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3 Things to Watch in the Stock Market This Week

By Demitri Kalogeropoulos - Mar 8, 2020 at 9:02AM

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Adobe is one of several big-name stocks set to make moves over the next few trading days.

Investors endured another week of intense volatility last week, but stocks ended up rising. The Dow Jones Industrial Average (^DJI 2.68%) gained 0.6% and the S&P 500 (^GSPC 3.06%) rose 1.8% to leave both indexes down by nearly 10% so far in 2020.

Coronavirus headlines will likely grab Wall Street's attention for the coming week, but there are also a few key earnings reports on the docket. Investors will be watching the metrics from Ulta Beauty (ULTA 3.69%), Thor Industries (THO 3.75%), and Adobe (ADBE 2.94%).

A woman having her hair cut at a salon.

Image source: Getty Images.

Ulta Beauty's makeup sales

Investors have a few good reasons to follow Ulta Beauty's earnings report on Thursday, given that the spa and beauty products retailer is struggling to protect its growth profile. Sales gains slowed to just 3% last quarter after jumping 6% in the prior quarter. Management blamed a slump in the wider makeup industry, which turned negative in 2019 after expanding at a robust clip for several years.

We'll find out on Thursday whether trends continued to worsen over the holiday shopping period. Even if they did, look for CEO Mary Dillon and her team to highlight Ulta's expanding market share and its increasing influence in the e-commerce sales channel.

The company might also have some good news to report on the earnings front, since it entered the period with a slim inventory that was packed with fresh merchandise. Yet the stock's move this week will likely depend on what the retailer has to say about the potential for further sales and earnings growth ahead in 2020.

Thor Industries' backlog

Recreational vehicle specialist Thor Industries will announce its latest earnings results on Monday. Investors liked what they heard at its last quarterly outing, even though the company struggled with declining demand in its core U.S. market. Thor's results were also hurt by a shift toward lower-priced RV models in its motorized division.

This week, look for management to spend some time discussing how the company is adjusting to shifting demand patterns while still investing in its production infrastructure.

Investors are also hoping that Thor's recent acquisition of a major European franchise will help offset the market share losses they've seen in recent quarters to rival Winnebago . The updated backlog figures, meanwhile, will give shareholders a good indication about how long they can expect sales to continue falling in the core U.S. segment.

Adobe's updated outlook

Adobe stock enjoyed a stellar 2019, and investors are hoping that momentum might continue when it kicks off its new fiscal year on Thursday afternoon. The software giant trounced management's targets last quarter to wrap up its fourth consecutive year of growth of at least 20%. Better yet, the shift toward a software-as-a-service model is having a clear impact on the finances, with operating cash flow surging to nearly $1.4 billion from $1.1 billion in the fourth quarter .

CEO Shantanu Narayen and his team said in December that fiscal 2020 sales should cross $13 billion, including first quarter revenue of just over $3 billion. Earnings should land at around $7.40 per share, they predicted. Yet both of those forecasts could change significantly on Thursday, as management incorporates the latest software demand and economic trends into their outlook.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$31,500.68 (2.68%) $823.32
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,911.74 (3.06%) $116.01
Adobe Inc. Stock Quote
Adobe Inc.
$387.72 (2.94%) $11.08
Ulta Beauty, Inc. Stock Quote
Ulta Beauty, Inc.
$410.54 (3.69%) $14.63
Thor Industries, Inc. Stock Quote
Thor Industries, Inc.
$79.40 (3.75%) $2.87

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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