Our first ever weekly earnings report preview for the week of September 7, 2020 was a success and we are hoping to continue the streak. Last time we took a look at Peloton, Lululemon, and American Eagle. This week we are going to be looking at similar companies because retail is always a very interesting sector during earnings reports.
Stitch Fix Earnings Report Preview
The first company that is sure to make a splash during their earnings report is going to be Stitch Fix Inc. They will be reporting after market close on Tuesday, September 22. SFIX has a reputation of being very volatile when they report. They consistently hit double digits percentage point movements after their report and we are expecting more of the same this time around.
Stitch Fix’s model is unique but is very hit or miss. Subscribers tend to be short term but there have been instances where subscriber numbers go higher and lower. Usually their stock price tends to hover in the $20 range because it just can’t seem to sustain manageable growth. And one thing to note here is that COVID most likely took a huge hit on this company. This is actually the main reason why we are expecting SFIX to fall after their earnings report. They are simply too small and too unpredictable for them to have weathered the storm from COVID. Definitely keep your eye on Stitch Fix as a short option for this week.
Nike Earnings Report Preview
The other company we are looking into is going to report on the same day and it has a much bigger presence than Stitch Fix. Nike is expected to be in the hot seat, just as many apparel companies are. COVID has made it almost impossible to predict what the revenue was during quarantine time so many of us are left scrambling for clues.
Nike is arguably the biggest apparel company in the world so even if they took a hit due to COVID, they are definitely expected to bounce back with ease. One thing that we learned last week from Peloton’s earnings report is that many people took on working out from home. One way that Nike could have benefitted from this could have been in an increase in sales in their sportswear department. We are expecting that the dip that Nike experienced from COVID in the early stages were made up in the last couple months. So we have Nike as a buy for the week.
Costco Earnings Report Preview
The last stock for the week that we are highlighting is Costco. COST is scheduled to report this Thursday, September 24 sometime during the trading day. This is actually one of the few stocks that could be in better standing after COVID. Costco focuses consumer goods which was one of the only sectors to see growth in the early days of COVID. COST has a great business model as I’m sure many of you readers are Costco members.
Costco is the safest bet in our eyes. They are expected to report an increase in revenue from last year so that should drive stock prices higher. It is possible for them to miss these expectations but we don’t see that as too likely. Keep your eye on Costco as a big winner during their earnings report this week.
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