L Brands Inc (NYSE: LB) is scheduled to
release its second-quarter results after the market close Wednesday.
Analysts, on average, expect the company to report earnings of 42 cents on revenues of $2.75 billion.
Stung by the negative sentiment toward the sector,
the stock has been on a wane since 2016 after it hit an all-time closing high of $91.86 on Dec. 4, 2015. The stock is currently at
a multi-year low around the $39–$40 area, with the area having served as support in 2012.
See also: Retail To Finish
Q2 Earnings Season As Challenges Continue
Retail stocks have been gyrating wildly in recent sessions, with earnings serving as catalysts and in the process being a
make-or-break event.
Dicks Sporting Goods Inc (NYSE: DKS)
reported Tuesday below-consensus adjusted earnings per share and comps that grew a mere 0.1 percent, hurt by the general retail
malaise and weak firearm sales.
The company issued weak
earnings and comp forecasts for the full year. Specifically, the company guided full-year adjusted earnings per share to $2.80 to
$3 and comps to flat to down in low-single digits compared to the 3.5 percent increase in 2016.
Dick's Sporting shares
plunged about 23 percent to their lowest levels since 2010 Tuesday.
Meanwhile, teen apparel retailer Urban Outfitters, Inc. (NASDAQ: URBN)'s earnings report released on Wednesday showed that earnings per share came
in at 44 cents on revenues of $873 million. Both the metrics were better than the Street forecasts.
Comps fell 4.9 percent, but the drop was less than expected.
The retailer's shares were soaring 17.97 percent to $19.84 at the time of writing.
Given the unpredictability of retail earnings, L Brand's second-quarter results could help the stock find its feet around the
current support area and probably rally to a resistance around the $43 area or it could drop off to a long-term support around the
$34 region.
Source: Y Charts
More clarity could emerge in a few hours from now, when the department store chain reports its second-quarter results.
At the time of writing, LB shares were rallying 3.38 percent at $39.75.
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