6 Stocks to Watch This Week (Dec 8 - 12)
Earnings Test: Retailers, AI, and Your Wallet
This week is crucial for understanding how the economy is really affecting your household.
The Bank of Canada is about to announce its interest rate decision, and everyone is waiting to see if they'll cut rates to help ease high debt payments and support the economy.
But the truth is, the best clues about your financial health come from the companies you shop at every day. This week, we look at six reports to answer: Are consumers pulling back to save money, or are they still spending big?
The Week's Core Thesis
This week is a stress test for two themes: the resiliency of the consumer in a high-cost world (Dollarama, Empire, and Costco) and the future profitability of the AI revolution (Broadcom, Adobe, and Oracle). Use the "What to Watch" metrics for each stock to judge whether the current valuations (and the massive gains some of them saw in 2025) are truly justified.
To break down these two themes, we turn now to the six essential companies reporting this week, starting with our Canadian retailers:
Dollarama Inc. ($DOL):
The Discount Thermometer
Dollarama is the biggest discount retailer in Canada. Unlike traditional grocers or department stores, its consistent focus on low, fixed price points ($5 or less) makes it the ultimate defensive stock. When times get tough, more people start shopping there. This makes their earnings the clearest sign of how stressed the average Canadian budget truly is.
What to Watch: Same-Store Sales Growth (Comp Sales). This is the most important number. It measures how much more money people spent at existing stores compared to last year. If this number is high, it means Canadians are actively choosing to "trade down" from regular stores to save money.
Key Investor Fact: The Recession Shield. Dollarama is a strong "defensive stock." If you had invested in Dollarama 5 years ago, you would have almost tripled your money, showing it can grow even when the rest of the market struggles.
The Good: Reliable Growth & Global Reach. They keep opening new stores across Canada and are successfully growing their discount stores in countries like Australia, Colombia, Mexico and Peru, proving their business model for providing value works globally and gives the company massive room for future growth.
Investor Concern: Too Expensive? (Premium Valuation). The stock is expensive compared to other retailers (high P/E ratio), and is up over 40% in 2025. This means the market expects them to perform perfectly. If their sales growth is even slightly disappointing, the stock could drop sharply, reflecting the risk already baked into the high price.
Earnings Date: Thursday, December 11th (Before Market Open)
Empire Company Ltd.
($EMP-A):
The Grocery Bill Test
Empire Company is one of Canada's "Big Three" grocers, owning major banners like Sobeys, Safeway, the budget FreshCo, and the specialty Farm Boy. Their vast network touches every type of Canadian shopper. Their earnings are a direct look at the high cost of food and the strength of the "Buy Canadian" movement versus the pressure to buy the cheapest item possible.
What to Watch: Store Spending Mix. Look for comments about which stores are performing best. If FreshCo sales are soaring, it confirms consumers are chasing discounts. If Farm Boy sales are flat, it suggests even high-income shoppers are watching their specialty food spending.
Key Investor Fact: Real Estate Safety Net. Empire has a close partnership with a real estate company (Crombie REIT) that owns most of their store buildings. This provides financial stability and a valuable pool of rental income, acting as a financial safety net.
The Good: Steady Cash Flow. People always need groceries. This means the company is stable and pays a reliable dividend (1.7%) that has been steadily increasing, perfect for income investors.
Investor Concern: Tough Battle. They are caught in a vicious fight with Loblaw and Metro. They need to prove they can raise prices enough to cover their own costs without losing customers to cheaper places like Walmart or Dollarama.
Earnings Date: Thursday, December 11th (Before Market Open)
Costco ($COST):
The Big Spender Checkup
Costco operates a unique membership-based warehouse club model. It focuses on selling a limited selection of high-quality goods at razor-thin margins. Its loyalty (with membership renewal rates over 90%) makes it the ultimate bellwether for the savvy, mid-to-high income shopper. Their results show whether families feel confident enough to buy in bulk.
What to Watch: Membership Renewal Rate. This is the most important number. If over 90% of customers renew their annual membership, it proves the value is worth the fee, and loyalty is rock-solid. We also watch Same-Store Sales to see how much people are spending in those massive shopping carts.
Key Investor Fact: The Special Dividend. Costco ended its last fiscal year with a massive cash pile of over $14 billion, far exceeding its long-term debt, giving it immense financial flexibility. Every few years, they reward shareholders with a huge "special dividend" (an extra, one-time cash payout) that excites investors.
The Good: Loyalty is Everything. By operating on razor-thin profits, they consistently deliver the best value, making customers fiercely loyal and ensuring those cash-cow membership fees keep rolling in.
Investor Concern: Costco stock is very expensive compared to other major retailers, meaning the market demands spectacular growth. The stock's lag this year is due to investor fear that recent sales growth is decelerating (slowing down), suggesting the massive valuation may no longer be justified if the consumer is pulling back.
