Stocks dropped last week, as the Dow Jones Industrial Average (^DJI 0.06%) shed more than 3% and the S&P 500 (^GSPC -0.22%) dropped 2%. The decline sent indexes off their highs, but they remain in solidly positive territory -- up roughly 10% so far in 2021.
Several widely followed stocks will report earnings results over the next few trading days. Let's take a closer look at what investors can expect to hear from Winnebago (WGO 0.23%), Nike (NKE 0.95%), and FedEx (FDX 0.11%).
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1. Nike's sales spike
Investors are expecting some market-thumping growth numbers from Nike on Thursday. The footwear giant will benefit from going up against an unusually weak prior-year quarter that captured some of the worst impacts of COVID-19 retailing shutdowns. But sales should also be boosted by shipping delays that pushed many orders out of the most recent quarter.
At the time, Nike blamed its double-digit revenue decline in the U.S. market entirely on that temporary supply chain challenge, and so Wall Street is expecting much better news this week. Most investors who follow the stock are looking for revenue to rise by nearly 80% to over $11 billion.
The company will also issue its first outlook for the new fiscal year that just began. That forecast might be unusually cheery, given spiking demand for athleisure and fitness wear in both the U.S. and China. Besides broader economic growth trends, the biggest factor going into that 2022 result will be how well Nike's packed pipeline of new releases resonates with consumers over the upcoming holiday season.
2. Winnebago's backlog
Winnebago has issued some strong earnings reports in recent months, but Wednesday's announcement might still impress investors. The RV giant revealed spiking demand and low dealership inventory in its last report, which bodes well for sales trends -- assuming it was able to secure all the parts it needed to keep manufacturing humming along.
Rival Thor Industries recently said supply chain challenges pressured growth in early 2021, but that consumer interest in towables and motor homes has never been higher. Winnebago shareholders are hoping to see faster growth than Thor reported and a continued uptick in gross profit margin thanks to rising prices and a shift toward more premium models. We'll also get comments from CEO Michael Happe and his team about the prospect for fundamentally strong RV demand even as the pandemic threat fades.
3. FedEx's price increases
FedEx's shares have trounced the market over the past year, but that rally will get a test when the delivery specialist announces fiscal fourth-quarter results on Thursday. Its last quarterly outing was a blockbuster. Sales jumped to $21.5 billion from $17.5 billion a year earlier thanks to elevated demand across its e-commerce fulfillment, express, and international offerings. Operating earnings more than doubled as prices rose, too.
We'll find out this week whether FedEx's network handled the stress of unusually high delivery volumes. Meanwhile, capital spending may be rising in anticipation of another record-setting holiday season ahead.
But the major ingredients supporting the stock's rally should still be present, including sharp sales growth, rising profit margin, and surging cash flow. If those metrics all continue improving this week, FedEx will remain an attractive transportation stock for investors seeking a balance between growth and income.
