Stocks fell hard last week, as both the Dow Jones Industrial Average (^DJI 0.54%) and the S&P 500 (^GSPC 1.18%) shed over 2%. The indexes are near their lows for the year, down 9% and 12%, respectively.
While geopolitical worries will continue affecting markets, earnings season will cause more swings in companies with fourth-quarter announcements on the way. Vail Resorts (MTN 1.06%), GameStop (GME 8.03%), and FedEx (FDX 0.16%) are among the most anticipated earnings reports to watch.
Let's take a closer look.
Image source: Getty Images.
1. Vail Resorts' visitor trends
Thanks to a midseason update, we already know that Vail Resorts had a brutal start to its peak ski season. The rise of the omicron variant combined with poor weather to push ski visits down through late December, management said in mid-January. Traffic at resorts was even lower compared to late 2020, when COVID-19 was canceling nearly all travel.
Vail's earnings report on Monday afternoon will show whether that tough start gave way to better demand trends in January and February. Watch ski lift volumes for signs of that rebound, with stronger growth likely pushing up categories like dining and ski school trips.
Vail's long-term strategy involves pouring cash into upgrading its resorts to offer a more premium resort experience. That's a key reason to watch cash flow, which might be pressured by a second straight year of soft demand during peak ski season.
2. GameStop's 2022 outlook
Its meme stock status made GameStop one of the more volatile stocks in the past year, but Thursday's earnings announcement is an opportunity to bring hard numbers into the conversation. The video game retailer's shares are down so far in 2022, partly because meme stocks have lost some of their luster. There are more practical worries about the business, too, after Best Buy indicated recently that the video game niche slowed significantly over the holiday season.
We'll find out on Thursday whether that slump hurt GameStop's recovery. Heading into the announcement, most investors are looking for sales to rise by about 4% to $2.2 billion in the chain's biggest quarter of the year.
Meanwhile, watch management's new outlook for evidence that sustainable growth is on the way. GameStop struggled to deliver reliably strong sales gains even before the industry shifted into a mostly digital selling model. Investors are right to wonder whether the retailer can do any better as gamers increasingly buy directly from publishers and console platforms.
3. FedEx's profitability
FedEx announces its fiscal third-quarter results on Thursday afternoon, and expectations are modest heading into the announcement. The package delivery giant probably saw robust demand as more commerce occurred online in late 2021. However, those gains will be offset by rising transportation costs, higher wages, and staffing shortages. The wider Q3 results will depend on how well FedEx managed through those challenges.
FDX Operating Margin (TTM) data by YCharts
CEO Frederick Smith and his team might issue a conservative 2022 outlook especially for FedEx's European business. That segment might see significant pressures from economic disruptions tied to geopolitical strife.
But FedEx is still likely to keep spending aggressively on improving its global infrastructure, and returning cash to shareholders through dividends and buybacks, in the year ahead.
