3 Things to Watch in the Stock Market This Holiday Week

Stocks dropped last week, with both the S&P 500 (SNPINDEX: ^GSPC) and the Dow Jones Industrial Average (DJINDICES: ^DJI) falling by about 1%. The declines left the major indexes straddling around breakeven for the year.

The week ahead is shortened by the July 4 holiday, but still includes a few big-name earnings reports that could move individual stocks. Below, we'll preview what investors will be focusing on with these announcements from Herman Miller (NASDAQ: MLHR), Acuity Brands (NYSE: AYI), and PriceSmart (NASDAQ: PSMT).

Herman Miller's outlook

Herman Miller will announce its fiscal fourth-quarter earnings before the market opens on Tuesday. The interior-furnishings specialist had mixed news for investors during its last update. Sales grew by double digits in Q3. And the company made progress on a few important strategic objectives, like boosting profitability in its consumer segment and building out its e-commerce sales channel.

Yet CEO Brian Walker and his team were disappointed to see furniture order rates taper off, especially in the closing weeks of the quarter. That negative trend, plus continued pricing and cost pressures in the industry, led management to issue a conservative forecast of 4% sales growth in the fourth quarter, and adjusted earnings per share between $0.56 and $0.60.

Investors will be studying this upcoming report for signs that order volume might be picking up. But they'll likely be more interested in how the latest demand trends play into Herman Miller's forecast for the upcoming fiscal year.

Acuity Brands' profit margin

Investors weren't happy with lighting specialist Acuity Brands' most recent quarterly report, which raises the stakes around its fiscal third-quarter earnings announcement on Tuesday. In early April, the company posted modest sales gains that executives believed translated into market share growth, thanks mainly to its Atrius lighting platform. However, adjusted operating profit fell to $104 million, or 12.5% of sales, from $124 million, or 15.4% of sales in the prior year. "We were disappointed in our second quarter profitability measures," executives said at the time, noting that margins were hurt by "unfavorable changes in product prices" as well as rising expenses.

Acuity Brands promised to accelerate its cost-cutting programs, and so investors will be looking for signs of progress in ending the profitability slide. The more worrying concern is that demand shifts toward cheaper lighting products could erode the company's pricing power over time. Acuity Brands' best defense against that scenario is to continue introducing innovative lighting solutions that keep it on the leading edge of the industry.

PriceSmart's membership trends

PriceSmart announces its results on Thursday afternoon, and investors have a few good reasons to be optimistic about what that report will show. The international warehouse retailer logged its fastest growth pace in over a year in the second quarter of fiscal 2018, thanks to improving selling conditions in a few of its biggest markets, including Colombia, Trinidad, and the Dominican Republic.

Shareholders will be looking for the retailer to show more progress in building sales momentum, but the past few monthly updates suggest revenue growth has slowed slightly while remaining above 2%.

PriceSmart's membership metrics will be important to watch, too, since most of its profit comes from those predictable subscriber fees. As a result, investors will want to see healthy renewal rates, solid growth in the membership base, and rising subscriber income during the quarter.

10 stocks we like better than PriceSmartWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and PriceSmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of June 4, 2018

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.