Stocks slumped last week as investors grew nervous about the potential for increased global trade tensions. By Friday, both the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) had given up more than 5% to fall back into negative territory for the year.
Macroeconomic concerns might dominate broader market headlines for the shortened trading week ahead. But a few individual companies should see elevated volatility as they announce quarterly results.
Some of the biggest names set to post fresh numbers include lululemon athletica (NASDAQ:LULU), Constellation Brands (NYSE:STZ), and GameStop (NYSE:GME). Here's what investors can expect from these reports.
Lululemon's profit margin
Athletic-apparel specialist Lululemon posts its holiday earnings report after the market closes on Tuesday. Thanks to a post-holiday update by the management team in early January, investors already know it was a solid sales period.
A high-single-digit increase in comparable-store sales should drive revenue of between $905 million and $915 million, executives said at the time. This compares to their initial forecast of mid-single-digit comps and revenue ranging from $870 million to $885 million.
Yet the report will include important metrics for shareholders, including a look at whether profitability held up during the always-competitive holiday period. Gross margin improved by a full percentage point in the prior quarter, and another uptick will show that the brand continues to connect with yoga enthusiasts.
Meanwhile, look for Lululemon to update investors on its search for a new CEO; Laurent Potdevin departed abruptly, following behavior that the board of directors said violated the company's standards of conduct.
Constellation Brands' beer sales
Alcoholic beverage giant Constellation Brands hopes to extend its impressive stock price rally with quarterly results due out on Wednesday morning. The company has beaten -- and raised -- its profit outlook in each of its last three reports, and its current target calls for full-year earnings to reach $8.45 per share at the midpoint of guidance, up from $6.76 per share a year ago.
Booming demand for its beer portfolio should help, as CEO Rob Sands and his team expect the division, led by the Corona and Modelo brands, to expand by 10% for the year. Rising prices, meanwhile, should deliver operating income growth of between 18% and 19% and boost overall profitability.
Constellation Brands' smaller wine business has had a weaker year, and we'll find out on Wednesday whether recent marketing and pricing shifts helped get that division back on track. Investors should also receive updates on the company's aggressive capacity-expansion project: It's boosting production capabilities while bringing more pieces of the process, like glass manufacturing, under Constellation Brands' control.
Investors aren't expecting much good news from GameStop when it posts earnings on Wednesday afternoon. The specialty retailer's holiday-season sales update contained signs that it's struggling to pivot toward more sustainable business lines, as video game sales move online.
GameStop managed a solid 12% bounce in comparable-store sales in the period, management said, but that success was offset by slumping profitability and a large writedown tied to its new consumer tech segment.
GameStop still expects to meet its profit guidance of between $3.10 per share and $3.40 per share for fiscal 2017, which would leave its dividend, and that massive 10% yield, safe for now. Yet management may need to start prioritizing business investments over cash returns, especially if executives project a third straight year of falling earnings in 2018.
Demitrios Kalogeropoulos owns shares of GameStop. The Motley Fool owns shares of GameStop and has the following options: short April 2018 $18 calls on GameStop. The Motley Fool recommends Lululemon Athletica. The Motley Fool has a disclosure policy.