June's AI-picked stock updates now live. See what's new in Tech Titans, up 28.5% year to date.Unlock Stocks

3 Stocks To Watch This Week: KORS, CBRL, AMBA

Published 06/01/2016, 12:14 AM
Updated 07/09/2023, 06:31 AM
TIF
-
JWN
-
M
-
CBRL
-
VRA
-
CPRI
-
LULU
-
AMBA
-
GPRO
-

Wednesday, June 1

Thursday, June 2

Michael Kors (NYSE:KORS)

Consumer Discretionary - Textiles, Apparel & Luxury Goods | Reports June 1, before the open.

The Estimize consensus on KORS is calling for earnings of 98 cents per share on $1.153 billion in revenue, 2 cents higher than Wall Street on the bottom line and right in line on the top. Since the holiday season earnings estimates have fallen 3% while revenue has dropped only 1%. Year-over-year comparisons are now projecting a 9% increase in profitability with sales anticipated to grow 11%. KORS has a history of beating the consensus, surpassing bottom-line expectations 81% of the time and revenues 88% of the time

KORS Historical EPS

What to watch: This year, many upscale apparel and accessories brands have been worse off as consumers opt for discounted goods and services. This season we have already seen losses from luxury retailers including Nordstrom (NYSE:JWN) and Tiffany’s (NYSE:TIF), setting the stage for weakness from Michael Kors, Vera Bradley (NASDAQ:VRA), and lululemon (NASDAQ:LULU) over the next week.

In an effort to drive top line growth, Michael Kors has focused on opening new stores. Last quarter the company opened 34 new stores, 15 in the United States and the rest in international markets. While the new stores will increase operating costs and contract margins, they should help generate higher revenue in the near term. Global stores should continue to see adverse impacts from weak currency conditions.

Regardless, Michael Kors continues to deliver positive growth in key financial metrics including revenue, net sales, profits and net income. Unfortunately, another setback will be the fact that Nordstrom has decided to no longer carry Michael Kors handbags. Nordstrom has been feeling squeezed by Macy’s (NYSE:M) and other mid-priced department stores to price match and discount similar Kors bags. The ongoing promotions Macy’s had been running was a major determinant for Nordstrom to stop carrying the bags. This clearly isn’t a good thing for Michael Kors, which should expect to feel the aftermath for the remainder of the year.

Cracker Barrel (NASDAQ:CBRL)

Consumer Discretionary - Hotels, Restaurants & Leisure | Reports June 1, before the open.

The Estimize consensus on CBRL is calling for earnings per share of $1.81, one cent higher than Wall Street. Revenue expectations of $705.1 million are just slightly ahead of the sell-side’s $703.95 million. Estimates on both the top and bottom-line have stayed flat since the Q4 2015 report, with EPS now expected to grow 22% YoY and revenues by 3%. expectations increased 92% and revenues 8%.

CBRL Historical EPS

What to Watch: Despite a lackluster FQ2, Cracker Barrel has benefited from the resurgence in the casual dining space. The stock is up nearly 19% in the past 6 months and is poised to jump following its report.

Cracker Barrel has seen increasing interest in its brand despite not having made any major changes. The company continues to deliver positive comparable store sales on core values and offerings of the past 50 years. Recent results have also continued to outperform peers in the casual dining industry and even its own expectations.

In its Q2 analyst call, the company raised its fiscal year earnings for the second half of 2016 to reflect moderation in commodity prices and the opening of 5 to 6 new stores. Cracker Barrel also recently announced it will transition to cage free eggs in its commitment to provide high quality products. The company plans to source 100% of its eggs from cage free hens by 2026. The shift also feeds changing consumer preferences for healthy and organic ingredients.

Ambarella (NASDAQ:AMBA)

Information Technology - Semiconductors | Reports June 2, after the close.

The Estimize community consensus on AMBA calls for EPS of $0.33, 6 cents above Wall Street. Revenue expectations from Estimize are also higher at $57.11 million as compared to the Street’s $55.94 million. Estimates have come down over the last 3 months, with EPS expected to decrease 54%, and sales down 19% YoY.

AMBA Historical EPS

What to Watch: The GoPro (NASDAQ:GPRO) chipmaker has had a great run since IPOing in 2014, beating the Estimize EPS consensus in all 7 quarters despite the struggles of its biggest client. However, those results started to crack last quarter, with the expectation that negative earnings growth will continue in FQ1 2017.

GoPro reported earlier in the season and severely missed on the bottom line, reporting a loss per share of -$0.63, a YoY decline in profits of 363%, with revenues declining 49%. Shares of AMBA have been in a downward spiral as well. After reaching highs of $126.70 in June 2015, shares of Ambarella have plummeted 68% in the past 12 months. Fortunately, the semiconductor manufacturer is attempting to diversify its top line away from action cameras and drones and into less volatile products.

Original post

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.