5 Things to Watch This Week: Hunger Games, Nike, Video Games, Diamonds, Larry Ellison
There's never a dull moment on Wall Street. Let's go over some of the items that will help shape the week that lies ahead.
1. Hunger Games feeds hungry multiplex operators: Last year was brutal for movie exhibitors, and 2012 hasn't gotten off to a good start. That should all change on Friday, when The Hunger Games hits a movie theater near you. The first entry of the popular book series should have a huge opening weekend. There's even a fair chance that the midnight screenings on Thursday may already be sold out at your neighborhood multiplex.
The good news for movie house operators is that this is the first installment of what promises to be a meaty trilogy. There's also a magnetic slate of other films set to be released in the coming months.
2. Nike hopes to make it count: Obviously, Nike is a company for which athletic footwear and performance apparel are the main breadwinners, but let's not underestimate the value of its $149 mobile health bracelet.
Nike (NKE) reports on Thursday, exactly one month after the release of its Nike+ FuelBand. Through celebrity athletes, including Kevin Durant and Andrew Luck, the company has been promoting the device that tracks active movements and measures them in a proprietary metric called NikeFuel. The high-tech wristbands may be expensive, but they have also been hard to keep in stock. Folks continue to pay a premium above the $149 retail price through auction sites and online marketplaces because they just can't find them at area Nike stores.
The FuelBand is one of Nike's savviest business moves -- and this is a company that has a rich history of smart plays. The mobile health device is not only selling briskly, but through encouraging more active lifestyles by making it competitive to stay fit, it also draws in buyers of its "swoosh"-branded footwear and sweat-shaking clothing items.
Nike's report on Thursday will naturally dwell on its past financials, but the company is also likely to divulge some information on how the FuelBand is faring.
3. The game's afoot: The video game industry has been languishing through most of the past three years. Sure, big releases continue to do well. Activision Blizzard (ATVI) set a new initial sales record with November's release of Call of Duty: Modern Warfare 3. However, it's been pretty quiet outside of these "tentpole" titles.
It's against this backdrop that GameStop (GME) steps up with its latest quarterly report on Thursday. The leading video game retailer has held up surprisingly well through the turmoil. GameStop has a thriving resale business in which customers trade in used games and gear for in-store credit. The retailer then resells the software and hardware as used with meaty markups. This is actually a much bigger business for GameStop than selling new hardware and shrink-wrapped software.
GameStop also has a shopper loyalty club that's been keeping gamers close, even if there may be better prices to be found elsewhere. Analysts see improving profitability despite the projected flattening of net sales during the holiday quarter. We'll find out more on Thursday.
4. Breakfast at Tiffany's: There are larger jewelers out there, but when it comes to luxury, the iconic brand is Tiffany (TIF). If the economy's truly getting back on its feet, we'll probably see it at Tiffany.
Unfortunately, hopes aren't all that high here. Back in January the ritzy retailer revealed that domestic sales were soft during the holiday quarter. Even its flagship store in New York City -- the one from Breakfast at Tiffany's fame -- posted a net sales decline during the period.
Tiffany did report that sales were strong internationally, and that's important because the jeweler revealed earlier this year that it was forming a strategic joint venture to expand in the United Arab Emirates.
Tiffany reports on Tuesday morning. Feel free to have breakfast while you tune in to the conference call.
5. The oracle of Oracle: One of the more interesting tech CEOs is Oracle's (ORCL) Larry Ellison. He may run the country's largest enterprise software company, but he never shies away from opinionated comments that call out his rivals.
Oracle has grown from its early days of mastering database software, acquiring several companies -- even some rivals that Ellison has called out by name -- over the years.
In the end, Ellison earns Wall Street's respect because he loves to underpromise and overdeliver. Save for a rare quarterly miss last time out, Oracle routinely beats analyst profit targets. It should hopefully return to its winning ways in Tuesday's report.
Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article. The Motley Fool owns shares of GameStop, Activision Blizzard, and Oracle. The Fool owns shares of and has written calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Nike and Activision Blizzard, creating a synthetic long position in Activision Blizzard, writing covered calls on GameStop, and creating a diagonal call position in Nike.