The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings.
Analysts surveyed by Thomson Financial expect earnings growth, compared to the same period in the previous year, from Urban Outfitters (NASDAQ: URBN) to be 22.7% to 22 cents per share, from Wal-Mart Stores (NYSE: WMT) to be 9.3% to 75 cents per share, and from TJX Companies (NYSE: TJX) to be 7.5% to 40 cents per share.
Analysts expect earnings declines from the previous year from JC Penney (NYSE: JCP) by 52.9% to 49 cents per share, from Kohl's (NYSE: KSS) by 34.4% to 42 cents per share, and from Nordstrom (NYSE: JWN) by 18.3% to 49 cents per share.
In the case of Abercrombie & Fitch (NYSE: ANF), analysts expect earnings to remain flat, year over year, at 65 cents per share.
And then there's Macy's (NYSE: M), which is expected to swing to a loss of 2 cents per share, compared to a profit of 16 cents a year ago.
The sample size may be too small to define any significant trends, but the numbers do suggest that analysts expect profit declines to be deeper than profit growth, and that consumers may be more likely, given the current state of the economy, to buy clothes at Wal-Mart or TJ Maxx than at Nordstrom or Abercrombie.
The coming results will reveal if those expectations are correct.
Day one of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Management Advisory Committees meeting: Purdue Pharma's NDA for Oxycontin.
Anadarko Petroleum (NYSE:APC) to report Q1 earnings; conference call Tuesday at 10:00am.
Tuesday, May 6
Day two of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Mgmt Advisory Committees meeting: Cephalon's (NASDAQ:CEPH) sNDA for Fentora.
Molson Coors (NYSE:TAP) to report Q1 earnings; conference call at 12:00pm.
MOST NOTEWORTHY: Abercrombie & Fitch, ENGlobal Corp and Wausau Paper were today's noteworthy initiations:
Morgan Keegan initiated Abercrombie & Fitch (NYSE:ANF) with a Market Perform citing lack of comp momentum and the outlook for consumer spending.
Jesup & Lamont expects ENGlobal's (NASDAQ:ENG) earnings momentum to remain in place due to sustained demand for energy products. Shares were initiated with a Buy rating and $13.25 target.
Soleil expects Wausau Paper (NASDAQ:WPP) shares to be driven by its value-added market focus, product innovation and improved mix. Shares were assumed with a Buy rating.
OTHER INITIATIONS:
Citigroup assumed coverage of XM Satellite Radio (NASDAQ:XMSR) with a Hold rating from Buy, and a $12.25 target from $17. The firm also assumed Sirius Satellite (NASDAQ:SIRI) with a Buy rating and $8 target from $4.25.
Morgan Stanley initiated MarkWest Energy (NYSE:MWE) with an Overweight rating.
Soleil initiated Potash (NYSE:POT) with a Hold rating.
PDUFA date for Bristol-Myers Squibb Co. (NYSE: BMY)'s supplemental Biologics License Application for Orencia for the treatment of Juvenile Rheumatoid Arthritis.
Alcoa Inc. (NYSE: AA) to report Q1 earnings; conference call at 5pm.
Tuesday, April 8
Chattem Inc. (NASDAQ: CHTT) to report Q1 earnings; conference call at 9:00am.
FOMC to release minutes of the March 18th meeting at 2:00pm.
The Columbus Children's Hospital in Ohio is under fire after accepting a $10 million donation from Abercrombie & Fitch (NYSE: ANF) -- and agreeing to christen a new building The Abercrombie & Fitch Emergency Department and Trauma Center.
Not surprisingly, the Campaign for a Commercial-Free Childhood is up in arms. In a press release, the group urged the hospital to "rescind the naming rights because of Abercrombie's long history of using highly sexualized images to market its brand to teens and preteens and selling clothing that objectifies and demeans young people."
They certainly have a point. Given how sexually charged Abercrombie's advertising is, an Abercrombie children's hospital certainly is an interesting juxtaposition.
But the truth is that Abercrombie doesn't really harm children. This isn't like a hospital building the Philip Morris Cancer Ward. And if this is a deal with the devil, it's a deal that will provide $10 million for helping children.
It would be a lot worse if the hospital turned down money to help children as a matter of principal. Abercrombie isn't that evil.
Abercrombie & Fitch Co. (NYSE: ANF), Gap Inc. (NYSE: GPS), and Nordstrom Inc. (NYSE: JWN) are scheduled to report earnings next week, offering a chance to see how these apparel retailers have been doing in the lead-up to the holiday season.
Abercrombie hasn't fallen short of Wall Street's earnings expectations since Q2 2006. When it reported second quarter 2008 results back in August, earnings were 88 cents per share, beating the consensus estimate of analysts surveyed by Thomson Financial by a penny, as well as the actual 72 cents per share in the same period a year ago. For the third quarter, analysts expect $1.28 per share, up from $1.11 in the same period a year ago.
Abercrombie's 13.6% earnings per share growth forecast for the next year is better than the S&P 500, and much better than the apparel retail industry average of -0.5%. The analysts' consensus recommendation has been to buy Abercrombie for at least six months, but about half of those analysts rate it a hold. The share price reached a 10-year high of $85.77 earlier this month, before sliding to close Friday at $75.01.
For news about Abercrombie and other retailers that could influence the earnings results, check out BloggingStocks' Abercrombie & Fitch coverage.
