Checking In With Consumers, Commerce Department Before Retail Earnings

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Includes: BITE, FDIS, FXD, GPS, JCP, KSS, M, PMR, RCD, RETL, RTH, SHLD, TJX, VCR, XLY, XRT
by: Kapitall

Before apparel retailers report earnings, here's what some economic indicators say about the retail landscape.

If you're thinking about investing in the retail industry, there are two economic indicators you should definitely know: the Consumer Confidence Index and the Commerce Department's monthly retail sales.

Each month, the Conference Board - a nonprofit business membership and research organization - releases its Consumer Confidence Index, a survey that measures consumer optimism or pessimism. The Consumer Confidence Index is considered an economic indicator because it shares consumer sentiment about present employment and business conditions, as well as their six-month outlook for business, employment and income.

When consumers are optimistic and confidence is high, the underlying belief is that they'll make more purchases and stimulate the economy through spending. But if confidence is low and pessimism is the chief sentiment, consumers are expected to spend less.

Consumer confidence surpassed expectations of a 93.5 reading in December, rising to 96.5 from a revised November reading of 92.6. But for two-thirds of the fourth quarter of 2015, consumer confidence was on the decline. November's initial reading of 90.4 was a 14-month low for the index, and October kicked off the downturn with a reading of 97.6, down from 102.6 in September.

Like the Consumer Board, the Commerce Department releases its economic indicator on a monthly basis. The Advance Monthly Trade Retail Report is typically released six weeks after the start of the report's reference month and contains estimates for retail sales, inventories and inventories-to-sales ratios. Retailers and restaurants provide these estimates and preliminary sales data from the preceding month. That data is then presented as both seasonally adjusted and unadjusted within the report.

In December, according to the Commerce Department, U.S. retail sales fell 0.1% after rising a revised 0.4% in November. Economists polled by Reuters had expected sales to remain flat.

Now, these economic indicators aren't the only resources you should turn to when looking into retail stocks. It can also be worthwhile to analyze other data sources, such as the National Retail Federation and MasterCard SpendingPulse. Both the NRF and MasterCard saw a gain in holiday spending this past December, with the NRF stating retail sales rose 3% and MasterCard reporting a 7.9% increase (excluding autos and gas) in sales.

Keeping these economic indicators in mind, here is a list of six major retailers reporting quarterly earnings this week. The list includes each stock's earnings and revenue estimates, as well as reported earnings and revenue from the same quarter a year ago.

Click on the interactive chart to view data over time.

1. The Gap Inc. ((NYSE:GPS), Earnings, Analysts, Financials): Operates as a specialty retailing company. Market cap at $10.73 billion, most recent closing price at $26.24.

Earnings date: Thursday, February 25, after market close.

The average earnings estimate is $0.57 per share and was revised upward from $0.53 within the last 30 days. During the same quarter a year ago, Gap's quarterly earnings were $0.75 per share.

The average revenue estimate is $4.46 billion, down 5.20% from $4.71 billion the prior year.

2. J.C. Penney Company Inc. ((NYSE:JCP), Earnings, Analysts, Financials): Operates department stores in the United States and Puerto Rico. Market cap at $2.20 billion, most recent closing price at $7.32.

Earnings date: Friday, February 26, before market open.

The average earnings estimate is $0.23 per share and was revised upward from $0.22 within the last 30 days. During the same quarter a year ago, J.C. Penny's quarterly earnings were $0 per share.

The average revenue estimate is $3.99 billion, up 2.50% from $3.89 billion the prior year.

3. Kohl's Corp. ((NYSE:KSS), Earnings, Analysts, Financials): Operates department stores in the United States. Market cap at $8.55 billion, most recent closing price at $44.38.

Earnings date: Thursday, February 25, before market open.

The average earnings estimate is $1.56 per share and was revised downward from $1.88 within the past 30 days. During the same quarter a year ago, Kohl's earnings were $1.83 per share.

The average revenue estimate is $6.39 billion, up 0.90% from $6.34 billion the prior year.

4. Macy's Inc. ((NYSE:M), Earnings, Analysts, Financials): Operates department stores and an e-commerce site in the United States. Market cap at $12.71 billion, most recent closing price at $40.23.

Earnings date: Tuesday, February 23, before market open.

The average earnings estimate is $1.89 per share and was revised downward from $2.21 within the past 30 days. During the same quarter a year ago, Macy's quarterly earnings were $2.44 per share.

The average revenue estimate is $8.83 billion, down 5.70% from $9.36 billion the prior year.

5. Sears Holdings Corporation ((NASDAQ:SHLD), Earnings, Analysts, Financials): Operates as a retailer in the United States and Canada. Market cap at $1.85 billion, most recent closing price at $16.71.

Earnings date: Thursday, February 25, before market open.

The average loss estimate is $1.36 per share and was revised downward from a loss of $1.01 within the past 30 days. During the same quarter a year ago, Sears's quarterly loss was $0.47 per share.

The average revenue estimate is $7.26 billion, down 10.40% from $8.10 billion the prior

6. The TJX Companies Inc. ((NYSE:TJX), Earnings, Analysts, Financials): Operates as an off-price apparel and home fashions retailer in the United States and internationally. Market cap at $48.56 billion, most recent closing price at $71.59.

Earnings date: Thursday, February 25, before market open.

The average earnings estimate is $0.94 per share and has remained unchanged for the past 90 days. During the same quarter a year ago, TJX's quarterly earnings were $0.93 per share.

The average revenue estimate is $8.73 billion, up 5.10% from $8.20 billion the prior year.

(Quarterly sales data sourced from Zacks Investment Research. Earnings and revenue estimate data sourced from Yahoo! Finance. All other data sourced from FINVIZ.)