January is a big month for investors in retail stocks. Not only are the businesses seeing elevated customer traffic tied to the holiday season crush, but the start of the year is when companies issue financial updates that cover the peak period around Christmas. That report often determines whether a company will reach its ambitious annual growth targets.
With those high stakes in mind, let's look at three major retail stocks that will issue their holiday season updates in the next few weeks.
iRobot has a lot to prove
2019 was a brutal year for iRobot (NASDAQ:IRBT), which was slammed by tariffs on its robotic cleaning devices that ended up reshaping its entire industry. After soaring into the $1 billion annual sales club in the prior year, sales growth collapsed, with revenue even falling 7% in the fiscal third quarter.
CEO Colin Angle and his team responded by slashing prices just ahead of the holidays hoping to protect market share so that the company can be positioned for a rebound in 2020. But the major risks around that gamble mean investors will be closely watching for official updates from iRobot in January.
That update will likely happen on or before Jan. 14, when management holds a presentation at an investor conference. Shareholders can expect plenty of volatility in the stock around those mid-quarter comments, given the high stakes involved.
Costco keeps winning
Costco (NASDAQ:COST) is one of just a few major retailers that still issue monthly sales updates, and this next one could easily move the stock. On Jan. 8, the warehouse retailer will announce results for the all-important month of December that should set the tone for its fiscal second-quarter announcement in early March.
If recent history is any guide, Costco will likely have good news to report. The retailer's last quarterly update showed accelerating customer traffic and record renewal rates among its members. The chain's results have even been lifted by a few splashy single purchases, too, including a $400,000 diamond ring. These metrics reflect the increasing value that subscribers are getting from their memberships, which points to a likely record December haul for the warehouse shopping leader.
Target is ready
If you asked investors in late December last year which stocks might double over the next 12 months, Target (NYSE:TGT) probably wouldn't have made the list. Yet that's exactly what happened as the retailing chain announced some of its fastest sales growth in a decade. Target's transition to multichannel selling even helped push operating margin higher, since customers are showing a real willingness to pay up for the convenience of ultra-fast fulfillment options like same-day delivery and in-store pickup.
We'll find out on Jan.15, when Target announces its holiday season sales results, whether those wins allowed the company to continue capturing share against peers like Walmart during the ultra-competitive December weeks. That report will likely focus on revenue trends rather than profitability, so investors might want to withhold their judgment until seeing Target's full-year results in early March. But the soaring stock price suggests Wall Street is expecting good news to follow the retailer's blockbuster third-quarter earnings report from late November.