Earnings Week Ahead: AutoZone, Campbell Soup, Lululemon and Broadcom in Focus
Tuesday (December 7)
IN THE SPOTLIGHT: AUTOZONE
The Memphis, Tennessee-based auto parts retailer AutoZone is expected to report earnings per share of $20.78 in the fiscal first quarter, which represents year-over-year growth of about 12% from $18.61 per share seen in the same period a year ago.
The company, which is a major retailer and distributor of automotive replacement parts and accessories, is on track to beat earnings per share estimates again after having beaten it for 12 consecutive quarters. The company is expected to post revenue growth of about 6% to $3.33 billion.
The company is expected to earn $97.73 per share and generate $14.81 billion in revenue for the entire fiscal year, according to Zacks Research. These results demonstrate increases of 2.67 % and 1.22 % over last year, respectively.
“We see AutoZone (AZO) as a high-quality retailer with the ability to compound earnings/FCF growth over time. While not immune to a tougher macro backdrop (fewer miles driven), we believe AZO is best positioned through any recession given its leading exposure to the more defensive DIY segment (~80% of sales),” noted Simeon Gutman, equity analyst at Morgan Stanley.
“In addition, its DIFM growth was accelerating pre-COVID-19 and we think it can gain more share in that segment going forward. In our view, ongoing share gains coupled with solid expense management should allow AZO to overcome headwinds from less driving in the near- to medium-term. These advantages seem priced in currently.”
Wednesday (December 8)
Thursday (December 9)
IN THE SPOTLIGHT: LULULEMON ATHLETICA, BROADCOM
LULULEMON: The Vancouver-based healthy lifestyle-inspired athletic retailer is expected to report its fiscal third-quarter earnings of $1.40 per share, which represents year-over-year growth of over 20% from $1.16 per share seen in the same period a year ago.
The apparel retailer would post year-over-year sales growth of about 28% to $1.43 billion. In the last two years, the company has beaten earnings per share (EPS) estimates most of the time.
Sales are expected to be $1.4-$1.43 billion in the third quarter of fiscal 2021, representing a two-year CAGR of 24-25%. The gross margin is expected to increase 50-100bps compared to the second quarter of fiscal 2019. The company expects adjusted earnings to be between $1.33 and $1.38 per share, compared with $1.16 in the prior-year quarter and 96 cents in the third quarter of fiscal 2019, according to ZACKS Research.
Net revenues are expected to reach $6.19-$6.26 billion for fiscal 2021 compared with $5.83-$5.91 billion earlier. Earnings per share will be $7.38-$7.48 versus $6.73-$6.86 previously mentioned.
“Lululemon Athletica (LULU) is a long-term topline grower, supported by compelling secular tailwinds (e.g., performance/athleisure focus), a market share gain opportunity, & credible future revenue driver (e.g., international expansion, digital growth, & product innovation/expansion into new categories). The company’s recent MIRROR acquisition offers both revenue & profitability upside, as reflected in our bull case,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.
“LULU dominates the NA athletic yoga apparel category due to its unique brand positioning & fashionable products. Covid accelerated consumers health & wellness focus & fashion casualization, both of which should benefit LULU.”
BROADCOM: The chipmaker and software infrastructure supplier is expected to report its fiscal fourth-quarter earnings of $7.74 per share, which represents year-over-year growth of over 21% from $6.35 per share seen in the same period a year ago. The semiconductor manufacturer would post revenue growth of nearly 14% to $7.35 billion.
Friday (December 10)
No major earnings are scheduled for release.