Market Update
Lululemon Athletica Quarterly Sales Rise 19%, Expands Stock Repurchase Plan
Scott Peters
08 Dec, 2023
New York City
Luluemlon Athletica decreased 2% to $454.67 after the specialty apparel retailer reported quarterly results and issued a weaker-than-expected holiday sales outlook.
Total revenue in the fiscal third quarter ending in October increased 19% to $2.2 billion, driven by a 12% sales increase in North America and a 49% surge in international markets.
Comparable sales increased by 9%, including comparable store sales of 9%, and direct-to-consumer sales soared by 18% from a year ago.
Net income in the quarter decreased to $248.7 million from $255.5 million, and diluted earnings per share fell to $1.97 from $2.0 a year ago.
During the third quarter, the athletic apparel retailer purchased 0.6 million shares of its own common stock at an average price of $380.88 per share for a cost of $210.8 million.
As of the end of the fiscal third quarter on October 29, the company had $243.2 million available for stock repurchase, and the board of directors approved an additional stock repurchase plan of up to $1.0 billion.
The company offered a cautious sales growth outlook for the upcoming holiday season.
For the fiscal fourth quarter, the retailer expects net revenue to be in the range of $3.135 billion to $3.170 billion, representing growth of 13% to 14%.
Diluted earnings per share are expected to be in the range of $4.85 to $4.93 for the quarter, assuming a tax rate of approximately 30%.
Dollar General Estimated Sales Growth Weakness to Persist
Scott Peters
08 Dec, 2023
New York City
Dollar General Corp. increased 2.8% to $137.70 after the deep discount retailer reported better-than-expected quarterly results and reaffirmed its fiscal year outlook for earnings and comparable sales.
Revenue in the fiscal third quarter ending on November 3 increased 2.4% to $9.7 billion, and same-store sales declined 1.3%.
Net income in the third quarter dropped 47.5% to $276.2 million from $526.2 million, and diluted earnings per share decreased 45.9% to $1.26 from $2.33 a year ago.
As of November 3, 2023, total merchandise inventories, at cost, were $7.4 billion compared to $7.1 billion as of October 28, 2022, a decrease of 1.8% on a per-store basis.
The company did not repurchase any of its shares in the quarter, and the retailer said $1.4 billion is available for future purchases at the end of the fiscal third quarter.
The company's board of directors declared a quarterly cash dividend of 59 cents payable on January 23 to shareholders on record on January 9.
The company forecasted fiscal year 2023 same store sales to range between flat and a decline of 1.0%, and net sales growth between 1.5% and 2.5%, including one fewer week this fiscal year.
The retailer estimated diluted earnings per share to decline between 29% and 34% and range between $7.10 and $7.60.
Chewy Swung to Quarterly Loss, Gross Margin Expands to Record High
Scott Peters
07 Dec, 2023
New York City
Chewy declined 10.8% to $17.25 after the online pet food and products store reported weaker-than-expected revenue and the company swung to a loss in the quarter.
Revenue in the fiscal third quarter ending in October rose 8.2% to $2.73 billion from $2.53 billion, and the company swung to a net loss of $35.8 million from a profit of $2.3 million, and diluted earnings per share swung to a loss of 8 cents from a profit of 1 cent a year ago.
Gross margin expanded 10 basis points from a year ago to a record high of 28.5%, and autoship customer sales increased 12.8% to $2.1 billion, representing 76.4% of total sales.
Toll Brothers Quarterly Earnings and Home Backlog Declined
Scott Peters
06 Dec, 2023
New York City
Toll Brothers increased 2% to $89.0 after the luxury home builder reported better-than-expected quarterly results.
Revenue in the fiscal fourth quarter ending in October declined to $3.02 billion from $3.7 billion, net income decreased to $445.5 million from $640.5 million, and diluted earnings per share dropped to $4.11 from $5.63 a year ago.
The backlog of homes at the end of October declined 19% to 6,578 and the value of the backlog fell 22% to $6.95 billion.
During the quarter, the company repurchased approximately 4.3 million shares at an average price of $75.70 per share, for a total of $325.5 million.
In the fiscal year, the home builder repurchased approximately 7.9 million shares at an average price of $72 per share, for a total purchase price of $565.9 million.
The home developer estimated home deliveries in the fiscal 2024 first quarter to range between 1,800 and 1,900 units and the average delivery price per unit to range between $985,000 and $1.05 million.
