The US December quarter earnings season is in its last throes this week and it is will be dominated by retail and consumer stocks and for some, the news will not be good.
Retailers like Home Depot, Lowe’s Cos, Dillard’s, Macy’s, L Brands, Best Buy, JC Penny, Shake Shack, discount retailers, TJX Companies and Gap are due to report this week along with the likes of Campbell Soup, Dean Foods, Tenneco and Liberty Media.
Department store chains, Macy’s and Dillards are expected to produce weak updates, along with Campbell Soup which is in the midst of a break up by selling off its international arm, including Arnott’s in Australia.
Home Depot and Lowes’ Cos, the two big US versions of Bunnings, will be watched to see if the slowdown in home renovation spending has hurt their businesses.
The US December quarter earnings reporting season is now 90% done and the AMP’s Shane Oliver says it “was much better than feared. 72% beat on earnings with an average beat of 3.2% and 59% beat on sales.”
“Earnings growth is running at 18.5% year on year for the quarter. But as can be seen in the next chart the level of surprises and earnings growth is down.
“US earnings growth is likely to be around 5% this year as the boost from the corporate tax cut drops out, Dr. Oliver wrote at the weekend.