MOST NOTEWORTHY: PhotoChannel Networks, BioMarin Pharmaceutical, Double-Take and Leapfrog Enterprises were today's noteworthy initiations:
Merriman believes PhotoChannel Networks (OTC: PNWIF) is positioned to become a leading provider to the digital photofinishing market through its offering of a fully-integrated solution to retailers. The firm started shares with a Buy rating.
Jefferies resumed coverage of BioMarin Pharmaceutical (NASDAQ: BMRN) with a Buy rating and $33 target, as they expect strong long-term growth from Aldurazyme and Naglazyme and is optimistic for Kuvan approval and a strong market launch.
ThinkEquity is positive on Double-Take's (NASDAQ: DBTK) impressive operating leverage and valuation and started shares off with a Buy rating and $28 target.
Needham initiated Leapfrog Enterprises (NYSE: LF) with a Strong Buy rating and $11 target. The firm expects Leapfrog to benefit from its turnaround initiatives in 2008 and for shares to be driven by improving sales and profits.
BorgWarner (NYSE: BWA) to give business update at 10am.
Burger King (NYSE: BKC) to report Q1 earnings; conference call at 10am.
Tuesday, November 6
Merrill Lynch to host conference call discussing Focus Media's (NASDAQ: FMCN) secondary offering at 11am.
Yahoo (NASDAQ: YHOO) CEO Jerry Yang, Senior VP Michael Callahan & General Counsel to testify before the House Foreign Affairs Committee on how their company gave false information to Congress relating to their role in a human rights case in China which resulted in a journalist being sent to jail for 10 years.
Shares of the company have moved 1.4% higher in after hours trading as a result of the company showing earnings of 88 cents per share, a penny above the 87 cents a share that Wall Street was expecting. Total net income in the quarter was $83.1 million, up from $65.7 million during the same period last year.
Equity Inns (NYSE: ENN) was cut to Sell from Hold at AG Edwards after the Whitehall acquisition. JMP Securities and Friedman Billings cut shares to Market Perform from Outperform and KeyBanc downgraded Equity Inns to Hold from Buy.
Matrix USA downgraded Talbots (NYSE: TLB) to Sell from Hold based on the eroding return of capital because of the company using capital to acquire and open new stores. Friedman Billings downgraded shares of
Starbucks (NASDAQ: SBUX) to Market Perform from Outperform and removed the company from their FBR Top Picks list on expectations that 2H07 same-store sales will no longer improve, removing a catalyst...
Perhaps the most challenging retail business model of all is the one that attempts to satisfy the fashion desires of the twenty-something crowd. One of the more successful practitioners of the art is headquartered in Los Angeles.
Guess? Inc. (NYSE: GES) designs, markets, distributes and licenses an upscale collection of contemporary apparel, accessories and related consumer products. The company operates 336 retail stores in the United States and Canada and also distributes its products through department and specialty stores around the world. Competitors include Gap Inc. (NYSE: GPS) and Abercrombie & Fitch (NYSE: ANF).
The firm surprised investors last week, when it reported Q1 EPS of 38 cents and revenues of $377.9 million. Analysts had been looking for 29 cents and $331.6 million. It was the fifteenth consecutive quarter of earnings growth for the company. Management also guided Q2 EPS to 31-33 cents (27 cent consensus), Q2 revenues to $335-$345 million ($308.47M consensus), FY08 EPS to $1.75-$1.80 ($1.71 consensus) and FY08 revenues to $1.51-$1.56 billion ($1.49B consensus). Along with "buy" recommendations from Deutsche Securities and Brean Murray, the news popped the shares out of a May "cup" into the June "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle".
Altogether, brokers recommend the issue with six "strong buys", six "buys" and one "hold". Recent price targets are in the $57-$59 range. Analysts expect a 22 percent average annual growth rate, through the next five years. The GES P/E ratio (22.21), Sales Growth rate (42.25%) and EPS Growth rate (65.22%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 66 percent of the outstanding shares. Over the past fifty-two weeks, the stock has traded between $19.29 and $51.15. A stop-loss of $42.70 looks good here.
Lowe's Companies Inc (NYSE: LOW) to report Q1 earnings; conference call at 9am. Lowe's is expected to post sub-par revenue results and an EPS decline, given the continued sluggishness in U.S. housing sector.
PDUFA date for Shire plc's (NASDAQ: SHPGY) SPD-465 for ADHD in adults.
Tuesday May 22
Staples Inc (NASDAQ: SPLS) to report Q2 earnings; conference call at 8am.
Men's Wearhouse Inc (NYSE: MW) to hold conference to at 5pm discuss Q1 earnings, detail its acquisition of After Hours and discuss the impact on 2007 guidance.
The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings.
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The Columbus Children's Hospital in Ohio is under fire 
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This afternoon after the market closed, retailer 
been looking for 29 cents and $331.6 million. It was the fifteenth consecutive quarter of earnings growth for the company. Management also guided Q2 EPS to 31-33 cents (27 cent consensus), Q2 revenues to $335-$345 million ($308.47M consensus), FY08 EPS to $1.75-$1.80 ($1.71 consensus) and FY08 revenues to $1.51-$1.56 billion ($1.49B consensus). Along with "buy" recommendations from Deutsche Securities and Brean Murray, the news popped the shares out of a May "cup" into the June "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle"..gif){kind=logo}
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