Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn't necessarily translate into a huge pop for a stock.
During earnings season, BullMarket.com publishes a comprehensive 20- to 30-page Earnings Preview report for the week ahead each Friday.
Over the past two years, BullMarket.com used the data it has collected to correctly predict investor reactions for nearly two-third of the stocks it's previewed.
In its latest earnings preview, BullMarket.com looks at several popular stocks, including Ralph Lauren (RL - News), Best Buy (BBY - News), Dell (DELL - News), NetApp (NTAP - News), Hewlett-Packard (HPQ - News), Tiffany (TIF - News), Costco (COST - News), and Lowe's (LOW - News).
Here is just a tiny sample of what BullMarket.com wrote about Ralph Lauren:
Ralph Lauren is engaged in the design, marketing and distribution of products, including men's, women's and children's apparel, accessories (including footwear), fragrances and home furnishings. The company operates in three segments: Wholesale, Retail and Licensing. ...
Last quarter, the company said it earned $169 million, or $1.78 per share, for the fiscal third quarter that ended December 31st. That compared with net income of $168.4 million, or $1.72 per share, in the same quarter last year. Revenue increased by 17% to $1.81 billion.
The results beat analyst expectations of $1.66 per share on revenue of $1.75 million.
"We achieved double digit revenue growth in all key geographies in the quarter and year-to-date. We also delivered excellent profit flow-through, despite unprecedented cost of goods inflation and considerable economic turmoil in Europe and a holiday season that was promotional for apparel," said Roger Farah, the company's chief operating officer.
"Worldwide revenue growth was well balanced across core apparel offerings. Emerging categories such as handbags, Denim & Supply and dresses were also important contributors to our growth," he added.
The company's wholesale revenue grew 11%, while sales at its own stores increased 22%, aided by new stores opened in the last year. Sales on a same-store basis also increased by a healthy 12%.
The gross profit rate of 57.1% in the third quarter was 150 basis points below the prior year, which was essentially in line with management's expectations and reflected the full impact of the peak cost of goods inflation Ralph Lauren experienced for the fall and holiday seasons.
The gross margin pressure was partially mitigated by selective price increases, greater retail segment penetration, which is largely driven by the company's growing international retail network, and accelerated e-commerce growth. ...
Ralph Lauren has surpassed EPS estimates seven of the past eight quarters, missing estimates once. During that span, the stock has risen the next session six of eight quarters. Seasonally, the stock has risen twice in the past four years. ...
Outside of earnings, Ralph Lauren is benefiting from increased spending among affluent customers. International expansion, however, is its biggest growth driver, and like a number of other high-end retailers, the company has been taking over its international distribution, which leads to higher margins.
However, with a third of its business outside of North America, and a good chunk of that tied to Europe, the company is exposed to some of the weakness in the region. ...
The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.
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- Ralph Lauren