Earnings Previews: Buckle, Dollar Tree, Ross Stores

Retailers The Buckle BKE, Dollar Tree Stores DLTR and Ross Stores ROST are scheduled to report their second-quarter 2011 results tomorrow, August 18, before the markets open. Analysts are expecting to see year-over-year growth of both per-share earnings and revenues from each of them. The Buckle is a Kearney, Nebr.-based casual apparel purveyor, and it is expected to post earnings of $0.51 per share, as well as revenues of $209.0 million. That is an increase of $0.44 per share and $188.6 million in the same period of last year. Note that 60 days ago the consensus earnings estimate was $0.49 per share. And The Buckle has topped earnings estimates in six of the past eight quarters; it fell short by two cents per share in the most recent quarter. Dollar Tree's consensus forecast calls for earnings of $0.75 per share, which is up from $0.61 year over year. That estimate is unchanged from 60 days ago. And this discount variety store operator's revenues are predicted to come in at $1.6 billion. That is an increase from $1.4 billion in the same period of last year. Analysts have been underestimating Dollar Tree's quarterly earnings since 2007, however. Pleasanton, Calif.-based discount retailer Ross Stores is expected to report that per-share earnings rose 16.4% from a year ago to $1.28. Note that the consensus earnings estimate was $1.24 per share 60 days ago. Earnings results have been in line with consensus estimates in recent quarters. Revenues are anticipated to have increased 8.6% to total $2.1 billion. The stocks of all three of these retailers have outperformed the broader markets year to date. The share prices of The Buckle and Dollar Tree are more than 60% higher than a year ago, while Ross Stores is trading more than 45% higher year over year. Other retailers scheduled to post quarterly results tomorrow include America's Car-Mart CRMT, Bon-Ton Stores BONT, Casual Male CMRG, Children's Place PLCE, Foot Locker FL, GameStop GME, Gap GPS, Sears SHLD, Stage Stores SSI and Stein Mart SMRT. Action Items: Bullish: Traders interested in exchange traded funds invested in retailers might want to consider the following trades:

• SPDR S&P Retail XRT: up more than 27% in the past year
• Vanguard Consumer Discretionary ETF VCR: up more than 19% in the past year
• Retail HOLDRs RTH: up almost 16% in the past year
• iShares Dow Jones U.S. Consumer Goods Fund IYK: up more than 15% in the past year

Bearish: Traders may want to consider these alternative positions:

• Direxion Daily Retail Bear 2X Shares RETS: up more than 11% in the past month
• ProShares UltraShort Consumer Goods SZK: up more than 8% in the past month

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