Q1 Earnings Preview: Lowe's (LOW), Best Buy (BBY) & Ross Stores (ROST)

Retail bellwethers Walmart WMT and Macy’s M reported their quarterly financial results last week. Both posted positive same-store sales growth and continued e-commerce expansion as they try to adapt to the Amazon AMZN-obsessed retail age.

With that said, let’s see what to expect from some other retailers’ quarterly earnings amid an extremely busy week for the industry.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Quick Overview ” data-reactid=”24″>Quick Overview

The week of May 20 is jam-packed with retail results. This group includes Nordstrom JWN, Kohl’s KSS, TJX TJX, Target TGT, Home Depot HD, and more. As of Friday, May 17, 459 of the S&P 500 members had reported their quarterly earnings results, with total earnings up +0.2% from the same period last year on +4.7% higher revenues.

More specially, 21 of the 39 retailers in the S&P had reported, with total earnings up nearly 18% on +9.4% higher revenues. Shares of Walmart popped following its quarterly earnings release last week, with M stock down slightly (also read: Previewing Department Store Stock Q1 Earnings).

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Lowe’s Companies, Inc. LOW” data-reactid=”27″>Lowe’s Companies, Inc. LOW

Home improvement power Lowe’s is scheduled to release its Q1 2019 financial results before the opening bell on Wednesday, May 22. Shares of LOW have outpaced its rival Home Depot over the last 12 months, up 25% compared to HD’s roughly sideways movement. Plus, Lowe’s has seen its stock price pop 18% in 2019 to help it top its industry’s average, hitting new highs along the way.

Lowe’s is projected to see its adjusted quarterly earnings jump 12.6% to reach $1.34 per share, based on our current Zacks Consensus Estimate. Last quarter, LOW’s EPS figure climbed 8% from the year-ago period and matched our estimate. At the top of the income statement, LOW is projected to see its revenue pop 1.8% to reach $17.67 billion. This would come above Q4 2018’s 1% revenue growth.

With that said, LOW’s earnings estimate revision activity has trended in the wrong direction for Q1 as well as fiscal 2019 and 2020. This means at least some analysts are less optimistic about its bottom-line expansion. Lowe’s is currently a Zacks Rank #3 (Hold) that sports a “D” grade for Momentum in our Style Scores system. Shares of Lowe’s closed regular trading Monday at $109.20, down roughly 8% from their 52-week intraday trading high.

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Ross Stores is an off-price apparel and home fashion retailer that posted 2018 revenue of roughly $15.0 billion. Shares of ROST have soared over 180% in the last five years to easily top its industry’s 102% climb. However, Ross Stores stock has fallen slightly behind the Nonfood Retail-Wholesale Market’s average expansion in 2019.

Peeking ahead, the Dublin, California-based firm is projected to see its adjusted first-quarter earnings climb by 0.90% to $1.12 per share. Meanwhile, its revenue is expected to reach $3.80 billion, which would mark a nearly 6% climb from the year-ago period. Investors should note that Ross Stores has topped its earnings estimate by an average of 3.75% in the trailing four periods. Plus, ROST has earned a few postive earnings estimate revisions for Q1 2019 over the last 30 days.

Ross Stores is a Zacks Rank #3 (Hold) at the moment that rocks “A” grades for both Growth and Momentum in our Style Scores system. The company is set to release its Q1 2019 financial results after the market closes on Thursday, May 23. ROST stock closed Monday down marginally to $96.67 per share

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Best Buy Co., Inc. BBY” data-reactid=”35″>Best Buy Co., Inc. BBY

Shares of Best Buy have soared over 30% this year to surpass its industry’s roughly 17% climb. The consumer electronics and appliance giant got a big boost in late February when its Q4 earnings results blew past Wall Street estimates and it provided better-than-expected guidance. Best Buy also posted 3% comparable sales growth last quarter.

Best Buy executives pointed to the continued strength of its Best Buy 2020 strategy as a major reason for its growth. These initiatives include building out its “smart home” offerings, the expansion of its “Total Tech Support” and “In-Home Advisor” businesses and more. Looking ahead, the company’s Q1 revenue is projected to pop just 0.36% to reach $9.14 billion. At the bottom end of the income statement, Best Buy’s adjusted quarterly earnings are expected to climb 7.3% to $0.88 per share.

Like its retail peers that we just discussed, BBY is a Zacks Rank #3 (Hold) currently. The company also sports “A” grades for Value and Growth in our Style Scores system and has an impressive history of quarterly earnings beats, which includes an 8.6% average beat over the trailing four periods. Shares of Best Buy closed Monday at $68.84, down roughly 19% from their 52-week intraday highs. Best Buy is scheduled to release its first-quarter fiscal 2020 results before the opening bell on Thursday, May 23.