Reports for Thursday, July 23
Report for Friday, July 24
Under Armour (UA)
Under Armour (UA) will report its FQ2 ’15 results before the opening bell on Thursday. For Under Armour, while sales are expecting to continue their streak of YoY double-digit growth, bottom-line growth is expected to be negative. Estimize is looking for EPS of $0.07 vs. the Street’s $0.05 estimate, with revenues of $772.33M vs. $761.77M. This would mean a bottom-line decrease of 12%, but a sales increase of 27%.
Under Armour is still benefitting from the popularity of athleisure wear, as are competitors such as Nike and Lululemon. Unlike certain athletic retailers which have struggled selling golf apparel as of late, such as Dick’s Sporting Goods, UA’s big bet on Jordan Spieth has paid off. After signing Spieth in 2013 when he wasn’t well-known, Under Armour’s golf-related earnings have doubled in the following two years. As wearables go mainstream, Under Armour will continue to benefit as they lead in that space with their smart apparel items.
McDonald’s Inc (MCD) will also report their FQ2 ’15 results before the opening bell on Thursday. Both Estimize and Wall Street are predicting an uplift in EPS QoQ but a fall YoY. The Estimize community forecasts an EPS figure of $1.25 compared to the Street which predict $1.23. Estimize predicts revenues to come in at $6.503B compared to Wall Street’s forecast of $6.454B.
McDonald’s has faced considerable headwinds over the past 5 years as the US consumer continues to become increasingly health conscious. To make matters worse, competitors offering healthier alternatives and using meat from animals that are not fed with antibiotics or growth hormones have emerged including Chipotle (CMG). Also, other competitors such as Yum! Brands (YUM) and Panera Bread (PNRA) have also announced similar initiatives in reaction to market demands.
One of McDonald’s major issues is its same-store sales growth figures which continue to be in the red. With over 36,000 stores operating worldwide, this figure needs to be turned around in order for McDonald’s to regain its strength. Investors will be eager to hear from newly appointed CEO Steve Easterbrook and get a greater appreciation of how Easterbrook plans to strategize effective tactics to stimulate the company’s topline revenue growth.
Amazon (AMZN) is also set to report its FQ2 ’15 results tomorrow after the closing bell. The Estimize community currently has 105 estimates and are calling for an EPS number of -$0.07 versus Wall Street which predict -$0.17. Estimize also forecasts higher revenues of $22.422B relative to Wall Street’s $22.308B consensus.
Amazon has continued to deliver solid revenue growth numbers as the online retailer continues to steal market share from the likes of Walmart, Best Buy etc. Amazon recently held its “Prime Day,” held for Amazon Prime members and topped expectations. Although the sales figures from Prime Day are not recorded in tomorrow’s release, the strong result is helping move Amazon’s share price higher.
Despite all the positive fundamentals associated with Amazon at present, investors will want to obtain more guidance regarding management’s spending plans moving forward. Amazon has a track record of poor investment purchases including the well-publicized flop that was the Amazon Fire Phone. These decisions have resulted in Amazon recording EPS declines for three of the past four quarters (with the exception of the holiday quarter).
Tomorrow’s report will be an important one for Amazon as the company looks to beat expectations to ensure share price strength for the upcoming quarter.
Starbucks (SBUX) will also report its FQ3 ’15 results after the closing bell tomorrow. Both the Estimize community and Wall Street are predicting a strong uplift in EPS QoQ and YoY. Estimize are predicting an EPS figure of $0.42 versus Wall Street which predict $0.41. In terms of revenues, Estimize are expecting $4.864B compared to Wall Street’s forecasts of $4.861B.
Starbucks continues to outperform competitors, returning 36.4% in capital gains to shareholders year-to-date (YTD) relative to Dunkin’ Brands (DNKN) and Krispy Kreme (KKD) who have returned 29.54% and -6.23% respectively. One of the key reasons why Starbucks has performed so well is due to its success in its technology investments. Similar to Domino’s (DPZ), Starbucks differentiated itself from its competitors through developing a solid technology framework which helps stimulate customer engagement driving same-store sales growth. At present, mobile transactions account for just under 20% of all transactions for Starbucks.
The report on Thursday will provide investors with a greater understanding of how management plan on capitalizing on various strategies aimed at leveraging of the company’s strong online community to build sales.
Finally, Biogen will release its FQ2 ’15 before the market opens on Friday. The Estimize consensus, pulling estimates from 26 different analysts, is 5 cents above the Wall Street consensus of $4.10. Estimize is calling for a revenue of $2.725B, just above the Wall Street consensus of $2.711B.
Importantly, Biogen announced its results from its phase 1b study of aducanumab, a drug meant to slow Alzheimer’s cognitive declines. The trial was a success in some respect as it demonstrated acceptable safety and tolerability. However, unfortunately for Biogen, the results revealed that improvements on scales designed to measure mental function were not statistically significant at a dosage of 6 mg/kg. Despite the upbeat nature of management, this result has not given a definitive answer as to whether this drug is effective or not. Biogen shares opened this morning down circa 3% in response to the announcement.
Investors will be interested in gaining more information on the results and what management’s expectations are for the upcoming trial scheduled for later this year.
(Photo Credit: Just Joe ( I’m back…sort of ))