A summer shopping list for North American distribution and retail stocks

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We are looking for consumer discretionary distribution and retail companies with strong price momentum

The screen, with results ranked by the StarMine Price Momentum Regional Rank, produced nine companies across four subsectors., which ranked highest in the Price Momentum Model with a score of 100, was one of two Canadian-listed stocks to make the screen. Canadian Tire operates three business segments: retail, financial services and CT REIT.

Canadian Tire is set to announce its second-quarter earnings on Aug. 10, and the current consensus earnings per share estimate is $3.09, with analysts noting potential headwinds facing the company. Canadian Tire suffered a fire at the A.J. Billes Distribution Centre in Brampton, Ont., earlier this year, and some dealers have reported higher than normal inventory levels, both of which could impact revenue and earnings.

The company currently generates about 50 per cent of its revenue from e-commerce, providing it with some insulation from declining in-store retail sales, while also generating half its revenue from in-house brands that offer higher margins than outside labels. Urban Outfitters will announce its second-quarter earnings on Aug. 22, and the consensus estimates are US$1.25-billion in top-line revenue, and US$0.89 in earnings per share.

 

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