Investors have struggled through bear market conditions in 2022, and it's far from clear whether the worst is over for the stock market. Even as market participants try to anticipate whether the economic slowdown will blossom into a full-blown recession and what impact it could have on financial markets, many hope for the same kind of year-end rally that has materialized in many years.
Although earnings season has largely ended, some high-profile stocks will share their latest financial results with investors over the course of this week. Among those companies issuing reports, Snowflake (SNOW -0.26%) and Dollar General (DG 0.82%) will give shareholders a comprehensive view of the current state of the economy and how it's affecting businesses of different types.
Will Snowflake's outlook be cloudy or clear?
Snowflake is set to release its latest financial report on Wednesday, Nov. 30, after the market closes for the day. Investors are anxious to see whether its fiscal third-quarter report for the period ending Oct. 31 will show continued growth or a potential slowdown for its data cloud business.
Snowflake's previous results for the quarter that ended July 31 were extraordinarily good. Product revenue soared 83% year over year to $466 million, and the company saw net revenue retention remain high at 171%. Adjusted free cash flow climbed sharply, and Snowflake had 246 customers producing at least $1 million in annualized product revenue.
Moreover, Snowflake sees its growth rates remaining high well into the future. For the full fiscal year, the company anticipated product revenue to grow 67% to 68% to roughly $1.91 billion. Investors now expect even more from the company, pressing for Snowflake to get above the 70% mark for top-line growth.
Investors seem to be concerned about whether demand for Snowflake's data cloud platform will remain as robust as it has in the past. In particular, with other software-as-a-service (SaaS) providers having reported signs of slowing spending from their respective client bases, it's an open question whether Snowflake could see the same kind of drop-off in enterprise spending. With the stock down 60% from its highs, there's room for a rebound in Snowflake shares if the news proves to be good.
Can Dollar General cash in on bargain-hunting shoppers?
Dollar General is also set to report its latest quarterly results this week, with the dollar store retailer laying it out on the table on Thursday, Dec. 1, before the market opens.
Dollar General's second-quarter results for the period ended July 29 showed solid performance. Net revenue rose 9% year over year to $9.4 billion, with same-store sales climbing 4.6%. Earnings got a slightly larger 11% boost from year-ago levels to $2.98 per share, and the retailer reported slight increases in customer traffic and growing market share in consumable products. Inventory levels rose dramatically, but the company projected full-year sales growth of 11% and same-store sales gains in the 4% to 4.5% range.
Investors have high hopes for the discount retailer's financial release, projecting double-digit percentage gains in both sales and profits. After seeing a slump in 2021 following an extremely good year in 2020, Dollar General is now poised to resume its former growth path and demonstrate its ability to woo new shoppers who are looking for more value than they can get from higher-priced department store retailers.
While Snowflake gauges demand for business-to-business services, Dollar General will provide a key look at the health of the consumer. With inflation still putting pressure on personal finances, the trends Dollar General identifies will be relevant to the entire consumer economy.
