Market Snapshot: Why retailers are under pressure this earnings week
Retailers are some of the biggest companies left to report quarterly results this earnings season, but after last week’s rout of consumer-dependent media companies, they’re likely facing the same high standards from investors.
This past week, the Dow Jones Industrial Average DJIA, -0.27% failed to snap its longest losing streak since the debt-ceiling crisis in 2011, closing down again on Friday for a seventh consecutive session. The blue-chip index fell 1.8% for the week. Similarly, the S&P 500 Index SPX, -0.29% finished 1.3% lower on the week, and the Nasdaq Composite Index COMP, -0.26% shed 1.7%.
The consumer discretionary sector took a beating this past weak, dropping 2.4%, as investors sold media stocks on concerns that more consumers are balking at the idea of paying for cable TV channels and could be ready to cut the cord.
Those same consumers are needed to support another round of consumer-based earnings reports coming out this week. While consumer data hit encouraging levels toward the end of the second quarter, it did little to help media companies. Now retailers are in the crosshairs.
Additionally, July retail sales data come out on Thursday, and August consumer sentiment data is to be released on Friday.
Only one Dow component, Cisco Systems Inc. CSCO, -0.21% along with 14 S&P 500 companies, reports earnings this week, with a slew of big-box retailers reporting the following week.
Earnings, however, have improved slightly this past week from earlier expectations. The S&P 500 is on track to post 1% lower earnings from the year-ago quarter, according to John Butters, senior earnings analyst at FactSet. A week ago, the index was tracking a 1.3% decline.
|Report date||Company/ticker (FactSet EPS / revenue estimates)|
|Mon., Aug. 10||
|Tues., Aug. 11||
|Weds., Aug. 12||
|Thurs., Aug. 13||
|Fri., Aug. 14||