Earnings season may be wrapping up this week, but the last push is going to be an important one. Over the next five days, about 400 companies are reporting earnings, 42 of which are in the S&P 500. Along with the usual small- and mid-cap rush late in the season, plenty of large-cap companies have yet to announce results, especially in restaurants and in retail.
Now I’m still bullish about several retail and consumer-driven stocks—despite the doom and gloom scenarios predicted by the media. So I expect more earnings announcements like what we saw from the big box retailer last week. Just take a lot at what analysts are saying below:
Restaurants
| Ticker | Company | Earnings Date | Forecast Sales | Forecast Earnings | My Take |
| PZZA | Papa John’s | Tuesday | 13.7% | 16.9% | Strong Buy |
| DIN | DineEquity | Wednesday | -33.2% | -9.9% | Buy |
| DPZ | Domino’s | Thursday | 6.1% | 15.4% | Buy |
| BAGL | Einstein Noah Restaurant | Thursday | -3.6% | 5.6% | Buy |
| WEN | Wendy’s | Thursday | 4.9% | 100.0% | Hold |
As you can see, Papa John’s (NASDAQ:PZZA) currently has the strongest prospects (note how its forecast sales growth is over double that of competitor Domino’s (NYSE:DPZ). And while DineEquity (NYSE:DIN) — the owner of International House of Pancakes and Applebee’s International — is headed towards a dip in sales and earnings, I currently have it down at a buy thanks to strong cash flow, return on equity and institutional buying pressure.
On the flipside, Wendy’s (NYSE:WEN) doesn’t make the grade and that’s because its underlying fundamentals are mixed at best.
Retail
| Ticker | Company | Earnings Date | Forecast Sales | Forecast Earnings | My Take |
| HVT | Haverty | Monday | 8.3% | 91.7% | Buy |
| HD | Home Depot | Tuesday | 10.5% | 28.0% | Buy |
| TGT | Target | Wednesday | 6.5% | 3.5% | Buy |
| TJX | TJX | Wednesday | 14.0% | 30.6% | Buy |
| GPS | Gap | Thursday | 8.1% | 61.4% | Buy |
| AZO | AutoZone | Tuesday | 4.2% | 14.7% | Hold |
| RSH | RadioShack | Tuesday | -1.6% | -141.7% | Hold |
| BKS | Barnes & Noble | Thursday | -1.5% | -23.9% | Hold |
| DLTR | Dollar Tree | Wednesday | 14.6% | 23.7% | Sell |
| LTD | Limited Brands | Wednesday | 6.9% | 16.0% | Sell |
| KSS | Kohl’s | Thursday | 3.5% | -9.9% | Sell |
| SHLD | Sears | Thursday | -5.8% | 81.5% | Sell |
| M | Macy’s | Tuesday | 6.6% | 17.1% | Strong Sell |
| JCP | J.C. Penney | Wednesday | -24.5% | -120.3% | Strong Sell |
In the retail arena, we have several promising earnings announcements coming up—I’m personally banking on strong earnings from Home Depot (NYSE:HD), TJX (NYSE:TJX) and Gap (NYSE:GPS).
Meanwhile, I want you to steer clear of Sears (NASDAQ:SHLD), Macy’s (NYSE:M) and J.C. Penney (NYSE:JCP). Lately, department stores have been hard-pressed to grow sales as bargain chains like TJX (NYSE:TJX), TJ Maxx and Marshall’s have been attracting cost-conscious customers by the droves.
If you hold shares in any of the companies above, please keep these facts in mind as we draw closer to their earnings announcements. Tomorrow, I’m going to dig into a sector that has been on the rise while the dollar has fallen: Commodities.
While there are a lot of profit opportunities here, there are also plenty of pitfalls, so please be sure to check back in tomorrow if you have been looking for an effective hedge against the falling dollar.
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