U.S. EQUITIES WEEK AHEAD: Retail Earnings, Factory Reports
08/10/2012| 03:56pm US/Eastern
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By Nathalie Tadena
Several major U.S. retailers are due to report their latest quarterly results next week, including the world's biggest retailer, Wal-Mart Stores Inc. (>> Wal-Mart Stores, Inc.), as the sector contends with waning consumer confidence and global economic woes.
Meanwhile, monocrystalline sand producer Hi-Crush Partners LP is expected to go public next week, the only initial public offering scheduled for the week.
Markets also will examine factory reports from two regional Federal Reserve district banks on Wednesday and Thursday for timely readings of the economy.
Wal-Mart, Other Retailers to Report Quarterly Earnings
Earnings from the retail sector will continue next week, with results due from Wal-Mart, Abercrombie & Fitch Co. (>> Abercrombie & Fitch Co.), Aeropostale Inc. (>> Aeropostale, Inc.), Gap Inc. (>> The Gap Inc.), Saks Inc. (>> Saks Inc), Sears Holdings Corp. (>> Sears Holdings Corporation) and Target Corp. (>> Target Corporation), among others.
Analysts polled by Thomson Reuters expect retail giant Wal-Mart to post another quarter of stronger earnings. Same-store sales in the company's key U.S. stores have improved in the prior three quarters. However, Wal-Mart's recent gains come as its core lower-income customers are grappling with high gasoline prices and a still-soft jobs market that have moved many consumers to keep a tight watch on spending.
In the teen retail space, Abercrombie, normally an edgy bellwether for the group, earlier this month projected very soft second-quarter and full-year earnings, while smaller rival Aeropostale lowered its guidance for the quarter. Both companies were hurt by fashion misses, and inventory backup and slow sales led to heavy discounting at Abercombie.
Hi-Crush Partners to Begin Trading Next Week
Monocrystalline sand producer Hi-Crush Partners LP is expected to go public next week, with units scheduled to price Wednesday.
The company has said it expects to offer 11.3 million common units between $19 and $21 each in its IPO, which was first filed in July.
Hi-Crush's reserves consist of sand primarily from Wisconsin--where it is based--and other parts of the upper Midwest U.S. region. It said the demand for its sand, which is used as a "proppant" to enhance recovery rates of hydrocarbons, increased at an annual rate of 28% from 2006 to 2011.
The company plans to list its units on the New York Stock Exchange under the symbol HCLP.
Early Look at August Activity on Tap
A full calendar next week will cover U.S. reports on home-building, shopping, manufacturing, inflation and consumer sentiment. The most important of these are likely to be reports that give early glimpses at August activity.
Leading that charge will be the factory reports from two regional Federal Reserve district banks. Because the surveys done by various Fed banks cover the concurrent month, financial markets pay attention to them for a timely read on the economy.
On Wednesday, the New York Fed will release its Empire State Survey. The median forecast of economists surveyed by Dow Jones Newswires is that the top-line business conditions index will weaken to 6.0 this month from 7.39 in July. Economists expect some improvement in the Philadelphia Fed manufacturing survey, scheduled for Thursday, but the expected reading will still indicate a sector in recession. The general business activity index is projected to rise to -4.5 this month.
Meanwhile, the National Association of Home Builders' housing-market index is projected to pull back to 34 for August after jumping to 35 in July, the best reading since March 2007.
The two major July reports on inflation--the producer-price index and the consumer-price index, are also on tap next week, but neither is expected to show a flare-up in price pressures.
Conferences
Among the significant conferences next week are EnerCom Inc.'s The Oil & Gas Conference Sunday through Saturday in Denver; J.P. Morgan's Auto Conference on Monday and Tuesday in New York; Canaccord Genuity's Global Growth Conference Tuesday through Thursday in Boston; and Oppenheimer Holdings Inc.'s Technology, Internet & Communications Conference Tuesday and Wednesday in Boston.
-Kathleen Madigan and Dow Jones Newswires staff contributed to this article.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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