If the recession is getting smaller and smaller in the rearview mirror, why did the country's unemployment rate go up to 9.8% last week?

It's not just that, of course. I had no problem over the weekend bringing up several companies that are projected to post lower quarterly earnings this week than they did a year ago.

Thankfully, they're the exceptions and not the rule. Let's go over seven publicly traded companies that are expected to stand tall this week by posting year-over-year improvement on the bottom line.


Latest Quarter's EPS (estimated)

Year-Ago Quarter's EPS

Costco (Nasdaq: COST) $0.69 $0.60
Pep Boys (NYSE: PBY) $0.08 $0.05
AutoZone (NYSE: AZO) $3.40 $2.82
Vail Resorts (NYSE: MTN) ($1.10) ($1.14)
SAIC (NYSE: SAI) $0.35 $0.34
lululemon athletica (Nasdaq: LULU) $0.25 $0.20
Pall (NYSE: PLL) $0.50 $0.40

Source: Thomson Reuters.

Clearing the table
Let's start at the top with Costco.

The warehouse club operator may not be perfect, but Costco's model is as close as you can get to a recession-proof niche. When times are tight, thrifty shoppers flock to the club's bulk-sized savings. When the economy's humming along, bargain seekers still come out in droves, yet so do the small caterers and indie restaurateurs that are trying to cut out the foodservice intermediaries.

Pep Boys and AutoZone are leading retailers of auto parts. This seemed like a layup during the economic downturn, as drivers held back on trading in their aging cars. The choice to personally maintain older cars kept the registers ringing at most of the auto parts chains.

Why are Pep Boys and AutoZone still growing? New auto sales revved back during last summer's Cash for Clunkers campaign. However, folks are still flocking to AutoZone for new wiper blades and replacing their tires at Pep Boys. It will be interesting to see if the auto parts industry has to eventually step on the brake.

Vail Resorts runs several ski destinations in Colorado. This past quarter is seasonally forgettable for Vail. It's too cold for the golfers and hikers. There's no snow for the skiers and boarders. It's all about cost containment at Vail during this seasonal lull, and it's encouraging to see a narrower deficit being targeted, even if it's not much of a narrowing.

SAIC is a military contractor. This may seem like budgetary strapped times, but SAIC nabbed four new contracts last week, including a deal to update border protection and an enterprise applications pact with NASA.

Well-to-do yoga moms know all about lululemon athletica. The Canadian retailer of high-end athletic apparel for women is setting up camp in affluent suburban shopping malls. It's one of the four retail stocks that I recommended last week. Revenue climbed 56% in its previous quarter, fueled by a jaw-dropping 31% spike in comps. Earnings more than doubled.

The pros aren't expecting the same kind of fireworks this time around. They see earnings inching 25% higher on a 41% top-line spike. Then again, analysts have sorely underestimated lululemon's profit potential over the past year. When we're pitting wealthy yoga buffs against Wall Street veterans, go with the ones striking the meditative poses.

Finally, we have Pall. Analysts are banking on the filtration specialist coming through with a quarterly profit of $0.50 a share. It earned just $0.40 a share during the same period a year ago.

Cross those fingers, but know the fundamentals
Investors in these seven stocks have a right to be excited. They are all improving their financial situations. They are worthy of the gains that the market rally has bestowed upon them over the past year.

I wouldn't be uncomfortable owning any of these companies. They're doing the right thing, regardless of Mr. Market's mood swings.

The expectations may be high, but these seven stocks wouldn't have it any other way.

Are you a buyer or a seller of stocks these days? Share your strategy in the comment box below.

Costco and SAIC are Motley Fool Inside Value selections. Costco is a Motley Fool Stock Advisor recommendation. Vail Resorts is a Motley Fool Hidden Gems pick. The Fool owns shares of Costco and Vail Resorts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz prefers to look at the bright side of life -- and strife. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.