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Best Buy, Dick's Sporting Goods earnings — What to know in markets Tuesday

Heidi Chung

Investors will be paying close attention to Best Buy (BBY) and Dick’s Sporting Goods (DKS) when they release quarterly results ahead of the opening bell Tuesday.

Best Buy’s same-store sales, a key metric for retailers, is expected to have risen between 0.5% to 1.5% during the third quarter. The company has been implementing tariff-mitigation strategies, and analysts believe the efforts will soon begin paying off. Best Buy’s exposure to China is expected to be about 40% by next year, compared to 60%. However, Best Buy’s struggling gaming and mobile businesses will be in focus. Sales and traffic are expected to see a boost from investments in the company’s e-commerce and delivery businesses.

Analysts polled by Bloomberg expect Best Buy to report adjusted earnings of $1.03 per share on $9.70 billion in revenue during its third quarter. The options market is implying a 5.8% move in either direction following the big box retailers report.

Shares of Best Buy have surged 43% this year and have outpaced the S&P 500’s (^GSPC) 27% gain in the same time period.

Hickory, NC, USA-20 August 2018: A Dick's Sporting Goods store, one of over 600 in the U.S.

Meanwhile, investors will also be monitoring fellow retailer Dick’s Sporting Goods when it releases third-quarter earnings. Analysts expect the company to report adjusted earnings of 38 cents per share on $1.91 billion in revenue.

Ahead of Dick’s report, analysts at Bank of America Merrill Lynch upgraded the stock to Buy from Neutral and boosted the price target to $55 per share from $43 per share. The firm cited strength in Dick’s digital strategies, private label lines as well as a recent successful launch of the Yeezy shoes in September as reasons for the upgrade. The analysts also believe Dick’s is well-positioned headed into the fourth quarter.

Shares of Dick’s Sporting Goods have risen 29% in 2019, and the options market is implying a 7.7% move in either direction on the heels of its earnings report.

Consumer Confidence

In addition, the Conference Board’s consumer confidence reading for November will be released Tuesday. Economists polled by Bloomberg expect consumer confidence to jump to 127.0 during the month, up from 125.9 in October.

“A new high in the stock market, solid employment data, and declines in gasoline prices should boost consumer optimism,” Credit Suisse said in a note Thursday. “Consumers have been resilient throughout the trade conflict, as confidence has remained high in a tight range for the past year, a stark comparison to the sharp deterioration in business optimism.”

Other notable earnings announcements scheduled for Tuesday include Abercrombie & Fitch (ANF), Burlington Stores (BURL), Hormel (HRL), and Dollar Tree (DLTR) before market open; Box (BOX) reports after market close.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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