Macy’s (M): Department store retailers rebounded in the second quarter after years of weak consumer spending and dwindling market share to rising ecommerce brands like Amazon. The resurgence started with Macy’s after the retailer beat earnings and revenue estimates by a wide margin. Continued efforts to optimize price, maintain efficient inventory levels, and expand private label offerings are expected to help Macy’s build on its Q2 gains. Additional developments in its ecommerce platform, off price brand and building out its cosmetics brand, Bluemercury, will have the biggest impact on the top line growth. Nonetheless, the second quarter may have been an anomaly and Macy’s could just as easily fall back into its old ways. A competitive landscape particularly from the online retailers are redirecting traffic away from department stores and thereby denting sales. As a result analysts’ expectations have been muted despite the positive traction generated in the second quarter.

Nordstrom’s (JWN): Nordstroms along with Macy’s and the rest of the names mentioned on this list was the beneficiary of better than expected earnings last quarter. The upscale department store was hit hardest from the changes in the retail environment that witnessed a shift away from luxury brands towards value channels. Shares are down 23% in the past 12 months but have since recovered to flat in 2016. Nordstrom’s investments to expand its omnichannel capabilities along with efficient cost controls and store expansions remain driving factors for top line growth. Needless to say the overall rebound in the retail sector is well off its peaks with overall growth running negative.

Kohls (KSS): Exceedingly low expectations made it easier for Kohl’s to top its quarterly results in the second quarter. Despite topping expectations, the Q2 results included a 1.8% decline in comparable store sales on a 2% decline in total revenue. Sluggish comps could see a boost in the third quarter that includes the pivotal back to school season and tend to drive traffic trends. Continued efforts to improve its base business and maintains its strategic initiatives, Greatness Agenda, should help drive growth through the holiday season. Kohls along with its peers should remain cautious about the weak spending environment and continued adoption of ecommerce platforms.

Ralph Lauren (RL): Luxury brands have been amongst the worst performers in the broader retail sector as consumers shift their spending towards value channels. Ralph Lauren, in particular, has seen shares drop 28% in the past 12 months on sluggish comparisons, challenging retail trends and numerous store closures. Margins have been hurt from frequent discounting to compete with the value oriented retailers, negative currency translation and heavy infrastructure investments. Efficient cost controls  may offset some of the losses while a recently applied restructuring strategy will help long term performance.  

Michael Kors (KORS): After weak revenue results from Kate Spade and Coach already this season, luxury brands appear to be unraveling. This doesn’t bode well for Michael Kors who reports its third quarter results on Thursday. With a large exposure to volatile international markets and currency headwinds, both earnings and revenue could see their first downturn in over a year, after just getting by with flat growth in Q2. Estimates are seeing downward revisions activity ahead of its report, typically a sign of a miss on the horizon.

The main focus for KORS will be comps which in the past were driven by new store openings, expanding existing outlets and building out its omnichannel capabilities. But the retail environment is more challenging these days. Luxury brands and longtime status symbols are simply not resonating with consumers like they have in the past. As a result we have seen a great deal of discounting from key brands including Michael Kors. Discounting may very well drive sales but it also puts pressure on margins.

KORS: After weak earnings from Kate Spade and Coach, it appears likely that Michael Kors surging stock could hit a roadblock tomorrow. Shares of the luxury brand have risen 25% this year on consecutive beats and strong comparables. Both KATE and COH cited higher discounting and promotions for its poor quarterly results. Similar sentiment is likely to be echoed in KORs report tomorrow. The retail sector has been choppy lately and with a large exposure to volatile international markets both earnings and revenue could see its first downturn in over a year. Michael Kors continues to invest heavily in new store openings, expanding outlets and building its omni channel capabilities to remain competitive in the long term.

RL: Similar to KORS, recent reports from luxury brands doesn’t not bode well for Ralph Lauren. However, unlike KORS, Ralph Lauren stock has been beaten down lately. In the past 12 months shares have dropped over 20%. Despite a couple beats in the past few quarters, comparables continue to turn negative. Last quarter featured a 38% decline on the bottom line and 1% on the top. The company’s key problems include too many brands in retail stores, over reliance on department stores, large inventory hangover and high operating expenses. The company’s new CEO has actively addressed these issues and has implemented a new strategy but it certainly isn’t a quick fix.

WEN: Wendy’s is a part of a group of fast food names that has bounced back in recent months. The stock is up 9% year to date thanks to cost saving initiatives and improving bottom line growth. Revenue, on the other hand, is expected to continue to decline for the foreseeable future. Wendy's recently transitioned its company owned restaurants to franchise based models. Furthermore, a rise in beef prices since the beginning of the year, and other food costs is expected to put pressure on margins. Fortunately, international expansion, promotional campaigns and frequent menu innovations should offset some of the downturn.

Michael Kors Holdings Ltd. (KORS) Consumer Discretionary - Textiles, Apparel & Luxury Goods | Reports August 9, Before Market Opens

Key Takeaways

The Estimize consensus is looking for earnings per share of 76 cents on $958.23 million in revenue, 2 cents higher than Wall Street on the bottom line and $5 million on the top

Currency headwinds, frequent discounting and higher operating costs could takes their toll on this quarter’s report

After dismal earnings from peers, the bar has been set lower for Michael Kors

What are you expecting for KORS? Get your estimate in here!

