Skip to main content

Retailers Are Top Stocks to Watch Today as WMT, JCP, and More Follow Macy's Miss By Diane Alter

A bad year to date for retailers doesn't appear to be getting any better. Macy's Inc. (NYSE: M) stock swooned 5% to $56 Wednesday after reporting Q2 earnings shy of estimates and trimming its sales outlook for the full year. The post Retailers Are Top Stocks to Watch Today as WMT, JCP, and More Follow Macy's Miss appeared first on Money Morning - Only the News You Can Profit From .

Stocks to watch, August 14, 2014: A bad year to date for retailers doesn't appear to be getting any better.

Top Stocks to WatchMacy's Inc. (NYSE: M) stock slumped 5.51% to $56.47 Wednesday after reporting Q2 earnings shy of estimates and trimming its sales outlook for the full year.

The mid-range to upscale chain of department stores posted Q2 earnings per share (EPS) of $0.80. While an 11% increase year over year (YOY), the number handily missed EPS expectations of $0.86.

Q2 sales totaled $6.267 billion, up 3.3% from total sales of $6.066 billion in the same quarter a year ago. Comparable sales, together with comparable sales of departments licensed to third parties, rose 4% YOY.

Macy's operating income totaled $571 million or 9.1% of sales for the quarter, compared with operating income of $534 million or 8.8% of sales for the same period last year.

The Cincinnati-headquartered retailer expects sales for the second half of 2014 to be "on track" with comparable store growth of 2% to 3%. A modestly improved sales trend in Q2 wasn't enough to make up for the company's sales shortfall in the first quarter.

As a result, Macy's now expects a full-year 2014 sales increase of 2% to 2.5%, including the sales results of the stores licensed to third parties. That's down from the company's previous guidance estimates of an increase of 2.5% to 3%.

Chief Executive Officer Terry J. Lundgren said in a statement that "many customers still are not feeling comfortable about spending more in an uncertain economic environment."

Macy's disappointing results, coupled with July's dismal retail sales report, has investors worried about earnings reports from other key retailers on tap to post results Thursday.

Here are four retailers reporting earnings that will be among the key stocks to watch today.

4 Retail Stocks to Watch Today

Stocks to Watch No. 1: Wal-Mart Stores Inc. (NYSE: WMT) reports Q2 numbers before Thursday's open. The discount retailing giant has reported five consecutive quarters of declining same-store sales, a key metric in the retail industry that measure sales at stores open for at least a year. Analysts expect WMT to post EPS of $1.21, down from $1.24 in the same quarter a year ago. Forecasts for the quarter have fallen since April when EPS forecasts were for $1.29. WMT said in May it expected Q2 profit would come in at $1.15 to $1.25 a share, which at the time was below analyst forecasts of $1.28 a share. The company explained profit would be hurt by increased spending in three areas: its online sales efforts, its attempts to boost Sam's Club membership growth, and its costs tied to healthcare. Wal-Mart's second-quarter global sales are expected to show a modest rise to $119.08 billion from $116.9 billion, according to FactSet. Whisper numbers have WMT's EPS coming in at $1.22, a penny ahead of current forecasts. WMT shares are down 6.18% year to date.

Stocks to Watch No. 2: Kohl's Corp. (NYSE: KSS) reports Q2 numbers before Thursday's opening bell. Expectations have the Wisconsin-based department store retailer posting EPS of $1.07. Whisper numbers have EPS coming in at $1.10. Monday, MKM Partners projected Kohl's would post EPS of $1.02, but reiterated its "Buy" rating and $63 price. The firm said that while same-store sale comps likely improved quarter over quarter, store traffic likely contracted. Still, MKM likes Kohl's attractive 2.8% dividend yield and expects the company to generate about $1.1 billion in free cash flow for fiscal year 2014 - a key positive. Shares are down 3.44% year to date.

Stocks to Watch No. 3: JC Penney Co. Inc. (NYSE: JCP) will report Q2 earnings after Thursday's close. Estimates have the struggling value department store chain posting a hefty per share loss of $0.94. That would, however, be a notable YOY improvement when Penney's posted an EPS loss of $2.16 in 2013's Q2. Whisper numbers are more optimistic, with an EPS loss of $0.89. Revenue is forecast to come in at $2.78 billion, up 4% YOY. Key numbers to watch in the report are comparable store sales, gross margins, and available cash and credit. Penney's is still losing lots of money, but its ambitious turnaround plans appears to be making progress. Indeed, online traffic and brick-and-mortar sales have picked up. However, JCP's future remains in doubt. Shares are up 1.75% since the start of the year.

Stocks to Watch No. 4: Nordstrom Inc. (NYSE: JWN) will report Q2 earnings after Thursday's close. The upscale retailer is expected to post EPS of $0.95. Whisper numbers are for EPS of $0.97. The consensus analyst recommendation on Nordstrom is "Buy." Wednesday, Topeka Capital lifted its estimates on Nordstrom through 2016 citing strong store checks, which suggests a robust second half. Topeka has a "Buy" on Nordstrom with a $78 price target. Shares slipped 1.4% intraday Wednesday to $67.69, as Macy's dragged down the majority of retail stocks. Still, Nordstrom shares are up some 10% year to date.

Investors: We're in the midst of a generational bull market, but there will be setbacks along the way. Learn how to protect yourself from market declines, and make more money on the recovery...

Tags: , , , , ,

The post Retailers Are Top Stocks to Watch Today as WMT, JCP, and More Follow Macy's Miss appeared first on Money Morning - Only the News You Can Profit From.

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.