After having dropped by as much as 11% at one point this year, stocks are on the upswing headed into 2015's final month. The S&P 500 (^GSPC -0.22%) and the Dow Jones Industrial Average (^DJI 0.06%) both gained three percentage points last week as a surprisingly strong earnings season wound down, and comments from the Federal Reserve pointed to a likely December interest rate hike.
With markets closed on Thursday in observance of Thanksgiving Day, it's a short trading week ahead. But investors still have plenty to digest over the next few days -- beyond that huge holiday meal.
Specialty retailer GameStop (GME 0.10%) will provide its holiday outlook for the fast-growing video game industry. Then Disney's (DIS -0.45%) Pixar studio returns to the big screen after a rare pause. Finally, mega-retailer Wal-Mart (WMT -0.65%) aims to capture customer traffic gains -- both in stores and online -- on the industry's biggest day.
Monday, Nov. 23 -- GameStop talks diversification
GameStop will kick off the week with earnings results before the opening bell on Monday. Despite two consecutive quarters of sales and profit beats, expectations are low heading into this report (the stock is down 17% since August). Wall Street sees just a 3% sales improvement for the video game seller, to $2.15 billion. Earnings should post a minor uptick as well, to $0.59 per share from last year's $0.57.
The Q3 and Q4 video game release calendar that will drive a big part of GameStop's results this year. Image source: GameStop investor presentation.
Last quarter, management issued a weak outlook, saying that comparable-store sales growth should slow dramatically, down from 8% to as low as 1% thanks to a lumpy video game release calendar. But investors will be most interested to hear about progress in GameStop's plans to diversify away from video games. Its consumer tech and wireless services store footprint, for example, jumped to over 10% of the total base last quarter. Shareholders will also be scrutinizing executives' comments on the critical holiday shopping season.
Wednesday, Nov. 25 -- Disney brings Pixar back to theaters
There's more to the Disney movie machine than just Star Wars. On Wednesday, The Good Dinosaur hits theaters just ahead of the holiday weekend. Because it was delayed in 2014, last year was the first year in almost a decade that families didn't get to watch a new Pixar release in theaters. Disney is hoping that the pent-up demand, and the extra production time, will combine to make for a solid box office showing before Star Wars Episode: VII launches next month.
Disney's studio business has witnessed a huge spike in profitability -- segment income jumped 27% higher last year on flat revenue growth. That earnings jump is mostly thanks to merchandising tie-ins from Frozen, and The House of Mouse wants to continue that success with animated films like The Good Dinosaur.
Friday, Nov. 27 -- Retailers fight for shoppers
After a day removed from the markets, investors return to trading just as consumers rush back to spending. The yearly scramble for Black Friday shopper traffic has retailers promoting door-buster deals again, in the hope that once inside the store, these customers will decide to take care of most of their holiday spending in one trip. Still, physical chains know customers are rapidly shifting toward digital sales channels (e-commerce is up to 7.4% of all retailing, from 4.5% just five years ago).
Source: Federal Reserve Economic Data.
That's why Wal-Mart is making most of its Black Friday deals available on its website, too. The retailer won't get a store traffic boost from this move, but at least it can compete more effectively with online titan Amazon.com, which is expected to post 23% higher fourth-quarter sales even as Wal-Mart's revenue climbs by less than 3%.
