Next week is a busy one for retailers, as Wal-Mart Stores Inc. (NYSE: WMT), Macy's Inc. (NYSE: M), Nordstrom Inc. (NYSE: JWN) and Kohl's Corporation (NYSE: KSS) all report quarterly earnings.
This week, luxury retailer Michael Kors Holdings Ltd. (NYSE: KORS) issued a fiscal first-quarter profit that blew past Wall Street estimates, while teen retailer American Eagle Outfitters (NYSE:AEO) cut its outlook for the second quarter in half to 10 cents a share, from 21 cents a share expected by analysts.
“There are probably less part-time jobs, summer jobs for teens, where kids can go out and spend discretionary money on clothes and non-essential items that they would be buying normally at these stores, whereas they might be doing better for back-to-school,” said Jason Weisberg of Seaport Securities from the floor of the New York Stock Exchange.
“The Michael Kors and other high-end retailers are probably dealing with customers that have more discretionary income to spend, and that’s why you see the discrepancy between teen retailers and the higher-end retailers,” he added.
Before the bell on Wednesday, Wall Street expects department store chain Macy's to report second-quarter earnings of 79 cents per share on revenue of $6.28 billion, compared with year-ago earnings of 67 cents per share on revenue of $6.12 billion, according to analysts polled by Reuters.
Shares of Macy’s closed Friday’s session up 0.60 percent to $48.52.
On Thursday, Wal-Mart, Nordstrom and Kohl's report results.
“I would expect probably a relatively uneventful number from Wal-Mart, but I would really point to their guidance,” said Weisberg. “I want to see what they expect for back to school, and they might even throw a little holiday sales in there. That’s probably the number we should focus on.”
The world’s largest retailer, Wal-Mart is forecast to report second-quarter earnings of $1.25 per share on revenue of $118.74 billion, compared with earnings of $1.18 per share on revenue of $114.30 billion in the year-ago quarter.
Wal-Mart Stores Inc. closed down 0.45 percent on Friday to $76.90 per share.
So far during the second-quarter earnings season, global companies such as Apple Inc. (Nasdaq: AAPL), Caterpillar Inc. (NYSE: CAT) and Ford Motor Company (NYSE: F) have seen less demand and growth in China and Europe.
“If things seem to be more stable in China that we’ve been led to believe, I think that as far as retailers next week go, sales numbers that are really driven from the mainstream retailers like Wal-Mart, for example, the bulk of those sales are derived from this country and I think that regardless on what’s going on in Europe and regardless on what’s going on in China, I think those numbers will be impacted very minimally as far as Q3 and Q4,” Weisberg said.
Kohl's is estimated to report second quarter earnings of $1.06 per share on revenue of $4.31 billion, compared with earnings of $1.00 per share on revenue of $4.21 billion in the year-ago period.
Department store Kohl's Corporation closed down 0.65 percent to $50.69 a share on Friday.
After the bell Thursday, Nordstrom is expected to report second-quarter earnings of 88 cents a share on revenue of $3.30 billion, compared with earnings of 75 cents a share on revenue of $3.01 billion a year-ago.
Shares of Nordstrom Inc. on Friday fell 1.36 percent to $58.79.
Also next week on the economic calendar, U.S. retail sales figures for July are reported. Consumer spending accounts for about two-thirds of U.S. gross domestic product, and economists will be keeping a close eye on the report to gauge consumer spending trends, along with corporate retail earnings.
On Friday, the Dow Jones Industrial Average dropped 72.81 points, or 0.47 percent, to close at 15,425.51. The S&P 500 Index fell 6.67 points, or 0.36 percent, to finish at 1,691.42. The Nasdaq Composite Index was down 9.02 points, or 0.25 percent, to end at 3,660.11.