Earnings This Week: FedEx, Autozone and Kingfisher

Corporate earnings calendar: September 18-22

The earnings calendar is quiet this week, with most of the attention on central banks with the Federal Reserve, Bank of England and Bank of Japan all making interest rate decisions.

Delivery giant FedEx, car parts seller Autozone, food processor General Mills and Olive Garden-owner Darden Restaurants. The only significant update due out of the UK is from B&Q and Screwfix-owner Kingfisher.

Below is a calendar outlining all the major earnings to watch out for this week:

FedEx stock: Q1 earnings preview

FedEx’s business remains under pressure, but this could be a turning point for the company following the fall in profits we saw in the recently-ended financial year.

Revenue is forecast to be down 5.8% from last year in the first quarter at $21.85 billion, marking the fourth consecutive quarter of declines. Volumes are set to fall at all three units, with FedEx Express and Freight forecast to be the biggest drags on the topline.

One potential upside could come from the collapse of Yellow Corp, which halted operations at the end of July and filed for bankruptcy in August. That will have left a sizeable hole in the ‘less-than-truckload’ market that carries goods for different customers on one truck. That could provide an opportunity for FedEx Freight to surprise on volumes, which is significant considering it is seeing the sharpest decline with analysts anticipating daily shipments will be down over 10% from last year.

On a brighter note, FedEx is expected to report an 8.6% rise in adjusted EPS to $3.74, marking the first growth in a year as comparatives iron-out and a sharper focus on costs improves margins, with FedEx attempting to shave $6 billion off its cost-base by fiscal 2027.

This will be the first set of results since John Dietrich was promoted from running Atlas Air Worldwide to chief financial officer at the start of August, having replaced Michael Lenz after he retired.

Autozone stock: Q4 earnings preview

Autozone, which is the leading retailer and distributor of replacement parts for vehicles across the Americas, has been a reliable winner for investors for well over a decade. The business has consistently grown and its share price has risen almost every year (it has only lost ground in seven of its 32-year history as a public company). Still, while it has remained on the right track in 2023, it has risen just 5% and has underperformed the broader market.

Autozone delivered its fastest growth at both the top and bottom lines in over a year in the last quarter, although it did miss its own targets because unfavourable weather deterred customers from its stores. It saw an improvement in weather conditions early on in the fourth quarter and this should not be as big a problem this time around.

Revenue is forecast to rise 5% from last year in the fourth quarter to $5.6 billion, with same store sales seen rising 2.5%. Adjusted EPS is expected to jump 11.1% to $45.00. Assuming it meets those consensus figures, Autozone is on course to report a 7% rise in annual sales and an 11.5% increase in full-year EPS.

Autozone had to adapt the rapidly-changing conditions brought on by the pandemic, but is now returning to its previous strategy as things normalise. This involves Autozone growing its commercial business, although higher used car prices are making it more difficult. Autozone is determined to accelerate growth, while its market-leading margins could also benefit now that inflationary pressures are moderating.

Keep an eye out for any news on its ongoing expansion in Mexico and Brazil, where it has around 800 stores that it expects to be a major contributor to its results for decades to come.

Kingfisher share price: H1 earnings preview

Kingfisher’s growth is succumbing to a more challenging environment as consumers tighten their belts, while profitability continues to suffer in the inflationary environment.

Revenue is expected to be up just 0.7% at £6.86 billion in the first half, with like-for-like sales forecast to fall 3%. Those consensus figures suggest there has been an, albeit very mild, improvement for Kingfisher in the second quarter compared to the first.

In the UK, Screwfix continues to lead the way when it comes to growth, countering softer conditions at B&Q. The cost-of-living crisis, rising mortgage rates and and the unwinding of demand seen in 2020 and 2021 could continue to have an impact as all of these could prompt customers to delay splashing out on upgrades. The French consumer is also weakening and sales at its international operations have broadly flatlined.

Adjusted pretax profit is expected to drop 24% from last year to £358.3 million.

Keep an eye on its outlook for the remainder of the year. Kingfisher is currently aiming to deliver adjusted pretax profit of £634 million, but analysts believe that could be too optimistic considering the consensus currently points toward a figure closer to £618 million. Either way, Kingfisher is on course to see profits fall for a second consecutive year as the boom seen during the pandemic gives way to much tougher conditions for DIY retailers.

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