The focus of earnings season shifts this week to brick-and-mortar retailers, with companies including Macy's and Nordstrom set to announce first-quarter results.
ADVERTISEMENT
Wall Street is expecting the worst of the retail apocalypse this week (M, HD, JWN, L)
Just four retail subindustries have reported or are expected to report earnings growth for the first quarter, FactSet says.
null
ADVERTISEMENT
Recommended articles
Analysts are not expecting to be impressed.
"Of the 13 retail sub-industries in the S&P 500, just four have reported or are expected to report earnings growth for the first quarter," John Butters, the senior earnings analyst at FactSet, said in a note on Friday.
Roughly 3,500 brick-and-mortar retail stores are expected to close over the first half of 2017, and executives could announce more cost-cutting measures in their earnings results. Retail trade lost nearly 30,000 jobs from January through March, and the vast majority were in large department stores, according to the Bureau of Labor Statistics. The losses in February and March marked the worst two-month decline since November and December 2009.
ADVERTISEMENT
The subindustries leading forecasts for earnings growth in the first quarter are internet and direct-marketing retail and home improvement, Butters said.
That's not surprising. Warren Buffett put it aptly on Saturday when he said "the department store is online now." The Berkshire Hathaway CEO also told shareholders at the annual meeting that he was "too dumb" to not invest in Amazon. Jeff Bezos, Amazon's CEO, is "a different species," Buffett added.
Home-improvement retailers like Home Depot and Lowe's have benefitted from strong buyer demand and homebuilding and from rising home prices.
Auto retailers are expected to report growth of 0.8% even after a slowdown in the rate of car sales this year.
So far, the blended earnings growth rate for the first quarter, which combines reported and expected results, is 13.5%, FactSet said.
FOLLOW BUSINESS INSIDER AFRICA
ADVERTISEMENT
Recommended articles
Congo is spending 22% of its scarce revenue on security - Minister
Another African country is set to get a Russian embassy
Medic West Africa 2024: A resounding success in fostering collaboration and innovation for a brighter healthcare future
10 African countries with the most troubling external debt in 2024
10 African countries with the least soft power influence over the world
Kenyan government rejects calls to ban TikTok, recommends tighter control over
Congo accuses Apple of conflict minerals in its supply chain
Top 10 African countries with the highest fuel prices in April 2024
