Earnings This Week: Nike, Micron and Carnival

Earnings calendar: June 26 – 30

The US calendar is headlined by athleisure giant Nike, pharmacist Walgreens Boots and memory chipmaker Micron. UK markets will be keeping an eye on payments company Wise and online celebration card firm Moonpig. Dual-listed cruise line operator Carnival is also pencilled-in.

The European calendar includes results out from Swedish clothing brand H&M and French caterer and facilities manager Sodexo.

Below is a calendar with all the key earnings we are watching this week:

Carnival stock: Q2 earnings preview

The rally we have seen this year may have been driven by tech stocks, but Carnival has been the fourth best performer in the S&P 500 this year and the two other big cruise line operators – Norwegian Cruise Line and Royal Caribbean Cruises – have also booked strong gains. While some forms of travel have returned to pre-pandemic levels, the cruise industry is still in recovery mode. Carnival has been recovering faster than expected this year and sales are pretty much back to 2019-levels and likely to surpass them considering bookings have hit all-time highs, bringing in record deposits and helping it to start generating cash again to remove the risks attached to cash burn. Earnings are taking longer to recover but Carnival is on the right path. Adjusted Ebitda, a key metric, is expected to turn to a $659.4 million profit from a hefty $928 million loss the year before – marking the second consecutive quarter of positive earnings. However, Carnival is still in the red at the bottom-line with analysts anticipating a net loss of $435.4 million, although that would still represent significant progress compared to the $1.8 billion loss seen the year before. Carnival has said it plans to operate at 100% occupancy and is expecting a bumper summer. The outlook for the third quarter will be influential and markets are expecting a big jump considering they are looking for adjusted Ebitda of $2.09 billion!

Walgreens stock: Q3 earnings preview

Walgreens Boots Alliance is set to reach a turning point this quarter, with earnings to return to growth for the first time in over a year. Wall Street believes adjusted EPS will rise 11.8% from the year before to $1.07. The company is currently targeting adjusted EPS of $4.45 to $4.65 over the full year, which would be down some 11% as it faces its last year of tough comparatives from when demand rose during Covid-19. Attention will be paid on the US Healthcare business, which remains in the red but is a vital part of its strategy. Any signs it is accelerating its path to profitability would be welcome. Cost-cutting efforts should benefit margins and recent disposals has freed up capital that it can use to propel the Healthcare unit forward or pay down debt.

Micron stock: Q3 earnings preview

Micron said in the last quarter that it believed it was getting over the worst of its problems as an oversupply in chips eases, vowing that it was close to returning to sequential revenue growth as customer inventory levels normalise. Wall Street forecasts Micron will report revenue of $3.69 billion, flat from what we saw in the previous quarter. Markets think fourth quarter sales will also be flat, suggesting there is doubt over the short-term recovery potential. While Micron is looking for sequential growth, there is no escaping that sales this quarter are still set to be down some 57% from last year! Micron may be able to impress if it can show sequential improvements this quarter and next, while cost-cutting efforts could help it beat at the bottom-line. The adjusted loss per share is forecast to come in at $1.58, narrowing from $2.59 last year. Micron shares have risen over 31% this year as markets bet on its recovery potential and become infatuated with chip stocks, but there are headwinds ahead. China’s ban on some Micron chips exposes over 10% of its sales to major risk and could derail its efforts to return to growth. News that it plans to be among a raft of US companies to invest in India following a recent visit to the US by Indian prime minister Narendra Modi could be an additional talking point.

Nike stock: Q4 earnings preview

Demand for premium athleisure wear has remained strong in a challenging time for the wider retail space, although Nike has struggled to protect its bottom-line in the inflationary environment. Wall Street forecasts Nike will report a 2.7% year-on-year rise in revenue to $12.6 billion in the fourth quarter. Adjusted EPS is expected to drop 26% to $0.67. That trend played out across the whole year, with Nike set to report 9% annual revenue growth and a 13.6% fall in earnings. It is important to remember that earnings remain far above pre-pandemic levels and markets hope it can return to growth in the new financial year as comparatives are ironed out. The onus will be on the outlook, with hopes underpinned that a recovery in China can counter a slowdown in growth in other markets. However, China’s recovery has been lacklustre so far. Wall Street forecasts Nike can achieve 6.5% sales growth and increase adjusted EPS by over 20% in the coming 12 months.