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3 things to watch on the stock market this week

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Shares fell for a second straight week last week as both Dow Jones Industrial Average (DJINDICES: ^ DJI) and the S&P 500 (SNPINDEX: ^ GSPC) lose less than 1%. The decline has always left investors looking for big gains so far in 2021, with the Dow Jones up 13% and the S&P 500 up 18%.

The earnings season continues with new earnings reports from several retailers in the coming trading days. Let’s take a closer look at some highly anticipated announcements from this list, by Costco (NASDAQ: COT), Nike (NYSE: NKE), and Point correction (NASDAQ: SFIX).

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Costco renewal rate

Thanks to its monthly sales updates, investors already know that Costco had an excellent fiscal fourth quarter. Comparable store sales jumped 9% in August, the warehouse giant reported in early September, which reports good news in the next earnings report on Thursday.

This announcement will add context to its performance for fiscal 2021, including an update on its profitability, which has increased slightly in recent times. But the big number to watch this week is Costco’s renewal rate. About 91% of its members have renewed their subscriptions in recent times, reflecting strong engagement and top-notch customer satisfaction.

These gains support sales growth over time, but they also lay the groundwork for increased membership fees. Costco hasn’t increased its subscription prices for a few years, and Wall Street is hoping the next boost could come in fiscal 2022.

Nike inventory

Rival Lululemon Athletica recently set the stage for what could be a strong Nike earnings report on Thursday. The athleisure specialist said it was benefiting from accelerating sales growth and soaring profits as customers flocked to the release of innovative new products in early summer.

Nike also had a busy quarter for product launches, which is one of the reasons most investors expect sales to increase in the low double-digit range this fiscal year, to around 50. billion dollars, after the peak of 19% last year.

Wall Street is even more excited about the direction prediction of a new, more profitable financial model through direct-to-consumer sales. But the next part of this race involves Nike successfully raising prices to offset the higher costs. Look for executives to discuss any supply chain challenges that could also affect the holiday shopping season this week.

Stitch Fix Shipping Update

It’s been a wild ride for Stitch Fix shareholders last year, and that volatility is expected to continue around Tuesday’s earnings release.

In contrast, the apparel specialist may have been hit by a congested supply chain and high transportation costs. Several industry peers have noted these challenges, and Stitch Fix’s delivery model makes it more susceptible to shipping bottlenecks than its rivals. Still, the company showed impressive resilience in the previous quarterly outing when CEO Elizabeth Spaulding took over from founder Katrina Lake.

Spaulding should spend some time highlighting Stitch Fix’s new direct buy offering that gives it a chance to play in a much larger retail space. This service was launched nationwide in August and has the potential to accelerate sales growth. But its most immediate concern is to keep inventory flowing in its system, at affordable prices, during a holiday shopping season that is likely to stress the freight delivery network over the coming months.

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