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Retailers report – What to expect in markets Tuesday

A swathe of retail earnings reports Tuesday will provide further indications of the strength of the consumer and the companies that cater to them.

Tuesday’s docket of major retail companies reporting earnings include AutoZone (AZO), Home Depot (HD), J.C. Penney (JCP), Kohl’s (KSS), and TJX Companies (TJX) before market open, along with Nordstrom (JWN) after market close.

Heading into results, J.C. Penney, Nordstrom and Kohl’s on Monday were among companies in the Russell 3000 with the most short interest as a percentage of float, according to a Bloomberg report citing data from the New York Stock Exchange and Nasdaq. Short interest for each company was estimated at 41.8%, 19.7%, 18%, and 16.9%, respectively.

These retailers’ results come after the Commerce Department last week reported an unexpected decline in April retail sales. The drop was driven by a cut-back in consumer spending on autos, electronics and home-improvement store goods. However, retail sales in March were upwardly revised to see a 1.7% gain, the strongest increase since September 2017.

Here’s what Wall Street is expecting when each of these companies reports results:

AutoZone

Consensus analysts expect the auto parts retailer to report adjusted earnings per share of $15.11 on revenue of $2.77 billion for its fiscal third quarter, according to data compiled by Bloomberg. In the year-ago period, AutoZone reported adjusted EPS of $13.42 on net sales of $2.66 billion.

In April, UBS raised its price target on shares of AutoZone to a Street high of $1,210 – from $1,065 previously – and reiterated a Buy rating on the stock. The firm cited more strategic pricing for its more optimistic outlook, noting that AutoZone’s efforts have helped narrow the discrepancy between its prices and Amazon’s.

AutoZone’s stock had 11 Buy rating equivalents, 9 Holds and 2 Sells, according to Bloomberg data Monday.

Shares of AutoZone have risen 17.4% so far in 2019.

Home Depot

Home Depot is anticipated to deliver adjusted EPS of $2.18 on revenue of $26.38 billion for its fiscal first quarter, and comparable same-store sales are expected to have grown 4.3%. In the year-ago quarter, the company posted sales of $24.9 billion and adjusted EPS of $2.08.

Unfavorable weather is expected to have put a chill on home improvement projects and, by extension, results for companies including Home Depot and Lowe’s, the latter of which reports results Wednesday.

And in the first months of the year, data on the housing market has been choppy, with mortgage applications spiking between increases and decreases. But at the same time, pending home sales were shown to have jumped a much better-than-expected 3.8% in March, creating a market of new homeowners looking for products to help with home improvement projects.

Shares of Home Depot have risen 12.1% for the year-to-date.

J.C. Penney

Wall Street expects J.C. Penney to post an adjusted loss per share of 38 cents on revenue of $2.47 billion for its fiscal first quarter, along with a comparable same-store sales contraction of 3.9%.

In the year-ago quarter, J.C. Penney posted an adjusted loss of 22 cents per share on net sales of $2.58 billion.

The beleaguered department store topped consensus expectations in holiday quarter results reported in February, providing a sign that the company’s turnaround plan had begun to pay off. Last fall, J.C. Penney brought on new CEO Jill Soltau, whose major restructuring efforts have included shuttering some J.C. Penney brick-and-mortar locations, exiting the appliance business, focusing more heavily on apparel and bringing on a host of new executives.

J.C. Penney announced in February that it planned to close 18 department stores in 2019, along with nine home and furniture locations.

Shares of J.C. Penney have risen 9.6% for the year through Monday’s close.

FILE- In this Nov. 24, 2017, file photo, a shopper heads into a J.C. Penney store in Seattle J.C. Penney Co. reports financial results on Friday, March 2, 2018. (AP Photo/Elaine Thompson, File)

Kohl’s

Kohl’s is expected to deliver first-quarter adjusted EPS of 67 cents on sales of $3.93 billion. In the year-ago quarter, the company posted adjusted EPS of 64 cents on revenue of $4.21 billion.

In March, Kohl’s guided toward comparative same-store sales growth of flat to up 2% for fiscal 2019, along with full-year adjusted EPS in the range of $5.80 to $6.15.

Last month, Kohl’s announced that it would allow Amazon customers to return packages at more than 1,150 stores starting this summer. This built on a relationship between the two companies that extended as far back as fall of 2017, when Kohl’s began selling Amazon devices and accepting returns at a select number of stores.

The most recent announcement sent Kohl’s shares higher as analysts considered the additional foot traffic the tie-up would help generate at the company’s brick-and-mortar locations.

Shares of Kohl’s have fallen 4.1% for the year-to-date.

Nordstrom

The Street expects Nordstrom to post adjusted EPS of 43 cents on sales of $3.57 billion. In the year-ago quarter, Nordstrom’s earnings were 51 cents per share on net sales of $3.47 billion.

Nordstrom’s shares have suffered for much of the past year after a failed attempt to bring the company private in 2018 with the company’s founding family. The retailer recently disappointed in fourth-quarter results encapsulating the key holiday season, with the company noting that sales at its full-priced stores came in “below expectations” and that it would be using promotions to reduce excess inventory.

Shares of the company have declined 20.4% for the year-to-date.

TJX Companies

TJX Companies is expected to report adjusted EPS of 55 cents per share on revenue of $9.21 billion. In the year-ago quarter, the company reported adjusted EPS of 96 cents on revenue of $8.7 billion.

Wall Street is broadly optimistic about the parent company of T.J. Maxx and Marshalls heading into first-quarter earnings. The stock had 20 Buy rating equivalents, 6 Hold ratings and 2 Sell ratings, according to Bloomberg data Monday.

Store checks “suggest TJX was likely a standout vs. a very sluggish quarter for softline retail peers,” Credit Suisse analyst Michael Binetti wrote in a note Monday.

“In the near-term, we expect the stock to focus on lapping a strong +9% comp in 3Q and the potential for tariff impacts on the Home business (a category with outsized exposure to China manufacturing),” he added. “That said, we think TJX has proven itself a winner during periods of trade-down, and any potential chaos in the channel if tariffs hit are more likely to create significant inventory opportunities.”

Shares of TJX are up 18.6% for the year-to-date.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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