Strong Retail Earnings & Claims; What About Jackson Hole?

Thursday, August 24th, 2017

As monetary policy chieftains gather in Jackson Hole, WY today for the annual Central Bank Symposium and new Initial Jobless Claims hit the tape, we also see a few more earnings results worthy of our attention in the Retail industry, and the good news is there’s good news:

Tiffany’s TIF , a household name synonymous with American wealth, posted better-than-expected results in this morning’s pre-market, beating on the bottom-line by 4 cents to 92 cents per share, a year-over-year increase of 9.5%. Quarterly sales of $960 million topped the $933 million expected, representing 3% growth from a year ago. Although comps were down 2%, improved strength in the Asia-Pacific region and moving more wholesale diamonds helped Tiffany’s in the quarter. Shares are up roughly 3% in early trading.

Bargain retailer Dollar Tree DLTR impressed the market this morning with earnings and revenue beats for its fiscal Q2: 99 cents per share easily outpaced the 87 cents expected, up 37.5% year over year. Sales of $5.28 billion topped the Zacks consensus by $50 million in the quarter, up 5.7% year over year. Same-store sales of 2.4% represent a combination 3.9% growth in Dollar Tree stores and 1% growth in Family Dollar. Shares of the Zacks Rank #3 (Hold) company with a Zacks Style Score of A are up strongly in the pre-market, +9%.

And apparel retailer Abercrombie & Fitch ANF is up a whopping 15% ahead of the opening bell today on narrower-than expected losses for its quarter. Bottom line losses of 23 cents per share was much improved from the -34 cents expected. Revenues of $779.3 million outpaced the $761.6 million we had been looking for. This is the first quarter in the last five where Abercrombie has actually topped earnings estimates.

Jobless Claims Remain Strong

Staying squarely within the 225-250K range of Initial Jobless Claims claims last week, a new read of 234K is a modest bump-up from the unrevised 232K from the previous week. Continuing claims of 1.954 million is also roughly unched for the week. While jobs growth has certainly moderated from levels we had been seeing over the past couple years, company layoffs and corporations moving offshore have been occurring less often of late, helping keep Americans relatively gainfully employed.

Jackson Hole Commences

For the next two days, Fed presidents and other monetary authorities gather to discuss global economic policies in light of Eurozone growth (European Central Bank [ECB] President Mario Draghi is scheduled to attend for the first time in 3 years) and adjustments in China and elsewhere in Asia. In the U.S., with employment looking strong and inflation yet to seep into the domestic economy, Fed Reserve Chair Janet Yellen and her cohorts have a lot to discuss ahead of their Fed meeting next month, and whether they will consider raising interest rates another quarter-percent.

Draghi’s attendance is already generating interest; last time he attended Jackson Hole he foreshadowed the major program of euro buybacks (similar to the U.S.’s QE program under Fed Chair Bernanke’s regime) that ushered in very accommodative monetary policy that gained traction in the Eurozone since. What the ECB President has to say this time around will draw plenty of attention. Does he plan to tighten asset purchases at the next ECB, also coming next month? Stay tuned.

Mark Vickery

Senior Editor

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