For Immediate Release
Chicago, IL – May 15, 2017 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes J.C. Penney (NYSE: JCP – Free Report ), Macy’s (NYSE: M – Free Report ), Wal-Mart (NYSE: WMT – Free Report ), Target (NYSE: TGT – Free Report ) and Home Depot (NYSE:HD) (NYSE: HD – Free Report ).
To see more earnings analysis, visithttps://at.zacks.com/?id=3207.
Every day, Zacks.com makes their Bull Stock of the Day available, free of charge. To see it, click here .
Retail Sector's Disappointing Earnings Results
The earnings focus lately has been on the Retail sector, withJ.C. Penney (NYSE: JCP – Free Report ) becoming the latest department store to follow the lead set byMacy’s (NYSE: M – Free Report ) and others. These reports reconfirm what we have known for a while – that these operators needed literally to reinvent their businesses to effectively operate in an environment where consumers are steadily shifting their spending dollars to the online medium instead of visiting the physical store.
Macy’s results were particularly disappointing as it not only came out with a bigger than expected decline in same-store sales but also missed consensus EPS and revenue estimates. Kohl’s did better with respect to EPS and revenue results, on the back of disciplined inventory management and help from the inclusion of Under Armour merchandise, but same-store sales missed the mark at Kohl’s as well. The others are in the same boat. The core problem for these operators remains the steadily falling foot traffic as a result of sales moving to the online channel, which is making the group’s excessive store capacity ever more problematic.
Retail Sector Scorecard
As of Friday, May 12th, we now have Q1 results from 24 of the 42 retailers in the S&P 500 index. Total earnings for these 24 retailers are up +2.2% from the same period last year on +4.6% higher revenues, with 58.3% beating EPS estimates and 54.2% beating revenue estimates.
Please note that we have a stand-alone Retail sector, unlike the official Standard & Poor’s placement of this space in the Consumer Discretionary sector. The Zacks Retail sector includes, besides the traditional department stores and other brick-and-mortar retailers, the online vendors like Amazon (NASDAQ:AMZN) and Priceline and restaurant operators. Most of the 24 Zacks Retail sector companies that have reported Q1 results already at this stage are online vendors and restaurant players, with the traditional retail operators starting the reporting process with Thursday’s Macy’s disappointment that was maintained by Nordstrom (NYSE:JWN) after the market’s close on Thursday and JC Penney Friday morning.
The aggregate results from the 24 retailers that have reported Q1 results already are tracking below what we had seen from the same companies in other recent periods. This is despite the +41.1% growth in Amazon’s earnings on +22.6% higher revenues. On an ex-Amazon basis, the sector’s Q1 earnings growth would be modestly in the negative.
We will get Retail’s complete picture following this week’s results fromWal-Mart (NYSE: WMT – Free Report ), Target (NYSE: TGT – Free Report ) and Home Depot (NYSE: HD – Free Report ), but the sector’s Q1 results thus far are notably weak in an otherwise strong earnings season. Please note that the proportion of Retail sector companies beating EPS estimates (58.3%) is the second lowest in the entire S&P 500 index, while the proportion of revenue surprises (54.2%) is the fourth lowest of all 16 Zacks sectors.
Q1 Earnings Scorecard
As of Friday, May 12th, we have Q1 results from 454 S&P 500 members that combined account for 92.5% of the index’s total market capitalization. Total earnings for these companies are up +13.9% from the same period last year on +7.9% higher revenues, with 72.2% beating EPS estimates and 66.1% beating revenue estimates. The proportion of companies beating both EPS and revenue estimates is 51.8%.
Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Click to subscribe to this free newsletter today .
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros .
Get the full Report on M - FREE
Get the full Report on JCP - FREE
Get the full Report on WMT - FREE
Get the full Report on TGT - FREE
Get the full Report on HD - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook (NASDAQ:FB): https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer .
This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
J.C. Penney Company, Inc. Holding Company (JCP): Free Stock Analysis Report
Macy's Inc (NYSE:M): Free Stock Analysis Report
Wal-Mart Stores, Inc. (NYSE:WMT): Free Stock Analysis Report
Target Corporation (NYSE:TGT): Free Stock Analysis Report
Home Depot, Inc. (The) (HD): Free Stock Analysis Report
Original post
Zacks Investment Research