Please ensure Javascript is enabled for purposes of website accessibility

3 Things to Watch in the Stock Market This Week

By Demitri Kalogeropoulos - Apr 4, 2021 at 7:50AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Constellation Brands is one of several stocks set to announce earnings results over the next few trading days.

Stocks rose in a shortened trading week last week. Both the Dow Jones Industrial Average (^DJI 1.34%) and the S&P 500 (^GSPC 2.02%) gained over 1% and are sitting at all-time highs as we begin the second quarter of 2021.

Several popular companies will announce earnings results over the next few days. That list includes Constellation Brands (STZ 0.61%), Levi Strauss (LEVI 0.40%), and Simply Good Foods (SMPL 3.21%), whose reports we'll preview.

A man buys beer at a grocery store.

Image source: Getty Images.

1. Constellation Brands' outlook

Constellation Brands will close out its fiscal year with a fourth-quarter earnings report on Thursday, and investors are hoping to hear good news from the alcoholic-beverage giant. Its last quarterly update showed surprisingly strong sales growth as robust home beer consumption offset slumping demand at bars and restaurants. Along with Boston Beer, Constellation Brands accounted for most of the industry's growth in 2020.

This week's report should contain more evidence of strong growth in imported beer brands like Modelo and Pacifico, along with modest success in the company's Corona hard-seltzer launch that competes directly with Boston Beer's Truly franchise. Sales gains will slow compared with last quarter because of shipping and inventory shifts, but Constellation Brands' consumption metric should still be solidly positive.

Yet the stock's movement might depend on the fiscal 2022 outlook that CEO Bill Newlands and his team issue on Thursday. That forecast might include optimism for the beer division and the newly transformed wine and spirits segment, along with some potentially big opportunities in the recreational-marijuana space.

2. Simply Good Foods' organic sales

Simply Good Foods' stock has outperformed the market's rally since the COVID-19 lows, which sets a high bar for its Wednesday second-quarter earnings report. Heading into the announcement, most investors are expecting the health-focused food and snack specialist to post strong growth, with sales likely to land at around $230 million.

Management's recent acquisition of the Quest Nutrition franchise might add noise to that figure, but CEO Joseph Scalzo and his team should detail their organic sales estimate this week, too. Growth by that metric was in the mid-single digits, the company said in early January.

For the stock to keep rallying deeper into 2021, Simply Good Foods will need to show steady demand in its Atkins and Quest brands that continues even as the pandemic threat declines. And investors are hoping that profitability will improve thanks to the higher sales base. Look for management to issue more-detailed guidance on both these figures as part of Wednesday's earnings report.

3. Levi Strauss' 2021 forecast

Jeanswear specialist Levi Strauss will announce its fiscal first-quarter results on Thursday afternoon. The stock jumped in the past year, but many investors see an opportunity for even bigger gains ahead.

That bullish thesis depends on the company's further differentiating its small but quickly growing e-commerce platform. Levi Strauss is also aiming to diversify into complementary categories outside its core denim focus. Progress in these two areas might remove some of the sting from weak sales, which are expected to fall by 17% this quarter compared with last quarter's 12% slump.

The stock's price rally in recent months means investors will be looking for management to issue a positive outlook for 2021 following last year's 23% sales decline. Watch executives' inventory update for a clue on which way demand and pricing trends are heading after a tough holiday season.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Constellation Brands, Inc. Stock Quote
Constellation Brands, Inc.
$250.95 (0.61%) $1.53
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$32,654.59 (1.34%) $431.17
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$4,088.85 (2.02%) $80.84
The Boston Beer Company, Inc. Stock Quote
The Boston Beer Company, Inc.
$356.52 (0.57%) $2.02
The Simply Good Foods Company Stock Quote
The Simply Good Foods Company
$40.13 (3.21%) $1.25
Levi Strauss & Co. Stock Quote
Levi Strauss & Co.
$17.61 (0.40%) $0.07

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.