May 23-27 | Fashion Sector and NVIDIA Results: What to Watch This Week

As you might know, the markets are heavily influenced by future forecasts, whether it’s inflation data or company earnings. This week’s concern: the decline of the euro. The euro is now almost at parity with the dollar, partly because of the war in Ukraine.

But if you want a more optimistic view, remind yourself that stocks offer plenty of opportunities after the recent price drop. And the latest earnings season delivered lots of positive surprises. This week, we’re looking closely at the fashion industry and the upcoming results for Nvidia.

How is the fashion industry doing?

It’s been a tense few months for the fashion sector, which has been hit with production and supply chain issues. On top of that, many companies have halted business in Russia. Will we see a negative impact on the balance sheet? This week, on Tuesday May 24th, we’ll get quarterly reports from three major fashion companies. Here’s what to expect:

  • Abercrombie – Have you seen the Netflix documentary White Hot? It tells the story of Abercrombie’s questionable history including unfair dismissals and discrimination. It’s not great publicity for the company! The stock even dropped when the film was released. On the flip side, Abercrombie’s sales figures remain strong. Revenue is expected to come in around $795 million for this quarter, a growth of 2.4%. Annual revenue could reach $3.85 billion in 2022, according to estimates.
  • Urban Outfitters – The company reported record sales at the end of 2021 but can everyone’s favourite vintage retailer continue the momentum? Wall Street analysts expect the group to post $1.07 billion in revenue this quarter, up 15.4% year-on-year.
  • Nordstrom – If you’ve ever been to the US, you might remember the huge Nordstrom Rack stores where you can buy an entire wardrobe! For this quarter, the group could post sales of approximately $3.33 billion, representing growth of 10.6%. Similarly, analysts believe the stock has been undervalued since the health crisis and remains cheap, with the added prospect of continued improvement and revenue growth.

Nvidia plays the growth card

NVIDIA seems to be doing well overall, despite the global shortage of semiconductors. Analysts expect earnings per share (EPS) of $1.33, a year-over-year growth of 41.3%. The company will reveal its quarterly figures on Wednesday, May 25th.

On top of that, Nvidia is about to release the new ultra-innovative graphics card GeForce RTX 4000 which should be ready for the summer. Gamers and computer fans have been eagerly awaiting this.

Economic and earnings calendar

Monday – Business climate in Germany (May).

Tuesday – Flash PMI for services and manufacturing in France, Germany and the euro zone. EcoFin meeting. Quarterly results from CTS Eventim, Urban Outfitters, Abercrombie, Nordstrom.

Wednesday – GDP growth in Germany (first quarter). Unemployment rate in France (April). FOMC Minutes. Quarterly results from NVIDIA, Splunk, Snowflake.

Thursday – US GDP growth (first quarter). US weekly unemployment figures. Quarterly results from Dollar Tree, Autodesk.

Friday – GDP growth in France (first quarter).

We’ll be back next week with another edition of the BUX Breakdown. In the meantime, have a great week on the markets!

This BUX Breakdown was written by Clémentine Pougnet.

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.