Stocks were mixed last week, as the Dow Jones Industrial Average (DJINDICES:^DJI) shed over 1% and the S&P 500 (SNPINDEX:^GSPC) rose by less than 0.5%. The indexes are both in solidly positive territory as the retailing sector prepares to welcome shoppers during its peak holiday shopping season.
In the meantime, there are several earnings reports on the way over the next few trading days that might drive bigger market moves. Let's take a closer look at a few highly anticipated announcements from this list, by Zoom Video Communications (NASDAQ:ZM), Best Buy (NYSE:BBY), and Dollar Tree (NASDAQ:DLTR).
1. Zoom's big contracts
Zoom shares have been sliding in the months following its late-August earnings report. Investors soured on the video communication specialist as sales growth slowed following soaring results during the earlier phases of the pandemic. But that trend could start to shift with its Monday announcement.
Sales in Q3 are expected to rise roughly 30%, which would mark Zoom's second straight quarter of over $1 billion in revenue. The company is likely to show solid earnings and cash flow results, too. But keep an eye on Zoom's customer growth, especially in its large contract niche. The company needs to expand quickly in this arena if its going to offset slowing growth in the online segment as people return to the workplace.
In the meantime, look for CEO Eric Yuan and his team to update shareholders on Zoom's short-term outlook. Heading into Monday's report, they had been predicting sales will rise roughly 50% to $4 billion for the full fiscal year.
2. Best Buy's holiday outlook
Retailing fans love following Best Buy's third quarter announcement since it usually occurs near the peak holiday shopping period. Set for Tuesday, just three days before Black Friday this year, that report promises to include some timely information about shopper demand and supply chain challenges.
Best Buy might announce a slight sales decline as it goes up against some unusually tough comparisons with surging demand a year ago. Revenue is predicted to drop around 2% this quarter, year-over-year. But look for executives to highlight the two-year growth pace, which describes a business that's seeing fantastic gains. Sales last quarter were up 24% on a two-year basis, and operating income doubled .
All eyes on Tuesday will be on the holiday outlook that Best Buy issues just a few days before the traditional start of the peak shopping season for consumer electronics and home gadgets. A bullish forecast might help shares continue outpacing the market, especially if profit margins continue marching toward 10% of sales.
3. Dollar Tree's strategic plans
Dollar Tree's stock is surging ahead of its Tuesday earnings announcement. But that boost has little to do with that upcoming report. Instead, the retailer sparked new Wall Street interest as an activist investor takes a huge state in the business.
Mantle Ridge is reportedly agitating for management to make some sweeping changes to its value-based selling approach, including by offering a wider selection of higher-priced products. That strategy has worked well for some other retailers lately, including Five Below. But it could risk alienating customers.
Executives should address any evolving plans in Tuesday's announcement, along with issuing a more concrete outlook for the holiday shopping season ahead. But the retailer's ability to generate solid returns for investors might depend on how well the management team can navigate through this strategic shake-up into 2022.