Preview: Next Week's Retail Earnings Bonanza
Next week is the biggest one of the earnings season for the retailers. While each will have different nuances, and wrap up the key holiday quarter, Wall Street will be focused on the sales forecast for the current quarter.
Many retailers have already released holiday sales. While most weren't terrible, they weren't stellar either. A survey conducted by Thomson Reuters estimates the 78 retailers it follows will report fourth-quarter same-store sales that will grow an average 1.7 percent year-over-year. For the fiscal fourth quarter of 2011, retailers posted a 2.8 percent gain year-over-year.
(Read more: Strike Three! The American Consumer Is Out)
But sales are only part of the picture. Since management commentary has suggested sales were sluggish after Black Friday until Christmas week, investors have been anxious to learn about the resulting profitability, and how promotions have impacted margins.
Wall Street was bracing for a bad quarter from Wal-Mart after reports of leaked emails between executives discussing a "disastrous" February for U.S. Sales. The world's largest retailer reported fourth-quarter earnings that weren't great, but it wasn't "disastrous" either.
Some analysts think low expectations are baked in for the retailers and could provide some protection against shares selling off in the wake of earnings reports. That was the case with Wal-Mart. The company's comments and its results showed consumers are facing economic pressures and Wal-Mart's guidance reflects this. (Read more: Wal-Mart Tops Estimates, but Guidance Is Weak)
Right now, the big question is: will all retailers will provide similar commentary?
Discounters Target, Dollar Tree and TJX all report fourth-quarter earnings on Wednesday. The market will want to know if each management team expects its consumers to face the same economic pressures Wal-Mart detailed in its earnings release.
During the financial crisis, dollar stores like Dollar Tree, did take some market share from behemoth Wal-Mart. While some higher-income consumers did trade down and shop at discounters during the financial crisis, most don't expect that to occur in the current environment of higher payroll taxes and increasing gas prices. But bullish investors will want reassurance that the core consumer is still buying.
Off-price retailer TJX has reported some of the strongest, and most consistent same-store sales of the past year. If TJX issues guidance that deviates at all, shares would likely take a hit.
Home Improvement retailers Lowe's and Dow component Home Depot report before the bell on Monday and Tuesday, respectively. While many industry watchers don't consider these names traditional holiday retailers, Home Depot boosts that it's the largest retailer of fresh-cut Christmas trees in the country.
According to Google, shopping-related phrases containing Home Depot and Lowe's were among the most searched over the Black Friday weekend. Investors will want to know if the interest translated into sales and subsequent profits.
Going forward, Wall Street is interested in the home improvement retailers' outlook, many are watching how the home improvement retailers play into the housing market recovery.
Four of the major department stores will report throughout the week. Macy's kicks it off on Monday before the bell followed by J. C. Penney on Wednesday after the bell, then Sears and Kohl's on Thursday before the bell. Of the group, Wall Street has crowned Macy's the holiday season winner though J. C. Penney remains one of the most-followed retailers as it continues to struggle through its transformation.
Analysts are expecting another awful quarter for same-store sales from J.C. Penney, estimating a 26.9 percent decrease year-over-year. But as with all the retailers, the most important details of the earnings releases and management commentary is the future guidance. While J. C. Penney has shied away from issuing guidance, the commentary from CEO Ron Johnson will be closely followed for his overall expectation as the company enters its second year of its four-year turnaround plan. Analysts will also look to see how much cash the company has on its balance sheet after going into the second transformation.
Consumer electronics retailer Best Buy reports its earnings on Thursday, which also is reportedly the last day former CEO and Chairman Richard Schulze has to make a bid for the company he founded. With recent sales stronger than expected and shares up 44 percent year-to-date, taking Best Buy private may prove more expensive than originally expected.
(Read more: Best Buy: Wall Street's Changing Opinion)
The big box retailer is deploying various new strategies to turn the company around and combat "showrooming," including honoring online-price matching all the time. Still, Wall Street analysts are expecting same store-sales to fall 1 percent during the fourth quarter.
|EPS||REVENUE||SAME STORE SALES|
|Lowe's Q4||$0.23||$10.83 billion||0.7%|
|Home Depot Q4||$0.64||$17.67 billion||4.0%|
|Macy's Q4||$1.99||$9.30 billion||3.4%|
|Saks Q4||$0.15||$963 million||0.0%|
|Dollar Tree Q4||$ 0.99||$2.23 billion||2.0%|
|Target Q4||$1.48||$22.67 billion||0.8%|
|TJX Q4||$0.81||$7.65 billion||3.9%|
|Limited Q4||$1.74||$3.76 billion||3.6%|
|JCPenney Q4||$(0.14)||$4.10 billion||(26.9%)|
|Best Buy Q4||$1.53||$16.32 billion||(1.0%)|
|Kohl's Q4||$1.63||$6.23 billion||0.6%|
|Sears Q4||$0.98||$11.77 billion||no estimates|
-By CNBC's Courtney Reagan; Follow her on Twitter @CourtReagan
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