Stocks logged solid gains last week as the S&P 500 (^GSPC 0.87%) rose by over 1% and the Dow Jones Industrial Average (^DJI 0.67%) added 0.8%. Both indexes are up roughly 11% so far this year.
Second-quarter earnings season is winding down, but there are still several key reports due out over the shortened trading week ahead, including from Dave & Buster's (PLAY 1.64%), Finisar (FNSR), and Kroger (KR 0.64%). Here's what to look for in those announcements.
Dave & Buster's growth plan
Dave & Buster's posts its results after the market closes on Tuesday, and expectations are high that the food and entertainment specialist will have good news for investors. After all, its last quarterly check-in showed a healthy 16% spike in revenue as net income jumped 39%. It was the company's eleventh straight time beating consensus estimates.
Image source: Getty Images.
This week, investors will be watching the chain's comparable-store sales growth, which slipped to a 2% pace from 3% in the prior quarter. Yes, Dave & Buster's still outpaced the industry, but another slowdown would put pressure on its aggressive expansion plans.
In any case, look for CEO Steve King to discuss guidance for new store openings. The company in June said it hopes to launch 12 new locations this year to pass 100 -- on the way to a long-term goal of at least 200 entertainment complexes across the U.S. and Canada.
Finisar forecast
Finisar's stock hasn't moved much in the three months since its last quarterly posting. That announcement included a worrying decline in sales and profitably, but investors, instead, latched on to the potential that Finisar's products might find their way into Apple's newest iPhone model. CEO Jerry Rawls said the company expects to ship significant volumes of its 3D sensing tech beginning in the fiscal second quarter, mostly to a single large client. "We're engaged with a number of customers," Rawls explained, "but short-term revenue is going to be predominantly from one."
As for the current quarter, Finisar forecast revenue of between $330 million and $350 million and earnings of $0.40 per share at the midpoint of guidance. Those predictions imply roughly no growth in either the top or bottom line. Yet just as they did in June, investors will likely focus on the management team's new operating outlook and whether that confirms a broadening market opportunity for Finisar's communication components.
Kroger's customer traffic
Kroger is in the toughest operating environment it has experienced in over a decade. The grocery-store-chain's sales growth has plunged from the 5% or better rate that investors witnessed in 2015 to roughly flat today. And while some of that drop can be pinned on temporary factors like price deflation, part of it is being driven by rising competitive threats.
The company in June posted 0.2% lower comps as management suggested they could be losing market share after accounting for non-traditional grocery store retailing spots.
Chart by author. Data source: Kroger financial filings.
In response to the challenge, CEO Rodney McMullen and his team vowed to cut prices in a move that should keep rivals at bay. The good news is Kroger has plenty of experience in this kind of fight. Its business is well positioned to compete on the basis of price, even for an extended period.
The trade-off will be lower profits, though. In June, Kroger confirmed its outlook calling for minor comps gains for the full fiscal year, but dramatically scaled back its earnings target to well below management's long-term goal.
