Stocks rose in volatile trading last week, as the Dow Jones Industrial Average (DJINDICES: ^ DJI) gained nearly 2% and the S&P 500 (SNPINDEX: ^ GSPC) increased by just under 1%. Both indices are higher so far this year after a rally in 2020.
The earnings season continues over the next few days with some of the market’s favorite stocks reporting results. This listing includes Point correction (NASDAQ: SFIX), Ulta Beauty (NASDAQ: ULTA), and Campbell Soup (NYSE: CPB), which we will preview the announcements below.
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1. Stitch Fix order volume
Stitch Fix shares have jumped since its earnings report in early December. This rally has created high expectations for its update on Monday. After all, the clothing giant shocked wall street on its last outing achieving record customer gains even as it pivoted to meet the demand for more casual wear for the home.
This week’s report is expected to show evidence of growing market share, but keep an eye on user engagement, which is reflected in metrics like repeat order volume and average spend. These numbers have increased in recent times, implying an acceleration in future sales growth.
And look for CEO Katrina Lake and her team to discuss their expansion initiatives, including direct buying options and a push into new clothing categories, as Stitch Fix aims for a significantly higher business footprint in the long run.
2. Fall in sales of Ultra Beauty
Sales of Ulta Beauty were pinched by the pandemic last year, with a drop in retail traffic and a drop in demand for makeup products in an era of social distancing. Investors are hoping for signs on Thursday that these negative trends are loosening their grip on the company.
CEO Mary Dillon and her team said in December that revenue is expected to worsen in the fourth quarter after improving to a 9% decline in the third. This holiday season will be like no other, executives said, as they manage limited customer traffic in many key markets. Revenue is expected to fall between 12% and 14%, they said.
Longer term, investors have big questions about customer engagement with the salon and makeup niches as the COVID-19 threat wears off. Ulta Beauty won’t have definitive answers on Thursday, but shareholders could get a sense of the lingering impact following the chain’s expansion plans. The retailer said late last year that it plans to open just 30 new stores in 2021, up from more than 100 in fiscal 2018.
3. Campbell Soup organic sales
Campbell Soup reports its latest results on Wednesday and investors are bracing for slower growth. the consumer packaged goods the giant increased its sales during the pandemic, but the intensity of that boost has waned. Organic sales increased 8% in the last quarter compared to 12% in the previous quarter. Wall Street pros are forecasting a further deceleration this week, to around 6%.
The stock’s trajectory since the December report suggests investors believe Campbell Soup will revert to its previous nearly flat annual sales growth after the pandemic-influenced 2020 surge. But the company could surpass those predictions if it manages to convince many of its new customers to continue using its soups, snacks and meals even after the restaurant industry returns to full capacity at the end of 2021.
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