Disney, Airbnb earnings, Retail sales: What to know this week

·10-min read

Though first-quarter earnings season is winding down, a handful of major companies will still be reporting results this week, including some of the newly public names like Airbnb (ABNB), Roblox (RBLX) and Bumble (BMBL). The Commerce Department's retail sales report is also set for release, offering another update on the strength of consumer spending during the economic recovery. 

So far, companies have been blowing past expectations this earnings season, with corporate profits easily exceeding estimates as demand rebounds from the worst points of the pandemic last year. According to FactSet data, as of Friday, about nine in 10 S&P 500 companies had reported first-quarter results, and 86% of these topped expectations. If that holds through the next couple weeks, it would mark the highest percentage of earnings beats since FactSet began tracking the metric in 2008. 

Disney (DIS) will be one of the major index components reporting results this week. Different areas of the entertainment giant's business have been helped or harmed by social distancing standards stemming from the pandemic: While the company's Disney+ streaming service has flourished, its larger and more lucrative parks, entertainment and experiences business has floundered.

Disney reported in early March that Disney+ topped 100 million subscribers for the first time, crossing that milestone just 16 months after its late-2019 launch. That speedy growth trajectory has made the company a formidable competitor to long-time streaming incumbent Netflix (NFLX), which boasted more than 208 million worldwide subscribers as of the end of its first quarter.

ANAHEIM, CA - NOVEMBER 19: Masked visitors walk along Hollywood Land at Disney California Adventure which opened on Thursday, Nov. 19, 2020 in Anaheim, CA but without rides. There were plenty of dining and shopping opportunities. (Myung J. Chun / Los Angeles Times via Getty Images)
ANAHEIM, CA - NOVEMBER 19: Masked visitors walk along Hollywood Land at Disney California Adventure which opened on Thursday, Nov. 19, 2020 in Anaheim, CA but without rides. There were plenty of dining and shopping opportunities. (Myung J. Chun / Los Angeles Times via Getty Images)

However, Netflix's first-quarter results served as a possible harbinger of deceleration for Disney+ and other streaming services, with consumers beginning to return to in-person entertainment. Netflix added only 3.98 million paid subscribers in the first quarter, or sharply below the 6.3 million expected, and also guided below consensus estimates for current-quarter streaming additions. 

Still, as a newer player, Disney+ may still have more room to grow until it starts to see a marked slowdown, even as consumers spend more time outdoors and away from screens this year. And Disney's management said in March it expected the service to reach between 230 million and 260 million global subscribers by the end of fiscal 2024. The business unit is expected to become profitable by that year as well, after the company's direct-to-consumer business segment containing Disney+ lost $2.8 billion in fiscal 2020.

But outside of streaming, many on Wall Street are hoping Disney also posts a rosier outlook for its parks business for the coming months as vaccinations allow for more reopenings.

Disneyland Paris and Disneyland and California Adventure in Anaheim, Calif. were closed throughout Disney's fiscal second quarter, meaning the company will still likely see a dent from that lost traffic in this week's report. Cruises were also still halted. However, Disney's California theme parks just reopened at the end of April with some social distancing restrictions, suggesting the business segment might finally begin to pace back toward profitability, after three consecutive quarterly operating losses. During the company's last earnings call in February, CEO Bob Chapek said he expected mask-wearing and social distancing to stay in place at Disney's parks at least through the end of this year, and likely into next year. 

Overall, Wall Street is looking for Disney to post adjusted earnings of 28 cents per share on revenue of $15.85 billion, representing a fourth straight year-over-year drop in sales. Shares of Disney have increased 1.7% for the year-to-date through Friday, underperforming against the S&P 500's 12.5% gain over that period. 

Small toy figures are seen in front of diplayed Airbnb logo in this illustration taken March 19, 2020. REUTERS/Dado Ruvic/Illustration
Small toy figures are seen in front of diplayed Airbnb logo in this illustration taken March 19, 2020. REUTERS/Dado Ruvic/Illustration

Meanwhile, newly public vacation rental company Airbnb (ABNB) is also set to report earnings results this week, with the company's results also closely tied to the pace of the economic recovery. 

Consensus economists are looking for gross bookings, or the total dollar value of bookings on the Airbnb platform, to have increased to about $7.57 billion in the first quarter through March, rising from $5.9 billion in the final three months of 2020. In all, gross bookings were down 37% in 2020 to $23.9 billion, with overall bookings deeply undercut by the pandemic and stay-in-place orders.

But with more individuals now vaccinated and itching for getaways, Airbnb's recovery prospects have brightened. First-quarter revenue likely grew 56% to $717.96 million, though adjusted EBITDA is expected to have widened to $367.23 million from the $334.3 million reported in the same period last year. 

Many on Wall Street have suggested Airbnb has an advantage over traditional lodging companies like hotels, since many of Airbnb's listings are single-home residences that might better cater to consumers looking to still steer clear of crowds. 

However, like other travel companies, Airbnb's domestic business has picked up faster than its international business, and leisure travel has recovered faster than business travel, leaving a gap in results compared to pre-pandemic bookings levels. 

"We are seeing a lot of resiliency in certain geographies, especially North America and Europe. What we've generally found is that domestic travel globally is pretty strong, and that the primary challenge is cross-border travel, in addition to, of course, business travel, where we're not as affected by business travel reductions," Airbnb CEO Brian Chesky said during the company's last earnings call in late February. However, he also noted that he largely expected "there will be a significant travel rebound" in 2021, once restrictions lift and borders begin to open. 

