What to Watch on Wall Street This Week: Burgers, Bean Counters, Beds and More
You can never know in advance all the news that will move the market in a given week, but some things you can see coming. From a new hamburger with a not-so-surprising topping to a few retailers serving up quarterly results, here are some of the items that will help shape the week that lies ahead on Wall Street.
Monday -- Fries on a Burger: The market's closed in observance of the Labor Day holiday, but that doesn't mean that you can't kick off the week with something new. Burger King (BKW) is introducing its autumn menu this week, and it includes a new French Fry Burger.
You can guess the contents. It's a classic burger, topped by a small handful of fries. As part of BK's aggressive move to position itself as a value hunter's dining destination, the new French Fry Burger will set the hungry back just a buck.
Dollar menus have become a big deal for the three leading burger chains. But Burger King better hope that diners don't just order the new burger in lieu of a sandwich and a side of fries. It's the fries and the soft drinks where the eatery scores its healthiest profit margins.
Tuesday -- New Kids on the H&R Block: We're far removed from the frenzy of tax-filing season, and that makes this a seasonally sleepy time for accounting giant H&R Block (HRB). When H&R Block reports quarterly results on Tuesday, analysts foresee it generating less than $100 million of the more than $3 billion that it will record for the entire fiscal year. It will also post a quarterly loss, but that's fine. H&R Block generates a large enough profit during its potent April quarter to more than make up for the deficits that it reports during the balance of the year.
H&R Block was one of many companies burned during the financial crisis, having branched out into offering mortgage originations at the worst possible time. It's scaling back these days, and earlier this summer announced plans to sell its banking subsidiary to concentrate on its core consumer tax services.
At the very least, it's always fun to see bean counters counting their own beans.
Wednesday -- Frock and Roll: Francesca's Holdings (FRAN) isn't your typical retailer. It has a large number of stores -- 438, in fact -- but it's not exactly a household name. It also runs counter to the usual model in the way it stocks merchandise.
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Unlike most large apparel retailers, which tend to stock a lot of the same stuff, Francesca's boutiques carry limited numbers of each item. That's by design. If you like a dress or accessory you see, you know you'd better not wait, because it might be there the next time you come back.
The model's working. Net sales rose 29 percent in Francesca's latest quarter, though most of that is the result of expansion. We'll get another snapshot of the fast-growing retailer on Wednesday morning when it serves up its fiscal second quarter financials.
Thursday -- Wrath of Conn's: Appliances have been a thinking investor's way to play the housing market rebound. After all, if developers are building new homes and existing homes are selling again, there's going to be demand for new appliances. Conn's (CONN) is an consumer electronics and appliances retailer, and appliances and furniture actually combined for more than half of the chain's sales in its previous quarter.
Sure, we saw Sears (SHLD) stun the market with weakness in its signature appliances division earlier this earnings season. However, that's been the exception. Most of the other chains in the appliances business have held up nicely, and that bodes well for Conn's as it reports on Thursday morning.
Friday -- Hitting the Mattress: Along with appliances and furniture, mattresses have also been a smart way to play the housing recovery. Mattress Firm (MFRM) has quickly established itself as a market leader in the bedding space. Shortly after going public two years ago, it went on to acquire smaller rivals. Why not? This is a highly fragmented market with plenty of regional favorites.
As a result of organic expansion and timely acquisitions Mattress Firm now has more than 1,200 stores across the country. When Mattress Firm reports on Friday morning analysts are forecasting revenue and earnings to grow by a little better than 20 percent. That's the kind of growth that should give investors a good night's sleep -- ideally on one of the company's mattresses.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Burger King Worldwide. Try any of our newsletter services free for 30 days.
