also scheduled to report this week are American Eagle Outfitters Inc. (NYSE: AEO), Burger King Holdings Inc. (NYSE: BKC), Guess Inc. (NYSE: GES), J. Crew Group Inc. (NYSE: JCG), Staples Inc. (NASDAQ: SPLS), and Tiffany & Co. (NYSE: TIF), all expected to post lower earnings. And countering some of the recent data that shows that things may be starting to turn around in the housing sector, homebuilder Toll Brothers Inc. (NYSE: TOL) is expected to post a much deeper net loss for its fiscal third quarter.
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