3 recognizable companies are set to announce their quarterly reports this week. What should investors look for?
Lululemon:
Lululemon (LULU, Financial) is scheduled to announce its third quarter earnings report on Thursday before the market opens. The company is expected to post $0.38 earnings per share, down from $0.45 earnings per share the same quarter last year.
Lululemon was the topic of controversy earlier this year when the company had to recall a line of yoga pants for being too see-thru. As a result, Lululemon stock dropped 20% and the company lost $2 billion in value.
In addition, the company received some negative attention last year when founder Chip Wilson made controversial comments about the types of women who should and should not wear Lululemon yoga pants. Soon after, Wilson stepped down as CEO and sold half of his stock position.
However, Lululemon has become one of the fastest growing retail companies today, growing 17% in the last month alone. The company has become well positioned to dominate the health and wellness trend, which is booming right now.
New management has been diligently working to make positive changes on the company’s image, reputation, and performance. Many believe these efforts will start paying off soon.
Adobe:
Adobe (ADBE, Financial) is set to announce its fourth quarter earnings report and year-end earnings report on Thursday before the market opens. Adobe is forecasted to post $0.17 earnings per share, down from $0.18 earnings per share the same quarter a year prior.
On Cyber Monday this year, Adobe raked in about $2.65 billion in revenue from its online store, marking a 16% increase on a year-over-year basis. Furthermore, between Thanksgiving Day and Cyber Monday, Adobe’s total sales came out to $9.6 billion, marking a 20% growth on a year-over-year basis. The season’s total from November 1 to December 1 rose 14% on a year-over-year basis, reaching $37.9 billion in revenue.
In addition, Adobe just released a slew of new applications that connect iPad users with the company’s Creative Cloud subscription service.
RadioShack:
RadioShack (RSH, Financial) is scheduled to announce its third quarter earnings report on Thursday before the market opens. The company is expected to post a loss of $-1.03 per share, up from a loss of $-1.09 per share the same quarter last year.
RadioShack has been on the rocks this year and the only thing keeping them afloat was $250 million from lender Salus Capital. However, the relationship between the two companies recently went sour right before the crucial holiday shopping season, threatening RadioShack’s efforts to restructure its operations and avoid bankruptcy.
Earlier this year, Salus Capital rejected RadioShack’s proposal to shut down 1,100 locations, only allowing the company to close 200 locations. RadioShack recently reintroduced its plan to close 1,100 stores and has yet to receive a response from Salus Capital.
Salus Capital claims that RadioShack defaulted on its loan when the electronic retailer secured a separate credit line in October. On the other hand, RadioShack is claiming that Salus Capital is blocking its efforts to close 1,100 locations and save about $200 million in costs.
It will be interesting to see how these factors will affect Lululemon, Adobe, and RadioShack’s numbers and how analysts will respond.
