5 Things to Watch: Costco, Kors, Krispy Kreme, Retail and Streaks
1. Tuesday Goes for 20: One of the market's oddest winning streaks will be tested when trading begins after the Memorial Day holiday weekend. The Dow has closed higher for 19 Tuesdays in a row.
It's a lucky fluke. There really hasn't been any rhyme or reason for what is now nearly five months of higher closes for the Dow Jones Industrial Average on Tuesdays. This is the longest streak since the Dow managed 24 consecutive positive closes on Wednesdays in 1968.
It won't be a lock to get to 20. The market itself proved mortal for all of last week. After four straight weeks of higher market closes, all of the major market indices closed lower last week heading into the holiday weekend.
2. Everything Counts in Large Amounts: Costco (COST) made warehouse clubs cool.
Exposed ceilings, stacks of merchandise packed on pallets, and bulk-sized packaging didn't seem very stylish until Costco helped usher in the movement of deep savings on groceries and other wares when packaged in large quantities. Costco is so popular that it was able to push through a 10 percent membership increase two years ago -- bumping its annual basic membership to $55 -- without skipping a beat.
The warehouse club darling also didn't lose a step when longtime CEO Jim Sinegal retired at the beginning of last year. Costco has been a steady producer, and that's exactly what the market expects when the discount retailer reports quarterly results on Thursday. Analysts see revenue clocking 8.5 percent higher for the period with earnings per share climbing twice as fast.
3. Time to Make the Doughnuts: Fans of doughnuts know the drill at Krispy Kreme (KKD). Whenever they see the "Hot Doughnuts Now" neon sign glowing, they can come in to grab some of the chain's signature original glazed treats as they are being made.
There's no denying that Krispy Kreme doughnuts aren't healthy. Trends are favoring healthier lifestyles. However, sweet indulgences of comfort foods may probably never go entirely away. Krispy Kreme certainly hopes that will be the case. There doesn't seem to be any plans to roll out fat-free doughnuts anytime soon.
4. Retailers on Parade: This is going to be a relatively light week on the earnings front, but there will be plenty of retailers stepping up to report their latest financials.
Unlike most companies, which end their fiscal years in December, retailers tend to close out their years in January to allow them to account for post-holiday returns within their most potent quarter.
We already went through the holiday quarter reports three months ago. Now we're dabbling into the fiscal quarters that ended in April for many retailers.
Chico's FAS (CHS), Tilly's (TLYS), DSW (DSW), and Express (EXPR) are some of the notable chains reporting this week. The bad news here is that just one of those four chains -- Chico's -- is expected to post year-over-year improvement in earnings.
5. Plotting a Course for Kors: Most people would never dream of paying as much as $3,500 for a purse, but then again most people aren't the target audience for Michael Kors (KORS).
The maker of luxury handbags and other accessories has given market leader Coach (COH) a run for its money lately. Net sales soared 70 percent at Kors in its previous quarter, proving that shoppers aren't flinching at the high prices in pursuit of the fashionable bags with the "MK" logo.
Kors reports on Wednesday, and Wall Street's betting on more heady growth. They see revenue climbing 44 percent and earnings per share shooting 77 percent higher. I guess that's more money for Kors to stuff into its handbags.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Coach and Costco Wholesale. The Motley Fool owns shares of Coach and Costco Wholesale.