This earnings season one sector will be more front and center than most. And that sector is: retail.
It should not only presumed but rather, expected, they’ll be the typical GAAP vs Non-GAAP shenanigans along with the now bemoaned “buybacks” to make a dismal report read like the fictional tale of an earnings juggernaut.
We’ve now come to expect this, and we know how it’s going to be spun across the financial media. So much so many of us over the last few years have paid little attention to the granular that makes up these reports.
It doesn’t take more than a cursory listen when you begin hearing “They missed on both the top and bottom line. Yet: with buybacks, one time non-recurring, or _________(fill in your favorite here.) They now beat by a penny!” to understand it had nothing to do with anything else – but financial engineering.
That being said, I believe paying close attention to this retail earnings reports; especially those of the “big box store” variety, will give far more insight into where we are going from here than probably any earnings season prior of the last few years. Why?
Well if my observations over the last few weeks are correct. What I’ve both noticed as well as couldn’t help but notice is this: It’s getting near impossible for these retailers to hide the fact they’ve cut more staff and other essentials – then they’ve cut prices. Let me explain.
Currently my residence is smack dab in the heartland of the U.S. near Columbus Ohio. Columbus boasts all that one would acquaint with a metropolitan area. There’s upscale dining, retail, etc., etc.
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