Market Update
Advance Auto Net Drops 35%, Retailer Pushes More Store Brands
Scott Peters
16 Nov, 2022
New York City
Advance Auto Parts plunged 16.3% to $153.77 after the retailer reported mixed quarterly results and reiterated weak annual outlook.
Net sales in the third quarter increased 0.8% to $2.64 billion and comparable store sales declined 0.7%.
Gross profit margin decreased 44 basis points to 44.7% of net sales.
In the quarter, operating income margin decreased to 6.7% of net sales compared to 8.7% a year ago.
Net income in the quarter dropped 35% to $111 million from $169.8 million and diluted earnings per share fell to $1.84 from $2.68 a year ago.
The LIFO, Last In First Out, impact on earnings increased to $67.5 million from $29.4 million a year ago.
Free Cash Flow
In the third quarter, net cash provided by operating activities declined to $483.1 million from $924.9 million a year ago.
The decrease was primarily driven by lower Net income and working capital.
Free cash flow in the quarter fell to $149.5 million from $734.0 million in the same period a year ago.
Outlook
The retailer reiterated its annual sales outlook between $11.0 billion and $11.2 billion and comparable store sales to range between flat and 0.1% decline.
The company also revised its free annual cash flow outlook to minimum $300 million from minimum $700 million.
The company reiterated its new store and branch opening in the range between 125 and 150 in the year.
The retailer opened 37 new stores and branches in the third quarter.
Dividend and Stock Repurchase
The company declared a cash dividend of $1.50 per share to be paid to shareholders on record on December 16, 20222 on January 3, 2023.
In the third quarter, the company repurchased 0.4 million shares of its common stock at an aggregate cost of $75.0 million, or an average price of $168.93 per share.
At the end of the quartet, the company still have $1.0 billion available in its stock repurchase program.
Movers: Advance Auto Parts, Carnival Corp, Krispy Kreme, Lowe's Companies, Similarweb, Target, TJX
Scott Peters
16 Nov, 2022
New York City
Advance Auto Parts plunged 16.3% to $153.77 after the retailer reported mixed quarterly results and reiterated weak annual outlook.
Net sales in the third quarter increased 0.8% to $2.64 billion and comparable store sales declined 0.7%.
Gross profit margin decreased 44 basis points to 44.7% of net sales.
Net income in the quarter dropped to $111 million from $169.8 million and diluted earnings per share fell to $1.84 from $2.68 a year ago.
In the third quarter, the company repurchased 0.4 million shares of its common stock at an aggregate cost of $75.0 million, or an average price of $168.93 per share.
The retailer reiterated its annual sales outlook between $11.0 billion and $11.2 billion and comparable store sales to range between flat and 0.1% decline. The company also revised its free annual cash flow outlook to minimum $300 million from minimum $700 million.
Carnival Corp dropped 12.9% to $9.71 after the cruise operators said it plans to offer $1 billion of convertible debt as part of its debt refinancing plan.
The company priced its 5.75% senior notes convertible offering at equivalent to $13.39 a share, 20% premium of the November 15 , 2022 closing prices. The notes will mature at the end of December 2027.
Krispy Kreme Inc jumped 0.7% to $14.59 after the bagel chain reported a rise in third quarter sales and a wider loss.
Revenue in the third quarter increased 10.1% from a year ago to $377.5 million, or 13.4% in constant currency or organic revenue increase of 12.0%.
Net loss in the quarter widened to $11.8 million from $8.1 million and diluted loss per share increased to 8 cents to 4 cents.
The company guided full-year 2022 net revenue in the range of $1.49 billion to $1.52 billion and capital expenditure between $105 million and $110 million, about 7% of total sales.
Lowe's Companies soared 5.5% to $220.18 and the home improvement retailer lifted its full-year earnings outlook and said U.S. comparable sales rose 3%.
Total sales in the third quarter increased to $23.5 billion from $22.9 billion a year ago and total comparable sales increased 2.2% and the U.S. comparable store sales rose 3.0%.
Net income in the quarter dropped to $154 million from $1.78 billion and diluted earnings per share fell to 25 cents to $2.74 a year ago.
Excluding pre-tax non-cash impairment charges of $2.1 billion linked to the Canadian operations, third quarter quarter earnings were $3.27 a share.
The company guided full-year 2022 sales outlook between $97 billion and $98 billion and comparable sales are estimated to fall in the range of flat to a decline of 1.0%.
Sales in the 53rd week of 2022 are estimated to fall between $1.0 billion and $1.5 billion.
Similarweb Ltd plunged 23.5% to $5.06 after the company reported larger loss in the third quarter and said it plans to cut its global workforce by 10%.
