The Week: Inflation Data and Retail Earnings

123jump.com Staff
14 Aug, 2005
New York City

Several economic indicators including CPI, PPI, housing starts and capacity utilization are to be released by the government this week. On earnings front, Limited Brands, Home Depot, Nordstrom, Abercrombie & Fitch, TJX, Foot Locker are few of the large retailers and Hewlett Packard, Gateway, Brocade, Sonic Solutions are few of the tech companies to release earnings.

The government is set to release several economic indictors this week including the index for inflation, housing starts and building permits, producer’s price index, capacity utilization and weekly unemployment level.

The index in the last six months has shown low inflation as measured by the Consumer Price Index. The CPI for July, ex food and energy cost, is likely to be at or below 0.2% following 0.1% rise in June.

Higher food and energy prices are passed on to consumer by gasoline and groceries stores but manufactured goods are still discounted. The computers, electronics and automobiles are still selling at or below prices registered last year. Commodities including oil, copper, iron ore and coal are trading near all-time high.

July prices paid to producers for finished goods is likely to jump 0.5% and prices paid to factories and farmers is likely to be 0.1% higher after declining 0.1% in June according to Bloomberg Survey.

Despite Fed’s raising short-term interest rates for the 10th time in less than 30 months the long-term mortgage rates are at the same level when the Fed began raising interest rates. Housing starts to be released this week on Tuesday is to reflect higher activity at more than 2 million units.

On earnings front retailers and tech companies are to dominate the schedule. The several discounters, teenage retailers and luxury retailers are scheduled to show higher earnings than a year ago.


TECH COMPANIES

Hewlett Packard leading technology company is expected to report earnings at the close of market on Tuesday. The analysts estimate 31 cents vs. 24 cents a year ago on revenue of $20.5 billion. The company stock has delivered 20% in the last three months.

Gateway Inc, Personal Computer maker is expected to release earnings this Monday after the close. The 2Q earnings are estimated at 2 cents vs. loss of 13 cents a year ago on revenue of $895 million.

JDS Uniphase, fiber optic technology vendor is expected to deliver 2 cents loss vs. loss of one penny a year ago on revenue of $167 million. The company’s stock has gained 10% in the last three months and lost 50% in the last twelve months.

Brocade Communication, data storage networking manufacturer, is expected to earn a cent vs. 6 cents profit a year ago on revenue of $121 million. The stock has lost 18% in the last twelve months and been flat in the last three months.

The Sonic Solutions Inc is expected to release earnings after the close on Monday. The 2Q earning is estimated at 14 cents vs. 16 cents a year ago on revenue of 33 million. The company of $440 million market cap share has jumped 13% in the last three months.


RETAILERS

Several retailers are scheduled to release earnings on Tuesday. Staples, Home Depot, American Eagle Outfitters, TJX, Abercrombie & Fitch, Books-A-Million and Nordstrom.

Women’s apparel retailer Limited Brands is set to report earnings on Thursday before the opening. Analysts are looking for the company to earn 24 cents vs. 29 cents a year ago on revenue of $2.24 billion. The $10 billion market company stock has jumped 20% in the last three months and 32% in the last one year.

American Eagle Outfitters is scheduled to release its earnings on Tuesday morning before the bell. The analysts are looking the teen-age retailer to report 36 cents vs. 22 cents a year ago on revenue of 508 million. The stock has jumped 16% in the last three months.

The office supplies retailer Staples Inc earnings are estimated at 19 cents vs. 16 cents a year ago on revenue of $3.45 billion. The $16 billion market company’s stock has gained 9% in the last three months of trading.

Home Depot, home improvement retailer with 1,900 stores, is expected to release earnings on Tuesday before the bell. The company is estimated to release earnings of 79 cents vs. 70 cents a year ago on revenue of $22.04 billion. The last three months’ stock performance is 19% gain.

After the close on Tuesday, the luxury retailer Nordstrom is expected to report 48 cents vs. 38 cents a share earning a year ago on revenue of $2.05 billion. The 183 store retailer under various names is estimated to earn $1.86 for the full year. The stock in the last three months has jumped 22% and 60% in the last twelve months.

Big Lot a discount retailer is estimated to report loss of 11 cents vs. 6 cents a year ago on revenue of $1.05 billion. The company share has jumped 14% in the last three months during which oil prices have jumped 40% curtailing purchasing power of its core customer base.

The 443 store fabric retailer Hancock Fabric is set to report earnings on Tuesday the Aug. 16th after the close. Analysts expect the company to lose 27 cents vs. loss of 16 cents a year ago on revenue of $85.53 million. The $121 million market cap company stock has lost 9% in the last three months. July same-store sales fell by 7.9%.

Women’s apparel retailer Talbots is scheduled to report earning on Wednesday 34 cents on revenue of $443 million vs. 34 cents a year ago. The 1,054 store chain has experienced same store chain sales growth of 11.3% in July.

TJX Companies, the apparel retailer is estimated to earn 26 cents on revenue of $3.7 billion vs. 23 cents a year ago. The company stock for last three months has been flat.

The teenage apparel retailer Abercrombie & Fitch is expected to earn 69 cents vs. 44 cents a year ago on revenue of $559 million. The company recently has recorded one of the highest same-store sales in the industry on the latest denim craze. The company stock has gained 15% in the last three months.

OTHER NOTABLE COMPANIES

The Valspar Corp, the specialty paint manufacturer, second quarter earnings is estimated at 89 cents on revenue of $730 million. The $2.5 billion market company has witnessed its stock price jumped 20% in the last 70 days.

Sysco Corp’ 2Q earnings are estimated at 45 cents on revenue of $8.14 billion. The $21 billion food services company’s shares have declined 7% in the last three months.

Estee Lauder is set to report earning of 41 cents on revenue of $1.52 billion on Tuesday morning. The $8.4 billion market company’s stock has been flat in the last three months.