MW Analysts are cutting first-quarter forecasts more than normal. They still expect growth

By Bill Peters

Earnings Watch: GameStop, Dollar Tree, Lululemon report during the week

President Donald Trump's tariffs have made consumers, the Federal Reserve and Wall Street more worried about the economy. But as investors turn their attention to first-quarter results in the weeks ahead, much of corporate America is still expected to put up a profit gain.

According to a FactSet report published on Thursday, analysts expect the companies in the S&P 500 Index to put up a 7.1% increase in earnings per share in the first quarter, which for many companies concludes at the end of this month. That would be the seventh straight quarter of year-over-year growth, the report said.

Still, those analysts have been cutting their forecasts for first-quarter results more aggressively than normal, a sign of more pessimism about the period. At the beginning of the year, analysts had forecast growth of more than 11%.

Analysts typically trim their quarterly forecasts over time, as initial optimism hits financial realities. Some argue that the process of lowering those estimates makes it easier for companies to beat them and prop up the stocks.

But Fed Chair Jerome Powell last week said that the uncertainty over the economy was "unusually elevated." And Goldman Sachs analysts on Friday said that the "sharply bearish turn" in investors' attitudes this month rivaled that seen in 2022, when the Fed began hiking interest rates in an effort to curb inflation.

Still, according to FactSet, the vast majority of analysts covering big tech names like Microsoft Corp. $(MSFT)$, Amazon.com Inc. $(AMZN)$ and Nvidia Corp. $(NVDA)$ recommending buying those stocks. However, concerns about a bubble continue to hang over the artificial intelligence boom, and those companies have played a big part in driving the index's overall growth in recent quarters.

This week in earnings

Conservative-leaning video platform Rumble Inc. (RUM) reports results during the week. So do RV-maker Winnebago Industries Inc. $(WGO)$ and homebuilder KB Home (KBH). MillerKnoll Inc. (MLKN) McCormick & Co. Inc. $(MKC)$ and Paychex Inc. $(PAYX)$ also report.

The calls to put on your calendar

More retailers: During the week, quarterly results are due from discount retailer Dollar Tree Inc. $(DLTR)$, athleisure giant Lululemon Athletica Inc. $(LULU)$ and pet-supplies retailers Chewy Inc. $(CHWY)$ and Petco Health and Wellness Co. Inc. $(WOOF)$.

The results, and remarks from executives, will likely add more nuance to the current consumer unease. Dollar General Corp. $(DG)$ this month said cost-of-living increases would likely continue to stretch its lower-income shoppers through this year. Concerns about a more reluctant U.S. shopper have also sunk Lululemon's shares over the past year, but Raymond James analysts have called out new products, including its new Glow Up line of training clothing, as potential positives. And while Petco's new chief executive tries to tighten up the chain's merchandise, some analysts have grown more upbeat on Chewy.

The number to watch

GameStop stock price: Video-game retailer and meme stock GameStop $(GME)$ reports quarterly results on Tuesday. The company has been dealing with slipping sales, questions about profitability in its core business and store closures amid a broader shift to digital gaming. Still, the stock is up nearly 90% over the past 12 months, helped in part by the reemergence of Roaring Kitty last year. Speculation over whether it might move into crypto could bring more volatility.

-Bill Peters

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March 23, 2025 10:00 ET (14:00 GMT)

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