Retailers’ Profit Reports to Be Watched Closely

Several retailers will report quarterly results this week, including the nation’s No. 2 home improvement retail chain, Lowe’s Cos., and Intimate Brands Inc., which operates the Victoria’s Secret lingerie chain.

Investors say they will look for signs that revenues and profits are on track to improve next year.

Some are betting that signal will come, and they have been loading up on retail stocks in advance.

Last week the Commerce Department said total retail sales zoomed ahead by 7.1% in October as consumers took advantage of cheap financing to buy new cars. That was the strongest one-month gain since records were started in the late 1960s.

Even so, some strategists are wary.

Douglas Cliggott, the chief portfolio strategist for J.P. Morgan, has cut his 2002 earnings-per-share outlook for companies in the S&P; 500 to $36 from $38, on expectations business spending will be below its year-earlier level at the end of next year. Cliggott said he believes the S&P; 500 could tumble below the Sept. 21 levels, their 2001 lows, in the next year.

Lowe’s, which ranks second only to Home Depot, is expected to report earnings today, and Intimate Brands’ results are anticipated Tuesday. Toys R Us Inc., the nation’s largest toy store chain, also is expected to report earnings today.