After weak reports from Kate Spade and Coach, luxury brands appear to be unraveling. This doesn’t bode well for Michael Kors who reports its second quarter results tomorrow, before the market opens. Shares of the luxury brand have risen 25% this year on consecutive beats and strong comparables. Unfortunately, the retail sector has been choppy lately and with a large exposure to volatile international markets both earnings and revenue could see their first downturn in over a year. Estimates are seeing downward revisions activity ahead of its report, typically a sign of a miss on the horizon.

The Estimize community is looking for earnings per share of 76 cents, down 12% from the same period last year. That estimate has dropped 11% since KORS most recent report in June. Revenue is anticipated 3% lower at 958.23 million, marking the first quarter of negative comparisons in over 2 years. Don’t expect the market to take a miss lightly either. Kate Spade’s dismal report pushed its stock nearly 20% lower the next day. The main focus of tomorrow’s earnings report will likely be comps. In the past, strong comps were driven by new store openings, expanding existing outlets and building out its omnichannel capabilities. But the retail environment is more challenging these days. Luxury brands and longtime status symbols are simply not resonating with consumers like they have in the past. As a result we have seen a great deal of discounting from key brands including Michael Kors. Discounting may very well drive sales but it also puts pressure on margins.

Michael Kors also generates a large portion of its sales outside the United States. Its broad international exposure leaves them especially prone to currency headwinds. The strength of the dollar could also be mentioned if we see margins and profitability contract this quarter. Fortunately, the bar is set pretty low so it is not impossible for the company to top expectations and see a pop in the stock. Do you think KORS can beat estimates? There is still time to get your estimate in here!

Fossil, Inc. (FOSL) Consumer Discretionary - Textiles, Apparel & Luxury Goods | Reports August 9, After Market Closes

Key Takeaways

The Estimize consensus is looking for earnings per share of 9 cents on $674.95 million in revenue, right in line with Wall Street on the top and bottom line

Fossil is seeing weak comps and sales growth from sluggish demand, currency headwinds and macroeconomic challenges

The acquisition of Misfit last year positions Fossil to deliver smartwatches to its customers.

What are you expecting for FOSL? Get your estimate in here!

Watchmaker, Fossil, is scheduled to report second quarter earnings tomorrow, after the market closes. The company not only manufactures watches unders its own brand but also high fashion brands like Michael Kors and Kate Spade. Watch sales have been muted for some time now as demand across its multi brand portfolio continue to wane. Earnings have naturally following this downward trend, delivering negative earnings and revenue growth for 3 consecutive quarters. Given the ongoing changes in consumer behavior, don’t expect Fossil to right the ship this quarter.

The Estimize consensus is calling for earnings per share of 9 cents, 90% lower than the same period last year. That estimate has increased 155% since Fossil’s last report in May. Revenue is anticipated nearly 10% lower at $674.95 million, marking 7 straight quarters of negative sales growth. Shares of Fossil have unsurprisingly suffered through these tumultuous times. The stock is down 52% in the past 12 months and typically don’t perform well during earnings season. On average, shares decline by as much as 3% shortly after results are announced. Lately, Fossil is seeing discouraging trends throughout its core business. Soft watch sales have driven weak comps in North America and sluggish performance in international markets. Currency headwinds and economic challenges haven’t helped in key Asian and European markets. The performance in those regions are greatly decelerating and aren’t expected to deliver much growth. This is largely the result of waning demand and unfavorable foreign exchange rates.

With its legacy business showing no signs of picking up, Fossil is looking to wearable technology to pick up the slack. The acquisition of Misfit provides Fossil with a platform to bring smartwatches and innovative technology to its customers. Wearable technology is one of the fastest growing markets and should help offset the trouble in its core business. However, it also adds a new layer of competition against the likes of Apple and Samsung, who both offer smartwatches. Do you think FOSL can beat estimates? There is still time to get your estimate in here!

COH: Kate Spade kicked off earnings season for luxury brands on quite a sour note. After missing expectations the stock plunged over 20%. Unfortunately a weak quarter from KATE might bode well for Coach and other luxury brands reporting this week. Coach has only recently dug itself out of the hole. In the past 12 months shares are up 27% as comparable store sales begin to gain traction. North American comparables have steadily improved after comps declined by double digits every quarter last year. The new Disney collection along with an emphasize on lower price merchandise and ecommerce growth have helped drive sales. The problem with discounting is that it takes a toll on gross margins. Coach outlets currently account for 65% of total revenue, so it might be difficult to avoid weak margins.

WWAV: Last month Danone announced it would purchase WhiteWave for $56.25 per share. WhiteWave is currently trading below the buyout price but strong earnings and forward guidance could easily send the stock past that number. The shift in consumer preferences towards natural and organic food has driven demand for many of WhiteWave’s products. Revenue has steadily increased throughout the year while earnings have also shown improvement. Last quarter featured a beat on both the top and bottom line which caused the stock to pop almost 10%. This quarter might turn out differently though given the recent takeover. The conference call will shed some light on the deal and its impact on future quarters

RRGB: Red Robin has made a habit of missing revenue estimates and beating on earnings. The last 4 quarters have followed this trend as rising costs and softer consumer demand take their toll. Shares are down almost 46% in the past 12 months with very little signs of picking up anytime soon. Higher labor costs coupled with rising beef prices aren’t helping the burger chain hit its numbers. Nonetheless the company has taken initiatives to improve traffic and comparable store sales. They include menu innovations, renovation projects and using technology to improve the customer experience.