Editor’s Note: This article is regularly updated to bring you relevant, up-to-date information.
Who says earnings season is behind us? Several major corporations are due to issue earnings reports over the coming week, and they could provide an indication of how aggressively the U.S. economy is recovering from the Covid-19 pandemic.
Forthcoming earnings include a major drugstore chain, restaurant operator, package delivery company and a software developer that has become one of the more notorious meme stocks this year. Analysts on Wall Street will be paying close attention to many of the earnings to gauge how the American economy is performing heading into the year’s second half, and investors may use the news to tweak their portfolios for the summer and fall.
Here are six stocks reporting earnings the week of June 21:
- Rite Aid (NYSE:RAD)
- BlackBerry (NYSE:BB)
- FedEx (NYSE:FDX)
- Darden Restaurants (NYSE:DRI)
- Nike (NYSE:NKE)
- Carmax (NYSE:KMX)
Earnings Reports Next Week: Rite Aid (RAD)
A slew of earnings come out on June 24, and among them is drugstore chain Rite Aid. The Camp Hill, Pennsylvania-based company is the largest chain of retail pharmacies on the U.S. East Coast and the third largest in the entire country with nearly 2,500 outlets and annual revenues of more than $20 billion. Wall Street analysts expect Rite Aid to report $6.17 billion in revenues for its latest quarter compared to $6.03 billion a year earlier, and earnings per share of 5 cents versus a loss of $1.19 per share a year ago.
Rite Aid’s stores have faced challenges over the past year due the pandemic. Sales of Halloween candy and cold and flu medications were down, for example. However, the company’s share price has been rocking lately now that it is distributing vaccines against Covid-19 at its retail outlets, and since the company reported stronger-than-expected full-year 2020 financial results. Year-to-date, RAD stock is up 30% but remains very affordable, opening on June 18 at $21.47.
Also reporting on June 24 is everyone’s favorite Canadian meme stock, BlackBerry. Once a leading phone manufacturer, BlackBerry today has reinvented itself as a developer of software that helps to power self-driving cars and Internet of Things (IoT) connected technologies. Long removed from its heyday, BlackBerry’s stock was trading just above the $5 penny stock threshold at the start of this year before it attracted the attention of retail investors on r/WallStreetBets.
In January of this year, BB stock jumped over 3o0% to a high of $28.77 as the company was turned into a popular meme stock and retail investors tried to push it “to the moon.” The stock has since come back to Earth but has held onto some of its gains, trading at $13.54 at the start of June 18. Moving forward, BlackBerry will continue to try and remake itself as a trusted software developer. Analysts continue to be cautious about the stock, saying they expect BlackBerry to report negative EPS of 5 cents in its latest earnings report compared to positive 2 cents a year earlier.
Earnings Reports Next Week: FedEx (FDX)
Delivery and logistics company FedEx’s latest earnings should provide some clues to the strength of the U.S. economy coming out of the pandemic. The company’s shipments spiked during the pandemic due to increased online orders and have continued to be strong as businesses rebound this year and begin spending on shipping again. In its previous earnings report, FedEx said that shipments at its Ground unit jumped 37% year-over-year in the first nine months of the company’s fiscal 2021. The company also reported cash on hand of $8.86 billion and debts of only $646 million.
So far in 2021, FedEx stock has risen as much as 21.6% in May before declining to its June 18 opening of $284.15. Overall, it’s up 109% over the past 12 months. FDX stock recently got a vote of confidence from JPMorgan Chase (NYSE:JPM) after the bank raised its price target to $366 per share from $340 previously, 29% higher than its current price. For its upcoming earnings on June 24, analysts expect FedEx to report revenues of $21.47 billion, which would be 20% higher than a year earlier, and EPS of $4.91, which would represent year-over-year growth of 95% from $2.53 per share seen in the same period of 2020.
Darden Restaurants (DRI)
We’ll receive another barometer of the economic reopening when Darden Restaurants reports its latest earnings on June 24. The Orlando, Florida-based company owns and operates several popular chain restaurants across the U.S., including Olive Garden and the Longhorn Steakhouse, among others. Wall Street is looking for Darden Restaurants to report revenues of $2.18 billion and EPS of $1.77, up from a loss of $1.24 a year earlier. The company’s results are expected to accelerate now that Covid-19 restrictions are being lifted on restaurants in most U.S. states.
DRI stock is up 8% this year, opening on June 18 at $130 a share. Over the past 52 weeks, the stock has climbed 81% higher on expectations for the end of pandemic lockdowns that kept people from dining in the company’s restaurants. The share price plunged from $121 to $26 when the pandemic first hit in March 2020. However, the health crisis did push Darden to improve its delivery, takeout and mobile ordering systems. That has put the company in a good position today, enabling it to expand its restaurants and increase its dividend.
Earnings Reports Next Week: Nike (NKE)
The company with the earnings likely to attract the most attention next week is shoe and sports apparel company Nike, also on June 24. The Eugene, Oregon-based company continues to have a leading market share with 2020 sales of $37.4 billion. Yet Nike’s stock has trended lower and been consolidating since the company’s last earnings report at the end of February, which disappointed analysts. For its fiscal third quarter of 2021, Nike reported that its revenue fell 10% in North America, which represents more than a third of Nike’s global business.
Investors responded by pushing NKE stock down to its June 18 opening price of $126.68 a share. Year-to-date, the stock is down 10% following a gain of more than 30% in 2020. Investors and analysts have also been concerned by reports from the company of ongoing supply chain problems. Nevertheless, Nike continues to invest in technology and is pushing to become a digital first company. In its last earnings report, Nike said that its digital sales rose 59% year-over-year.
For its upcoming earnings, analysts expect Nike to report EPS of 51 cents on revenue of $11.24 billion.
And finally, we will get a snapshot of the financial health of used car retailer Carmax. The Richmond, Virginia-based company operates 226 locations throughout the U.S. and generates nearly $20 billion a year in revenue. In 2020, Carmax sold nearly 830,000 used cars as business boomed, pushing prices higher. Used car prices were responsible for a third of of the 5% increase in consumer prices (inflation) seen in May of this year. The average age of a vehicle on the road in the U.S. today is a record high 12.1 years.
This is all good news for Carmax and its shareholders. So far in 2021, KMX stock has increased 20% to its June 18 opening price of $113.18. CarMax recently announced a new partnership with coffee and doughnut chain Dunkin’ that will see CarMax customers who take a test drive of one of its vehicles receive a $10 Dunkin’ gift card. While the promotion might seem like a gimmick, it’s further evidence of Carmax’s efforts to grow its brand with consumers. Due to the strong market for used cars, analysts expect Carmax to report EPS of $1.64 versus a loss of 15 cents a year ago when it reports its latest earnings on June 25.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.