Revenue in the quarter increased 41% to $50 million from $35.6 million a year ago.
Net loss in the third quarter expanded to $21 million from $17.3 million and diluted loss per share rose to 28 cents from 23 cents a year ago.
The average customer revenue increased 15% to $51,570 on 21% increase in number of customers to 3,911.
The company lowered its fourth quarter revenue in the range of $50.5 million and $50.9 million, an increase of 26% from the mid-point of the range.
Target Corp plunged 13.4% to $154.79 after the retailer said third quarter earnings fell, lowered its fourth quarter outlook and estimated weak holiday sales.
Sales in the third quarter ending on October 29, 2022 increased 3.3% to $26.1 billion from $25.3 billion a year ago.
In the quarter, net earnings plunged 52.1% to $712 million from $1.49 billion and diluted earnings per share fell to $1.54 from $3.04 a year ago.
Comparable sales in the third quarter increased 2.7% on top of 12.7% in the previous year's period, driven by 1.4% increase in store traffic and 1.3% increase in average ticket.
The company said sales softness is likely to persist in the fourth quarter and estimated "centered around a low-single digit decline in comparable sales."
The company said it plans to cut costs between $2 billion and $3 billion over the next three years after sales have surged 40% since 2019.
Inventories rose at a slower pace to $17.1 billion at the end of the third quarter from $14.96 billion a year ago.
TJX Companies added 3.7% to $78.09 after the close-out retailer reported a decline in sales but better-than-expected earnings.
Third quarter revenue declined 3% to $12.2 billion from $12.5 billion a year ago.
Net income in the third quarter inched up to $1.06 billion from $1.02 billion and diluted earnings per share increased to 91 cents from 84 cents a year ago.
U.S. same store sales in the quarter declined 2% after rising 16% in the quarter a year ago, driven by 16% fall in Home Goods and 3% increase in combined sales at TJ Maxx and Marshalls.
Retail Sales Rise In October On Resilient Consumers
Brian Turner
16 Nov, 2022
New York City
Retail sales rose in October driven by higher auto and gasoline sales but the weakness in electronics and appliance sales persisted, the U.S. Census Bureau reported Wednesday.
Retail sales, unadjusted for inflation, rose 1.3% in October from September and 8.3% from a year ago, on a rebound in auto and gasoline sales.
Auto dealers sales increased 1.3% from September and 5.2% from a year ago after supply chain problems eased and gasoline stations sales rose 4.1% and 17.8% respectively.
Department stores and electronics and appliance were the only two categories where sales declined from the month and a year ago.
Electronics and appliances sales in October declined 0.3% from September and plunged 12.1% from a year ago.
Department store sales declined 2.1% from September and dropped 1.6% from a year ago.
Food services and drinking places sales increased 1.6% from September and 14.1% from a year ago.
Industrial Output Declined In October
Brian Turner
16 Nov, 2022
New York City
Industrial output declined 0.1% in October from the downwardly revised 0.1% increase in September, the Federal Reserve reported Wednesday.
Capacity utilization rate increased by 0.2 percentage points to 79.9%. a rate that is 0.3 percentage point above its 50-year long-run average.
In October, the index for mining eased 0.4%, and the index for utilities decreased 1.5%.
Total industrial production in October was 3.3% higher than a year ago.
Major Averages Down On Retail Weakness, Target Net Income Fell 50%
Barry Adams
16 Nov, 2022
New York City
Stocks on Wall Street headed lower after Target issued gloomy holiday sales outlook and investors digested latest retail sales and industrial output data.
Retail sector stocks were on the decline after Target Corp reported a sharp fall in its latest quarterly earnings but showed a marked improvement in its bloated inventories.
But what ailed the market was the gloomy outlook for the holiday period as the retailer said consumers are sticking to the basics and avoiding full-price items and discretionary purchases.
The S&P 500 index fell 0.5% to 3,971.78 and the Nasdaq Composite index dropped 1.4% to 11,199.00.
Crude oil fell $2.30 to $84.55 a barrel and natural gas futures declined 23 cents to $5.81 a thermal unit.
The yield on 2-yearTreasury notes increased to 4.37%, 10-year Treasury notes declined to 3.87% and 30-year bonds dropped to 3.92%.
Resilient Consumers Support Retail Sales
Retail sales rose in October driven by higher auto and gasoline sales but the weakness in electronics and appliance sales persisted, the U.S. Census Bureau reported Wednesday.
Retail sales, unadjusted for inflation, rose 1.3% in October from September and 8.3% from a year ago, on a rebound in auto and gasoline sales.