Earnings Date: Thursday, December 11th (After Market Close)
Adobe Inc. ($ADBE):
The Creative Industry's Health
Adobe is the undisputed leader in creative software, owning industry standards like Photoshop, Illustrator, and Premiere Pro, which are packaged in its profitable Creative Cloud subscription service. Its earnings are crucial for assessing the health of corporate digital marketing budgets and the willingness of creative professionals to pay for sophisticated Generative AI tools.
What to Watch: Subscription Growth (ARR). We look at Annual Recurring Revenue (ARR), which is the guaranteed subscription money they will collect over the next year. If this is growing, it means companies are confident and investing in creative work.
Key Investor Fact: The Subscription Goldmine. Adobe wisely switched from selling software boxes to selling monthly subscriptions. This gives them incredibly reliable, high-profit cash flow that investors love.
The Good: AI Fortress. Adobe is embedding its own Generative AI (called Firefly) directly into Photoshop and other tools. This makes it much harder for new AI startups to steal their customers.
Investor Concern: AI Competition. Despite its lead, the competition from new, simpler AI tools (like Canva or OpenAI's image tools) is getting fierce, forcing Adobe to constantly prove its value. Leading to it’s 20% drop this year.
Earnings Date: Wednesday, December 10th (After Market Close)
Broadcom Inc. ($AVGO):
The AI Infrastructure Enabler
Broadcom is a major and highly diversified semiconductor and software giant. While its core business is in networking and custom chips, it has become a central player in the AI revolution. Its earnings are a crucial report card for AI infrastructure spending by massive tech companies(like Google, Meta, etc.), which use Broadcom's custom chips and networking solutions to train their AI models.
What to Watch: AI Chip Sales. The key question: How much money did they make selling custom chips to the biggest tech companies to build their AI supercomputers? We want to see this number grow fast.
Key Investor Fact: A Foot in Every Door. Broadcom is huge. It not only makes chips but also owns major business software companies. This diversification provides stability even when one area of tech slows down.
The Good: Direct AI Winner. Broadcom is like the company that sells shovels during a gold rush. Its products are essential for the massive, non-stop spending on AI infrastructure by Big Tech.
Investor Concern: AI Bubble Fears. Given the stock is up 75% this year, there is concern that the AI boom is overhyped and that these AI chips are overvalued. Investors worry that if Big Tech slows its spending on new AI data centers, Broadcom’s recent, massive revenue surge could stall.
Earnings Date: Thursday, December 11th (After Market Close)
Oracle Corporation ($ORCL):
The Cloud Giant's Revival
Oracle is a veteran tech company famous for its huge corporate databases (the foundation of almost every large business's data storage). Now, they are in a high-stakes race to catch up with Amazon (AWS) and Microsoft (Azure) in the cloud computing market with their Oracle Cloud Infrastructure (OCI). Their success hinges on securing massive, multi-billion-dollar deals with major clients who are building new AI infrastructure.
What to Watch: Future Revenue (RPO). Look for their Remaining Performance Obligations (RPO). This means the total amount of money clients have already signed contracts to pay them over the next few years. A high RPO confirms their long-term shift to the cloud is working.
Key Investor Fact: The AI Connection. Oracle has secured multi-billion-dollar contracts to provide cloud space for major AI players, including OpenAI (the creator of ChatGPT), making them an unexpected, but huge, player in the AI race.
The Good: Big Names Switching to OCI. Revenue growth proves its ability to take market share from rivals, with major clients like Nvidia, Uber, and TikTok recently choosing Oracle's Cloud Infrastructure (OCI) for their high-performance computing needs.
Investor Concern: Too Much Debt. To build all this cloud infrastructure for new clients, Oracle has taken on a lot of new debt. Investors are watching to see if the growth in sales and profit is worth the increased financial risk.
Earnings Date: Wednesday, December 10th (After Market Close)
🏦 Final Verdict and the Central Bank Showdown
The six earnings reports we've covered will paint a detailed picture of consumer health and technology spending. But the true volatility this week is being driven by the two central bank announcements today:
🇨🇦 Bank of Canada: After four cuts earlier in 2025, the BoC is widely expected to hold the overnight rate steady at 2.25%. Recent strong job numbers and GDP growth have convinced the Bank that enough has been done to stabilize the economy.
🇺🇸 U.S. Federal Reserve: The Fed is expected to deliver its third consecutive quarter-point cut, lowering its benchmark rate. This move is driven by signs of labour market softness in the U.S., despite inflation still being above their target. Analysts expect a "hawkish cut" (meaning they cut rates but signal a much slower pace of future cuts), which may temper the market's enthusiasm
The most valuable takeaway from these decisions will not be the rate move itself, but the language used by the central bank heads. Investors will be listening closely for clues about whether we can expect more rate changes in 2026.
——————————————
This isn’t investment advice… just insights to help you learn, stay informed, build awareness, and make smarter investing decisions over time.
Your Finance Coach, Finance Femster