It's not a perfect world out there for investors, but things may be starting to get better. The market's coming off another week of encouraging economic news as housing and employment data point to a continuing recovery.
I recently went over some of the companies that are expected to post lower quarterly profits when they report this week. Thankfully, they're the exceptions and not the rule. Now let's go over some publicly traded companies that are expected to stand tall this week by posting year-over-year improvement on the bottom line.
| Michael Kors (NYSE: KORS ) | $0.39 | $0.22 |
| The Fresh Market (NASDAQ: TFM ) | $0.44 | $0.40 |
| OmniVision (NASDAQ: OVTI ) | $0.21 | $0.20 |
| Krispy Kreme (NYSE: KKD ) | $0.17 | $0.14 |
| Pall (NYSE: PLL ) | $0.73 | $0.61 |
Source: Thomson Reuters.
Clearing the table
Let's start at the top with Michael Kors. The maker of high-end handbags has been posting spectacular growth. As the poster child of economic expansion for the affluent, Kors saw its sales soar 70% in its holiday quarter, fueled by a 41% pop in same-store sales.
Analysts see more heady growth, targeting revenue and earnings-per-share increases of 44% and 77%, respectively, when Kors reports on Wednesday. The smart money has to be betting on an even larger profit than that. Kors has beaten Wall Street's bottom-line estimates by at least 23% in each of the past four quarters. It's a good thing Kors makes stylish handbags. Investors need a place to stuff all that extra money while they laugh all the way to the bank.
The Fresh Market operates a growing chain of premium grocery stores. The small-box yet high-end supermarkets are resonating with shoppers looking for higher-quality meats, produce, and even fresh flowers. Analysts see revenue and earnings growing in the low double digits, but Fresh Market investors need to be careful. The grocer has come up short on the bottom line in its past two quarters.
OmniVision is back. The maker of image sensors was hot a few years ago as smartphones began adding high-quality cameras to their handsets, but then it saw margins contract sharply as cutthroat competitors stormed the market. The margin contraction is still a problem. Wall Street sees a modest uptick in profitability on a more robust 46% top-line surge, but at least earnings growth is moving in the right direction. OmniVision had posted year-over-year declines in net income for five straight quarters before bouncing back last quarter.
Krispy Kreme is the company behind the namesake doughnuts. They're not healthy. We know that. However, folks seem to be partaking in more of these fried indulgences. Wall Street's holding out for 7% revenue growth, and profitability is supposed to grow at an even headier clip.
Finally we have Pall. The provider of fluid management solutions doesn't just keep its fiscal performance flowing. Pall shareholders have been treated to nine dividend increases over the past nine years. Analysts see the filtration specialist earning $0.73 a share -- well ahead of the $0.61 it posted a year earlier -- on flattish revenue growth.
Cross those fingers, but know the fundamentals
Investors in these five stocks have a right to be excited. They're all improving their financial situations. They're worthy of the gains that the market rally has bestowed upon them over the past year.
I wouldn't be uncomfortable owning any of these companies. They're doing the right thing, regardless of Mr. Market's mood swings. The expectations may be high, but these five stocks wouldn't have it any other way.
Three more winners
The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only the most forward-looking and capable companies will survive, and they'll handsomely reward investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.
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