Auto dealers sales increased 1.3% from September and 5.2% from a year ago after supply chain problems eased and gasoline stations sales rose 4.1% and 17.8% respectively.
Department stores and electronics and appliance were the only two categories where sales declined from the month and a year ago.
Electronics and appliances sales in October declined 0.3% from September and plunged 12.1% from a year ago.
Department store sales declined 2.1% from September and dropped 1.6% from a year ago.
Food services and drinking places sales increased 1.6% from September and 14.1% from a year ago.
Industrial Output Declined
Industrial output declined 0.1% in October from the downwardly revised 0.1% increase in September.
Capacity utilization rate increased by 0.2 percentage points to 79.9%, the Federal Reserve reported Wednesday.
Total industrial production in October was 3.3% higher than a year ago.
U.S. Movers
Advance Auto Parts plunged 16.3% to $153.77 after the retailer reported mixed quarterly results and reiterated weak annual outlook.
Carnival Corp dropped 12.9% to $9.71 after the cruise operators said it plans to offer $1 billion of convertible debt as part of its debt refinancing plan.
Lowe's Companies soared 5.5% to $220.18 and the home improvement retailer lifted its full-year earnings outlook and said U.S. comparable sales rose 3%.
Target stock plunged 13.4% to $154.79 after the retailer said third quarter earnings fell, lowered its fourth quarter outlook and estimated weak holiday sales.
Lowe's Companies lifted its full-year earnings outlook and said U.S. comparable sales rose 3%.
16 Nov, 2022
Cooler Inflation Sparked Stock Rally Cut by Missiles Landing In Poland
Barry Adams
15 Nov, 2022
New York City
Stocks on Wall Street opened sharply higher after wholesale inflation cooled in October, the second inflation measure to cool in as many week.
The lighter-than-expected inflation data offered another ammunition to policymakers advocating a slower rate hike at the next policy meeting in December.
Benchmark indexes trimmed most of the day's gains after news reports suggested Russian missiles landed in Poland, killing two people.
Crude oil prices rose 94 cents to $86.82 a barrel and natural gas prices increased 13 cents to $6.14 a thermal unit.
In stock trading, indexes advanced and tech stocks led the gainers.
The S&P 500 index advanced 0.9% to 3,991.73 and the Nasdaq Composite index increased 1.5% to 11,358.41.
Among widely held tech stocks, Apple, Amazon, Tesla, Microsoft and Alphabet jumped between 0.2% and 2%.
Technology, real estate, communications systems, consumer staples and financial sectors jumped between 0.5% and 1.2%.
Wholesale Inflation Cools In October
The Producer Price Index increased 0.2% in October from the previous month, matching the downwardly revised rate in September, the U.S. Bureau of Labor Statistics said Tuesday.
The 5.7% jump in gasoline prices drove the goods cost 0.6% higher, the fastest increase since 2.2% rise in June.
However, services costs declined 0.1% in the month, the first decline since November 2020.
The PPI rose 8.0% from a year ago following the 8.4% surge in September and the smallest increase since July 2021.
The yield on 2-year Treasury notes fell to 4.34%, 10-year notes declined to 3.77% and 30-year bonds eased to 3.97%.
U.S. Market Movers
Taiwan Semiconductor soared 11.9% to $81.21 after Warren Buffett controlled Berkshire Hathaway said in a filing with the Securities and Exchange Commission purchased $4.1 billion of stock in the third quarter.
Home Depot increased 2.2% to $314.27 after the retailer reported better-than-expected revenue and earnings in its latest quarter and reaffirmed its annual outlook.
Energizer Holdings Inc jumped 6.9% to $31.67 after the company reported stronger-than-expected quarterly results.
Walmart Inc soared 7.8% to $148.20 after the retailer said fiscal third quarter revenue rose 9% to $152.81 billion and swung to a net loss of $1.8 billion or 66 cents a share from a profit of $3.11 billion or $1.11 a share a year ago.
The retailer also announced a nationwide opioid settlement of $3.1 billion without admitting liabilities with state, local and tribal governments.
The company also said the boost in sales at its e-commerce India-based arm, Flipkart.com, also helped results in the quarter.
Getty Images Holdings Inc dropped 13.6% to $6.02 after the stock image marketplace operator reported quarterly earnings ahead of expectations but sounded cautious outlook.
Bath & Body Works jumped 3.5% to $34.25 after hedge fund Third Point controlled by Dan Loeb revealed a stake of $265 million in the company.
Vodafone Group Plc declined 6.4% to $11.54 after the mobile communication services provider lowered its earnings and cash flow outlook.
