A number of retail stocks announce third-quarter results this week ahead of the post-Thanksgiving shopping frenzy. The recent Consumer Price Index report signaled customers may be more willing to splash cash around this month.
One of the market's busiest weeks for retail stock earnings includes reports from Abercrombie & Fitch, American Eagle Outfitters, Urban Outfitters, Kohl's, Burlington, Dick's Sporting Goods, Nordstromand Lowe's. All report third-quarter financials on Tuesday.
Analysts expect strong results from retail stocks Abercrombie & Fitch and American Eagle driven by holiday season momentum. However, Wall Street is more pessimistic on Kohl's and Dick's Sporting Goods due to slowing traffic trends.
Abercrombie & Fitch stock reached its highest level in more than a decade Friday, after retail stocks Gap and Ross Stores posted better-than-expected earnings and revenue on Thursday. Retail giants Target and Walmart both also topped Q3 predictions.
Meanwhile, the Consumer Price Index (CPI) was flat in October vs. September, signaling inflation may be cooling, although the gauge was still up 3.2% from a year ago, according to last week's report. Both were below expectations, sparking a market rally.
Retail Stocks
Abercrombie & Fitch stock dropped 1.7% to 72.32 Monday during market action. The retail stock has vaulted around 220% in 2023. Meanwhile, AEO stock gained 0.7% to 19.74 and is extended above a buy zone.
Analysts expect Abercrombie & Fitch earnings will balloon 11,700% to $1.18 per share, up from 1 cent per share a year ago. Meanwhile, Wall Street sees revenue growing 4% to $918 million.
For American Eagle, projections have EPS jumping 14% to 48 cents with sales increasing 3% to $1.28 billion. Same-store sales are forecast to increase 1.9% after six straight quarters with comparable-sales declines, according to FactSet.
On the department store side of the industry, Kohl's stock dropped 2.8% to 24.85 Monday. Fellow retail stock Nordstrom gained 0.6% while DKS shares advanced 0.8% Monday.
Wall Street expects Kohl's will see Q3 profit fall 57% to 35 cents per share with revenue declining 1% to $3.99 billion. Same-store sales are expected to decrease 3.8%, continuing a trend dating back to Q4 2022.
Analysts also predict a 40% EPS decline for Nordstrom with comparable-store sales dropping 2.4%. It's a similar story for retail stock Dick's Sporting Goods, with Wall Street expecting EPS to contract 6% to $2.45. DKS revenue is forecast to stay flat vs. 2022.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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