Stocks rose in a shortened trading week last week. Both the Dow Jones Industrial Average (DJINDICES: ^ DJI) and the S&P 500 (SNPINDEX: ^ GSPC) has achieved more than 1% and is at the peak of all time when we start the second quarter of 2021.
Several popular companies will announce profit results over the next few days. The list contains Constellation Brands (NYSE: STZ), Levi Strauss (NYSE: LEVI), en Simply good food (NASDAQ: SMPL), whose reports we will preview.
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1. Prospects of Constellation Brands
Constellation Brands will close its fiscal year on Thursday with a report on fourth-quarter earnings, and investors hope to hear good news from the alcoholic beverage giant. The latest quarterly update showed surprisingly strong sales growth, as the strong consumption of home beer offsets the decline in demand at pubs and restaurants. With Boston Beer, Constellation Brands was responsible for most of the growth in the industry in 2020.
This week’s report should include more evidence of strong growth in imported beer brands such as Modelo and Pacifico, along with modest success in the Corona hard-seltzer launch of the company that competes directly with Boston Beer’s franchise. Sales increases will slow compared to the previous quarter due to shipping and inventory shifts, but Constellation Brands’ consumption metric should still be good.
However, the stock’s move may depend on the fiscal outlook that CEO Bill Newlands and his team issued on Thursday in 2022. The forecast could include optimism for the beer division and the newly transformed wine and beverage segment, as well as potential big opportunities in the recreational marijuana space.
2. Simply Good Foods’ organic sales
Simply Good Foods’ share has outperformed the market boom since the COVID-19 lows, which provide a high benchmark for its earnings report in the second quarter of Wednesday. In light of the announcement, most investors expect the health-oriented food and snack specialist to grow strongly, with sales likely to reach around $ 230 million.
The recent acquisition of the Quest Nutrition franchise from management may make this figure noisy, but CEO Joseph Scalzo and his team must also estimate their organic selling price this week. The growth was in the middle of single digits by the benchmark, the company said in early January.
To push inventory deeper in 2021, Simply Good Foods will have to show steady demand in the Atkins and Quest brands, which will continue even as the threat of the pandemic decreases. And investors are hoping that profitability will improve thanks to the higher sales base. Seek out management to issue more detailed clues on both of these figures as part of Wednesday’s earnings report.
3. Levi Strauss’ 2021 forecast
The jeans art specialist Levi Strauss will announce his fiscal results in the first quarter on Thursday afternoon. The stock has jumped over the past year, but many investors are anticipating the chance for even bigger gains.
The bullish thesis depends on the company further distinguishing its small but fast-growing e-commerce platform. Levi Strauss also aims to diversify into complementary categories beyond its core denim focus. Progress in these two areas could offset some of the weak sales, which are expected to decline by 17% this quarter compared to the 12% decline in the previous quarter.
The share price increase in recent months means that investors will be looking to management to issue a positive outlook for 2021 after falling by 23% last year. Keep an eye on the inventory update of managers for an idea of how demand and price trends are heading into a tough holiday season.
This article represents the opinion of the author, who may not be in agreement with the ‘official’ recommendation position of a Motley Fool premium advisory service. We are furry! Questioning an investment thesis – even one of our own – helps us all to think critically about investments and to make decisions that help us become smarter, happier and richer.