U.S. Employment Expanded 199,000 In November, Jobless Rate Eased to 3.7%
Brian Turner
08 Dec, 2023
New York City
Nonfarm payrolls increased 199,000 in November, following the 150,000 job gains in October, the U.S. Bureau of Labor Statistics reported Friday.
September job gains were downwardly revised by 35,000 to 262,000, and October job gains were unrevised.
Average hourly earnings, an indicator of wage inflation, rose 12 cents, or 0.4%, in the month and advanced 4% over the last 12 months.
The unemployment rate declined to 3.7%, and the number of unemployed people changed little to 6.3 million.
In November, the number of long-term unemployed, those jobless for 27 weeks or more, edged down to 1.2 million, accounting for 18.3% of all unemployed persons.
U.S. Movers: Broadcom, Cooper Companies, DocuSign, lululemon, RH, Vail Resorts
Scott Peters
08 Dec, 2023
New York City
Broadcom decreased 0.3% to $922.0 after the chipmaker reported better-than-expected quarterly results.
Revenue in the fiscal fourth quarter increased to $9.3 billion from $8.93 billion, net income advanced to $3.5 billion from $3.3 billion, and diluted earnings per share rose to $8.25 from $7.83 a year ago.
Semiconductor solution revenue increased 3% to $7.33 billion, and infrastructure revenue rose 7% to $1.97 billion.
The advanced chipmaker guided current fiscal year revenue of $50 billion.
Luluemlon Athletica decreased 2% to $454.67 after the specialty apparel retailer reported quarterly results and issued a weaker-than-expected holiday sales outlook.
Total revenue in the fiscal third quarter ending in October increased 19% to $2.2 billion, driven by a 12% sales increase in North America and a 49% surge in international markets.
Comparable sales increased by 9%, including comparable store sales of 9%, and direct-to-consumer sales soared by 18% from a year ago.
Net income in the quarter decreased to $248.7 million from $255.5 million, and diluted earnings per share fell to $1.97 from $2.0 a year ago.
During the third quarter, the athletic apparel retailer purchased 0.6 million shares of its own common stock at an average price of $380.88 per share for a cost of $210.8 million.
As of the end of the fiscal third quarter on October 29, the company had $243.2 million available for stock repurchase, and the board of directors approved an additional stock repurchase plan of up to $1.0 billion.
The company offered a cautious sales growth outlook for the upcoming holiday season.
For the fiscal fourth quarter, the retailer expects net revenue to be in the range of $3.135 billion to $3.170 billion, representing growth of 13% to 14%.
Diluted earnings per share are expected to be in the range of $4.85 to $4.93 for the quarter, assuming a tax rate of approximately 30%.
RH dropped 8.5% to $257.51 after the furniture retailer reported weaker-than-expected revenue and posted an unexpected loss in its latest quarter.
Net revenue in the third quarter declined to $751.2 million from $869.0 million, and the company swung to a net loss of $2 million from a profit of $98.7 million.
Diluted earnings per share were a loss of 12 cents compared to a profit of $4.17 a year ago.
The company attributed the decline in sales to the "frozen housing market" because of elevated home prices and rising mortgage rates combined with higher promotional activities in the furniture industry.
The company narrowed its revenue guidance range for the year to $3.06 billion to $3.08 billion and now expects its adjusted operating margin to be in the range of 13.6% to 14.0%.
Docusign declined 0.9% to $47.0 after the online service provider reported higher-than-expected quarterly earnings but offered a muted outlook.
Total revenue in the fiscal third quarter increased 9% to $700.4 million from $645.6million, and the company swung to a net income of $38.8 million from a loss of $29.9 million, and diluted earnings per share were 19 cents compared to a loss of 15 cents a year ago.
The company guided fiscal fourth quarter revenue to fall between $696 million and $700 million, subscription revenue between $679 million and $688 million, and billings between $858 million and $768 million.
Cooper Companies fell 1.4% to $340.0 despite the eyecare company reporting organic revenue growth and higher earnings in its latest quarter.
Revenue in the fiscal fourth quarter increased 9% to $927.1 million from $848.1 million, net income advanced to $84.5 million from $65.6 million, and diluted earnings per share rose to $1.70 from $1.32 a year ago.
The company announced a four-to-one stock split effective February 16, and the board of directors terminated the semi-annual dividend.
The maker of contact lenses and fertility solutions forecasted fiscal 2024 sales to range between $3.809 billion and $3.877 billion, an increase between 6% and 8%, and non-GAAP diluted earnings per share between $13.60 and $14.0.
