Stocks traded in a tight range last week as first-quarter earnings season wound down and investors started looking toward second-quarter results. The Dow Jones Industrial Average (^DJI 0.67%) and the S&P 500 (^GSPC 0.87%) indexes remained near record highs, though, up roughly 8%.
Investors can expect volatility in H&R Block (HRB 0.94%), Kroger (KR 0.64%), and Bob Evans (BOBE) stocks over the next few trading days. Here's what to look for in their upcoming quarterly results.
H&R Block's tax season
Tax preparations services specialist H&R Block will announce its earnings results after the market closes on Tuesday. Shares are trouncing the market so far this year, despite concerns over a leadership transition and the prospect that a tax law overhaul could disrupt its business. While that law reboot remains an outside possibility, investors will likely focus on the company's latest operating trends. By all accounts, H&R Block fared well over the key tax season, adding market share despite a slight drop in volume. The company announced in late April that it had processed 19.4 million returns this fiscal year, with growth in self-directed products offsetting a drop in assisted returns.
Image source: Getty Images.
Rising prices are also expected to push profit margins higher, which helps explain why Wall Street is looking for strong earnings growth this week. H&R Block is forecast to post $3.53 per share of profit, up from $3.16 per share a year ago as revenue ticks up by less than 1% to $2.32 billion.
Kroger's growth slump
Kroger will post its first-quarter results on Thursday morning. The grocery giant's last quarterly outing showed an encouraging uptick in growth following a brutal stretch of declines. In fact, comparable-store sales gains dropped for four straight quarters to almost touch negative territory before rebounding slightly in the fourth quarter.
Data source: Kroger filings. Chart by author.
The good news is the retailer completed its 12th straight year of market share gains in fiscal 2016. Its volume of sales also improved at a healthy clip, which suggests that much of the past year's decline was about price deflation rather than rising competitive threats.
With that in mind, investors will be looking for signs that prices are inching higher in the industry. CEO Rodney McMullen and his executive team aren't predicting much of a rebound there, though. Comps are predicted to range from flat to 1% growth in 2017 and may even decline slightly in the early part of the year.
Bob Evans' new food focus
Investors have pushed Bob Evans stock up this year as they applaud recent moves to focus on and expand its core refrigerated foods business. The company just completed the sale of its restaurant division, raising nearly $500 million of cash, much of which the company is sending directly to shareholders in the form of a special dividend that will hit their accounts on Friday.
In the earnings release on Thursday morning, Bob Evans executives will likely discuss how they see their purchase of Pineland Farms improving the business over the coming years. With their new, broader portfolio of prepared foods and side dishes, the company aims to win market share in grocery stores through continued dominance over the refrigerated dinner side dish segment. At the same time, Bob Evans will be branching out into new retailing channels like warehouse clubs and convenience stores. Executives are also excited about how the Pineland Farms acquisition adds the potential to partner with a few large restaurant chains that may be looking to lower their costs.
