September is traditionally the worst month for stocks and the month ahead could be a doozy for investors. After a big run in July, the benchmark S&P 500 enters September having fallen 4% during August to below 4,000. If history is a guide, more pain can be expected for stocks in the coming weeks.
Against this backdrop, we’ll get earnings results in the coming week from a number of leading companies that include a national grocery retailer, well-known restaurant chain, electric vehicle maker, and the original meme stock.
Combined, the quarterly prints could help to set the tone for the month ahead. Earnings for the second quarter of this year haven’t been particularly strong, adding to the gloomy mood on Wall Street. With more than 90% of companies in the S&P 500 having reported, the earnings growth rate has been the lowest in nearly two years, according to data from FactSet. Can things turnaround in the coming days?
We’ll find out when these seven stocks report their earnings the week of Sept. 5.
|SWBI||Smith & Wesson||$13.47|
|PLAY||Dave & Buster’s||$40.90|
It’s been quite a year for Chinese electric vehicle maker Nio (NYSE:NIO). Since the spring, the Shanghai-based company has dealt with accounting issues that threatened its stock listing in the U.S., pursued a new listing of its shares in Singapore, grappled with the deaths of two staff members, faced a trademark lawsuit from European rival Volkswagen (OTCMKTS:VWAGY), and had its main manufacturing plant shut down by new Covid-19 lockdowns.
All the drama has pushed NIO stock down 42% this year. Management at Nio is looking ahead to better days now that its manufacturing hub in Shanghai is back up and running. Despite the shutdown of its operations in May and part of June, the company recently reported that it managed to deliver 10,052 cars in July, which was 27% more than it delivered a year earlier. Analysts expect Nio to report an earnings per share loss of 17 cents on revenues of $1.39 billion when it reports on Sept. 7.
Does it really matter what numbers GameStop (NYSE:GME) reports next week? Chances are that retail investors will bid the stock up no matter what. That’s certainly been the case the last few times that GameStop’s quarterly print has been made public. And with indications pointing to a resurgence in meme stock interest, GME stock could be poised for a pop.
So far this year, GME stock is down 26%. However, the stock enjoyed runs up as high as $42 a share on Aug. 8 and again on Aug. 16 as retail investors once again took a run at the heavily shorted video game retailer.
Wall Street analysts are expecting the company to report an earnings per share loss of 38 cents on revenues of $1.27 billion when it issues its latest print on Sept. 7.
Among technology stocks, San Francisco-based Asana (NYSE:ASAN) has taken some serious blows this year. After running up 447% from its October 2020 initial public offering to November of last year, the stock has crumbled 77% this year as investors flee unprofitable tech stocks. At its current share price of $17.30, ASAN stock is trading below its IPO price of $21.
A software company that sells a web-based and mobile work management platform designed to help companies organize, track, and manage workflows, Asana was co-founded by Dustin Moskovitz, who also co-founded Meta Platforms (NASDAQ:META). The company had an impressive pedigree and its focus on remote work was all the rage during the Covid-19 crisis. But with companies now focused on return-to-work policies, investors are abandoning Asana.
Analysts are calling for the company to report an earnings per share loss of 39 cents on revenues of $127.24 million on Sept. 7.
Speaking of stocks that thrived during the pandemic only to implode this year, electronic signature and document management company DocuSign (NASDAQ:DOCU) reports its latest earnings on Sept. 8. So far this year, DOCU stock has plunged 63%. Over the past 12 months, the stock has fallen 80%. It’s a big comedown for a company whose shares were trading at more than $310 a year ago. But with companies emerging from Covid-19 lockdowns, demand for DocuSign has waned.
The downward pressure led to DocuSign CEO Dan Springer resigning in June of this year. The CEO departure further shook confidence in DOCU stock, as did a recent downgrade by RBC Capital Markets.
A disappointing print next week could lead to further erosion in the company’s stock. For their part, analysts who cover DocuSign have forecast that the company will report earnings per share of 42 cents on revenues of $602.34 million.
Smith & Wesson (SWBI)
Firearms manufacturer Smith & Wesson (NASDAQ:SWBI) also reports results next week, and Wall Street is looking for the Springfield, Massachusetts-based company to report earnings per share of $1.57 on revenues amounting to $129.78 million. The maker of revolvers and hunting rifles has seen its stock fall this year amid broader market turmoil. Since January, SWBI stock has declined 25%. In the past year, the company’s share price has declined 45%.
The company most recently generated headlines after CEO Mark Smith refused to testify at a House Oversight Committee hearing alongside other top executives of weapons makers, and accused politicians and the media of stoking a surge in gun violence happening across the U.S. That situation led to a backlash against Smith & Wesson on social media. The company and its shareholders will no doubt be hoping that a positive earnings report will change the current narrative.
Dave & Buster’s (PLAY)
Restaurant chain Dave & Buster’s (NASDAQ:PLAY) is actually up this year, having gained 6%. While a 6% gain might seem modest, it is ways ahead of the S&P 500. Dave & Buster’s appears to be benefitting from economic reopening and families returning to in-person dining at its 147 locations in the U.S. and Canada.
PLAY stock jumped 24% after the company’s last earnings report showed solid growth on both the top and bottom lines. And, Dave & Buster’s announced plans to introduce new games and menu items at its franchise locations over the summer months, a move that could further bolster its earnings. The company also continues to add popular virtual reality attractions at its restaurants, which have helped to draw families. Analysts have Dave & Buster’s penciled in to report earnings per share of $1.07 on revenues of $432.91 million.
The week ends with a print from Kroger (NYSE:KR), the largest supermarket chain in the U.S. The Cincinnati-based company is also one of the biggest private sector employers in America with roughly 500,000 people on its payroll. Like most retailers, Kroger has been managing high rates of inflation this year and adjusting its prices accordingly. However, inflation running at a 40-year high hasn’t hurt the company, which sells consumer essentials that provide it with pricing power.
Year to date, KR stock is up 8%. The share price recently took a knock when it was revealed that famed investor Warren Buffett trimmed his holding in the company. Buffett didn’t comment on the reasons for his sale of the stock, but he remains the third-largest shareholder of the grocery store chain with a $2.5 billion stake. Kroger stock continues to be widely viewed as a good hedge against inflation in the current volatile market. Analysts expect Kroger to announce earnings per share of 77 cents on revenues of $34.25 billion.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.