Vali Resorts declined 0.8% to $215.25 after the ski resort operator reported weaker-than-expected quarterly sales and earnings.
Revenue in the fiscal first quarter decreased to $258.5 million from $279.4 million, net loss expanded to $175.5 million from $136.9 million, and diluted loss per share rose to $4.60 from $3.40 a year ago.
The ski resort operator increased quarterly cash dividend per share to $2.06 from $1.91 a year ago and payable on January 9 to shareholders on record on December 26.
The company reiterated its fiscal year 2024 earnings in the range between $316 million and $394 million.
U.S. Stocks Struggled, Treasury Yields Declined after Nonfarm Payrolls Accelerated
Barry Adams
08 Dec, 2023
New York City
Stocks turned lower, and Treasury yields perked up after the release of the nonfarm employment report.
Market indexes declined after job gains accelerated in November, the unemployment rate slightly declined, and wage increases were in line with expectations.
Market indexes have been rallying for weeks after the Federal Reserve held rates two times in a row, and subsequent inflation reports have confirmed a cooling trend.
Investors have remained focused on labor markets, and a series of reports covering job openings, weekly jobless claims, and private sector employment have confirmed a cooling but resilient market.
For the week, the Nasdaq is likely to close higher and extend weekly gains for the sixth consecutive week, and the S&P is likely to close down after rallying for five weeks in a row.
Nonfarm Payroll Increase Accelerated in November
Nonfarm payrolls increased 199,000 in November, following the 150,000 job gains in October, the U.S. Bureau of Labor Statistics reported Friday.
September job gains were downwardly revised by 35,000 to 262,000, and October job gains were unrevised.
Average hourly earnings, an indicator of wage inflation, rose 12 cents, or 0.4%, in the month and advanced 4% over the last 12 months.
The unemployment rate declined to 3.7%, and the number of unemployed people changed little to 6.3 million.
In November, the number of long-term unemployed, those jobless for 27 weeks or more, edged down to 1.2 million, accounting for 18.3% of all unemployed persons.
Carrier Global and Honeywell in a $5 billion deal
Carrier Global jumped 5.9% to $56.10 after the company agreed to sell its Global Access Solution unit for $4.95 billion in cash to Honeywell.
The purchase price is 13 times operating earnings, including tax benefits and run-rate cost synergies.
"Honeywell's strong track record delivering building automation products and services makes this a natural fit that will create a leading security platform with forecasted annual revenue in excess of $1 billion," said Vimal Kapur, Chief Executive Officer, Honeywell.
U.S. Indexes and Yields
The S&P 500 index gained 0.7% to 4,581.86, and the Nasdaq Composite increased 1.3% to 14,322.25.
The yield on 2-year Treasury notes increased to 4.70%, 10-year Treasury notes inched higher to 4.23%, and 30-year Treasury bonds increased to 4.32%.
Crude oil decreased $1.50 to $70.84 a barrel, and natural gas prices rose 1 cent to $2.59 a thermal unit.
Gold increased $0.4 to $2,028.34 an ounce on shifting investors' expectations that the Federal Reserve is more likely to cut rates sooner than expected in 2024.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.77.
U.S. Stock Movers
Broadcom decreased 0.3% to $922.0 after the chipmaker reported better-than-expected quarterly results.
Revenue in the fiscal fourth quarter increased to $9.3 billion from $8.93 billion, net income advanced to $3.5 billion from $3.3 billion, and diluted earnings per share rose to $8.25 from $7.83 a year ago.
Semiconductor solution revenue increased 3% to $7.33 billion, and infrastructure revenue rose 7% to $1.97 billion.
The advanced chipmaker guided current fiscal year revenue of $50 billion.
Lulu Lemon Athletica decreased 2% to $454.67 after the specialty apparel retailer reported quarterly results and issued a weaker-than-expected holiday sales outlook.
RH dropped 8.5% to $257.51 after the furniture retailer reported weaker-than-expected revenue and posted an unexpected loss in its latest quarter.
Docusign declined 0.9% to $47.0 after the online service provider reported higher-than-expected quarterly earnings but offered a muted outlook.
Cooper Companies fell 1.4% to $340.0 despite the eyecare company reporting organic revenue growth and higher earnings in its latest quarter.
Vali Resorts declined 0.8% to $215.25 after the ski resort operator reported weaker-than-expected quarterly sales and earnings.