WEEK AHEAD: Retailers to Report Fourth-Quarter Earnings
02/22/2013| 03:11pm US/Eastern
By Debbie Cai
Quarterly results from a slew of big retailers are expected next week, including reports from consumer-electronics chain Best Buy Co. (>> Best Buy Co., Inc.) and department-store chains Macy's Inc. (M) and J.C. Penney Co. (>> J.C. Penney Company, Inc.).
Additionally, auto makers are scheduled to report February sales results Friday, with the major three U.S. auto makers projected to post sales gains. Fresh data on home prices, durable goods and gross domestic product are also set to be released next week. No initial public offerings are expected to price in the coming week.
Quarterly Earnings Due From Retailers Best Buy, Target, Gap
The world's largest consumer-electronics chain Best Buy prepares to report fourth-quarter earnings Thursday as its founder Richard Schulze continues working to secure financing to take the struggling company private.
Mr. Schulze reportedly is considering whether to scrap the takeover plan and instead get investors to take a minority stake in the company.
Most recently, Best Buy said it is reviving a price-match policy, previously implemented for the holidays, that includes online competitors--in order to disrupt showrooming. The company wouldn't make the promotion permanent if it didn't work then, which bodes well for fourth-quarter results.
Fellow Minneapolis-based retailer Target Corp. (>> Target Corporation), which is set to report earnings Wednesday, last month made a similar move to keep customers from looking for cheaper prices online when in the store. Target is expected to report higher profits.
Apparel-retailer Gap Inc. (>> The Gap Inc.) also is expected to post its fourth-straight quarter of year-over-year earnings growth next Thursday, thanks to recent climbing sales figures.
Department-Store Chains to Report Amid Court Battle
Department-store rivals Macy's and J.C. Penney clashing in New York State court this week sets an interesting backdrop for their respective earnings reports next Tuesday and Wednesday.
The companies are sparring over their relationships with homemaking maven Martha Stewart, particularly the right to sell particular homemaking items.
Macy's is forecast to post stronger profits and had reinstated its earlier fourth-quarter earnings projection after lowering it when reporting strong December same-store sales. Analysts meanwhile project J.C. Penney, which is in the midst of a sweeping transformation to make it more competitive with rivals, to swing to a loss for the quarter.
Home Depot, Lowe's to Report
Home improvement rivals Home Depot Inc. (>> The Home Depot, Inc.) and Lowe's Cos. (>> Lowe's Companies, Inc.) are slated to report earnings Tuesday and Monday, respectively, amid signs of strengthening in the housing market. Analysts are mixed on how the stocks could perform. Stifel Nicolaus feels the acceleration will level off as both face tougher sales comparisons to last winter, when historically mild winter extended spring selling; while Oppenheimer said the duo are "well-positioned to capitalize upon improving demand trends."
Home Depot is expected to post stronger profits while Lowe's profits are projected to fall.
Auto Makers' Sales Likely Increased in February
The auto industry is scheduled to report its February U.S. sales on Friday. Online automotive-information provider Edmunds.com estimated that new U.S. auto sales will rise 4.3% in February from the year-ago period, with Ford Motor Co. (F) expected to post the biggest year-over-year jump. Chrysler Group LLC and General Motors Co. (>> General Motors Company) also are projected to report sales gains.
Edmunds estimates 1.2 million new cars were sold in February, a 15% increase from January. The site also projected a seasonally adjusted annual rate of 15.5 million light vehicle units for the month. February had 24 sales days, while the year-earlier month had 25.
A River of Data, and Bernanke Testifies
Next week's calendar will bring a river of data from home prices to durable goods to another look at that contraction in fourth-quarter real gross domestic product. As the data stream out, investors and economy-watchers also will make time to listen to the semiannual testimony to Congress given by Federal Reserve Chairman Ben Bernanke on Tuesday and Wednesday.
Two home price measures, the S&P/Case-Shiller price index and the Federal Housing Finance Agency's national home-price index, will be reported Tuesday. Both are expected to show further gains in home values.
Wednesday will bring the latest durable-goods report. Economists expect new orders fell 5.3% in January. But that expected drop is concentrated in aircraft and follows a 4.3% jump in December.
A second look at GDP growth is scheduled to be released Thursday and should show the U.S. economy grew last quarter, if only slightly. A smaller trade deficit and somewhat better consumer spending will account for much of the upward revision.
Also on tap next week will be two readings on how consumers feel about the economy in February. Both readings are expected to be up from January, despite higher gasoline prices and the uncertainty surrounding fiscal policy.
Hostess to Hold First Bankruptcy Auction
Hostess Brands Inc. will send its first group of brands, including Wonder Bread, to the auction block next week as part of its bankruptcy liquidation.
Flowers Foods Inc. (>> Flowers Foods, Inc.), which makes Tastykake snacks and Nature's Own bread, is set to lead off the bidding for the Hostess assets. The Thomasville, Ga., company is offering up to $360 million for five Hostess bread brands, including Wonder Bread and Nature's Pride, as well as 20 plants and 38 depots. In a separate bid, Flowers Foods has offered $30 million for Hostess's Beefsteak rye bread brand.
Separately, School Specialty Inc. (>> School Specialty, Inc.) next week will seek final approval of financing to keep it operating in Chapter 11, although some creditors are floating a rival loan.
--Kathleen Madigan and Jacqueline Palank contributed to this article.
Write to Debbie Cai at email@example.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
Stocks mentioned in the article : Best Buy Co., Inc.
, Lowe's Companies, Inc.
, School Specialty, Inc.
, Target Corporation
, J.C. Penney Company, Inc.
, The Home Depot, Inc.
, Flowers Foods, Inc.
, General Motors Company
, The Gap Inc.