Shares of Airbnb have risen 2.6% for the year to date through Friday's close, underperforming against the Nasdaq's 6.5% gain. 

Retail sales, CPI

One of the key economic data reports investors will be watching this week will be the April retail sales report from the Commerce Department, due out Friday. 

Most pundits are expecting some payback after an exceptionally strong March report, since spending then had been boosted by the latest round of stimulus checks sent to most Americans. Retail sales rose by 9.8% in March for the fastest pace since May 2020, as clothing, building material, and sporting goods and hobby store sales each advanced strongly. 

"Retail sales are expected to post a decent gain again after jumping 9.8% month-on-month in March on the back of the $1,400 stimulus payments. The cash deposits were made in the second half of the month, and this should mean there is some carry-through on spending into April," ING Chief International Economist James Knightley said in a note Friday. "The reopening economy also means there are more options to spend money, and with household savings having risen $3 trillion during the pandemic, there is plenty of cash ammunition to use." 

Consensus economists are looking for retail sales to rise by just 1.0% in April over March. Excluding auto and gas sales, retail sales likely climbed by an even slimmer margin, or just 0.5%. 

And in addition to consumer spending data, more data on consumer price changes will also be released this week. Wednesday's consumer price index from the Bureau of Labor Statistics is expected to show a 3.6% year-over-year rise in consumer prices, accelerating from a 2.6% rise in March. And even excluding volatile food and energy prices, the index is expected to rise 2.3% year-over-year after a 1.6% gain in March. 

Economists have attributed the main driver of the recent jump in consumer prices to base effects, or inevitable jumps off last year's pandemic-depressed levels. Month-over-month, the consumer price index likely increased just 0.2% from March to April, or 0.3% when excluding food and energy prices. 

However, a number of companies have underscored during their latest quarterly earnings calls that supply chain disruptions and supply and demand mismatches have led to higher prices beyond those explained by base effects. As such, market participants are poised to closely watch the rest of 2021's inflation prints closely, eyeing signals of persistent price pressures. 

"While there is unusually high uncertainty surrounding the near-term inflation outlook, we think inflationary bottlenecks for certain goods and services are likely to lead to continued firming of core inflation in the coming months," Nomura economist Lewis Alexander wrote in a note Friday.

Earnings calendar

  • Monday: Marriott International (MAR), Coty Inc (COTY), Duke Energy (DUK), Tyson Foods (TSN), Workhorse Group (WKHS) before market open; Roblox (RBLX), Nuance Communications (NUAN), Occidental Petroleum (OXY), Affirm Holdings (AFRM), Novavax (NVAX), The Real Real (REAL), SmileDirectClub (SDC), Virgin Galactic Holdings (SPCE) after market close

  • Tuesday: Palantir (PLTR) before market open; Lemonade (LMND), Chesapeake Energy (CHK), FuboTV (FUBO), Opendoor Technologies (OPEN), Electronic Arts (EA) after market close

  • Wednesday: Compass Inc. (COMP), Bumble (BMBL), Sonos (SONO), Vroom Inc (VRM), ThredUp Inc (TDUP), Green Thumb Industries (GTII); Poshmark (POSH), Wish (WISH) after market close

  • Thursday: Alibaba (BABA), Yeti Holdings (YETI) before market open; Coinbase (COIN), DoorDash (DASH), Disney (DIS), Airbnb (ABNB), Blink Charging Co (BLNK) after market close 

  • Friday: N/A

Economic calendar

  • Monday: N/A

  • Tuesday: NFIB Small Business Optimism index, April (100.8 expected, 98.2 in March); JOLTS job openings, March (7.5 million expected, 7.367 million) 

  • Wednesday: MBA Mortgage Applications, week ended May 7 (-0.9%); Consumer price index, April month-over-month (0.2% expected, 0.6% in March); Consumer price index excluding food and energy, April month-over-month (0.3% expected, 0.3% in March); Consumer price index, April year-over-year (3.6% expected, 2.6% in March); Consumer price index excluding food and energy, April year-over-year (2.3% expected, 1.6% in March); Real average weekly earnings, year-over-year, April (3.9% in March); Real average hourly earnings year-over-year, April (1.5% in March); Monthly budget statement, April (-$659.6 million in March) 

  • Thursday: Producer price index, April month-over-month (0.3% expected, 1.0% in March); Producer price index excluding food and energy, April month-over-month (0.4% expected, 0.7% in March); Producer price index, April year-over-year (5.8% expected, 4.2% in March); Producer price index excluding food and energy, April year-over-year (3.7% expected, 3.1% in March); Initial jobless claims, week ended May 8 (500,000 expected, 498,000 during prior week); Continuing claims, week ended May 1 (3.640 million expected, 3.690 million during prior week)

  • Friday: Retail sales, April month-over-month (1.0% expected, 9.8% in March); Retail sales excluding autos and gas, April month-over-month (0.5% expected, 8.2% in March); Import price index, April month-over-month (0.6% expected, 1.2 in March); Import price index, April year-over-year (10.3% expected, 6.9% in March); Export price index, April month-over-month (0.6% expected, 2.1% in March); Export price index, April year-over-year (9.1% in March); Industrial production, April month-over-month (1.2% expected, 1.4% in March); Capacity utilization, April (75.2% expected, 74.4% in March); University of Michigan consumer sentiment, May preliminary (90.1 expected, 88.3 in April) 

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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