Stocks zigged and zagged in their first week of 2019 trading to continue the volatility that hurt most investors' portfolios over the past few months. But indexes ended on a positive note, with both the Dow Jones Industrial Average (^DJI -0.25%) and the S&P 500 (^GSPC 0.17%) gaining over 3% on Friday to finish the week slightly higher.
Most individual stocks will follow those broader market swings, but shareholders of Constellation Brands (STZ 0.11%), Lennar Homes (LEN -0.17%), and Bed Bath & Beyond (BBBY) have more reasons to expect volatility in the coming week, as these companies issue their latest quarterly earnings results. Below, we'll look at what investors can expect from these highly anticipated reports.
Constellation Brands' beer sales
Check out the latest Constellation Brands earnings call transcript.
Alcoholic-beverage giant Constellation Brands will announce its results before the market opens on Wednesday. It trailed the market by a wide margin in 2018, but not because of any major business concerns. On the contrary, its core beer segment is on pace to rise by double digits, thanks to robust demand for its premium imported franchises like Corona, Modelo, and Pacifico.
Constellation Brands has directed more cash toward supporting these brands with advertising lately, and marketing costs also have spiked as the company launched the first major addition to the Corona franchise in decades. As a result, investors will want to see evidence that the company is getting enough of a return on its investment through rising beer sales and higher average selling prices.
Shareholders will be listening for updates on Constellation Brands' major move in the cannabis space, too, following its $4 billion equity investment in Canopy Growth. That purchase gave the company about a 35% stake in the marijuana producer, but executives have the option to boost it to over 50% if they like what they see as the industry matures.
Lennar Homes' outlook
Check out the latest Lennar earnings call transcript.
Homebuilders have been among the hardest-hit stocks during the recent market volatility as investors worry about weakening demand in that key economic niche. That trend sets up an important fourth-quarter earnings announcement from Lennar on Wednesday.
The leading homebuilder's last report included healthy sales growth and another uptick in average selling prices -- this time, to $415,000. The company notched other important wins, too, including the successful integration of its recent CalAtlantic acquisition. However, investors were more concerned with signs of a growth slowdown. Lennar's order backlog fell when compared to the prior quarter, and management said that economic data and rising interest rates may be contributing to weaker sales.
Investors will find out on Wednesday whether CEO Rick Beckwitt and his executive team still believe other key factors, like low unemployment and rising wages, will still support steady growth in the quarters to come or if Lennar will need to make strategic shifts in response to a potential cyclical downturn in the industry.
Bed Bath & Beyond's profitability
Check out the latest Bed Bath & Beyond earnings call transcript.
Judging by Bed Bath & Beyond's nearly 50% decline in 2018, investors aren't expecting much good news from the specialty retailer on Wednesday afternoon. Its last report was marked by weak sales and plunging earnings, after all, and helped send the stock to an 18-year low. Comparable-store sales fell by less than 1%, but the retailer had to take a promotional stance while spending aggressively in its digital segment. Those trends combined to push operating profit down to just $79 million, or 2.7% of sales, from $169 million, or 5.8% of sales, a year ago.
Executives in late September reduced their outlook for the full year and said sales should end up flat while earnings sink to about $2 per share. A more challenging holiday season might cause the company to underperform even that modest forecast.
However, the stock's movements this week likely will come down to what CEO Steven Temares and his team say about their wider outlook. The retailer had been hoping to return to earnings growth by 2020 but will likely update that prediction to account for actual results from the latest holiday shopping spike.