Eurozone Economic Growth Slows
Seasonally adjusted eurozone gross domestic product in the third quarter rose 0.2% from the second quarter, Eurostat said Tuesday.
From a year ago, the economy advanced 2.1% in the third quarter after rising at 4.3% in the second quarter.
On a monthly basis, seasonally adjusted eurozone and EU employment in the third quarter expanded at a slower pace of 0.2% following a 0.4% rise in the second quarter, Eurostat also reported.
Eurozone Employment Growth Slows
The eurozone employment on an unadjusted basis increased 1.7% in the third quarter compared to 2.7% in the second quarter and in the EU expanded 1.5% from 2.4% on an annual basis.
Eurozone International Trade Swings to Deficit
The statistical agency also reported imports from outside the region soared at a faster pace than than exports in September.
Imports in the month soared 44.5% and exports advanced 23.6% from a year ago resulting in a large trade deficit.
International trade swung to a deficit of 34.4 billion euros from a surplus of 6.7 billion euros a year ago.
German wholesale price increase slowed to 17.4% in October from 19.9% in September, Destatis reported Tuesday.
The French jobless rate fell to 7.3% in the third quarter from 7.4% in the second quarter, Insee reported Tuesday.
European Markets Extend Multi-month Gains
European markets extended gains for the fourth day in a row and investors focused on the barrage of domestic economic data.
The DAX index increased 0.5% to 14,378.51, the CAC-40 index advanced 0.5% to 6,641.66 and the FTSE 100 index declined 0.2% to 7,369.44.
The euro inched lower to $1.031 and the British pound edged up to $1.812.
Brent crude oil gained 53 cents to $93.56 a barrel and TTF natural gas prices jumped 9.2% to 124.10 euros a MWh.
Europe Market Movers
Credit Suisse declined 0.2% to 4.28 Swiss francs after the troubled investment bank said it plans to sell a substantial portion of its securitized products group to Apollo Global Management.
Leoni AG fell 0.8% to
Movers: Bath & Bodyworks, Energizer, Getty Images, Home Depot, Taiwan Semiconductor, Vodafone, Walmart
Scott Peters
15 Nov, 2022
New York City
The S&P 500 index advanced 1.02% to 4,009.44 and the Nasdaq Composite index surged 2.1% to 11,429.39.
Among widely held tech stocks, Apple, Amazon, Tesla, Microsoft and Alphabet jumped between 2% and 4%.
Technology, real estate, communications systems, consumer staples and financial sectors jumped between 1.5% and 2.2%.
Taiwan Semiconductor soared 11.9% to $81.21 after Warren Buffett controlled Berkshire Hathaway said in a filing with the Securities and Exchange Commission purchased $4.1 billion of stock in the third quarter.
Home Depot increased 2.2% to $314.27 after the retailer reported better-than-expected revenue and earnings in its latest quarter and reaffirmed its annual outlook.
Energizer Holdings Inc jumped 6.9% to $31.67 after the company reported stronger-than-expected quarterly results.
Walmart Inc soared 7.8% to $148.20 after the retailer said fiscal third quarter revenue rose 9% to $152.81 billion and swung to a net loss of $1.8 billion or 66 cents a share from a profit of $3.11 billion or $1.11 a share a year ago.
The retailer also announced a nationwide opioid settlement of $3.1 billion without admitting liabilities with state, local and tribal governments.
The company also said the boost in sales at its e-commerce India-based arm Flipkart.com, also helped results in the quarter.
Getty Images Holdings Inc dropped 13.6% to $6.02 after the stock image marketplace operator reported quarterly earnings ahead of expectations but sounded cautious outlook.
Bath & Body Works jumped 3.5% to $34.25 after hedge fund Third Point controlled by Dan Loeb revealed a stake of $265 million in the company.
Vodafone Group Plc declined 6.4% to $11.54 after the mobile communication services provider lowered its earnings and cash flow outlook.
European Markets Extend Gains for 4th Day, Eurozone Q3 GDP Growth Slows
Bridgette Randall
15 Nov, 2022
Frankfurt
European markets extended gains for the fourth day in a row and investors focused on the barrage of domestic economic data.
Seasonally adjusted eurozone gross domestic product in the third quarter rose 0.2% from the second quarter, Eurostat said Tuesday.
From a year ago, the economy advanced 2.1% in the third quarter after rising at 4.3% in the second quarter.
On a monthly basis, seasonally adjusted eurozone and EU employment in the third quarter expanded at a slower pace of 0.2% following a 0.4% rise in the second quarter, Eurostat also reported.
The eurozone employment on an unadjusted basis increased 1.7% in the third quarter compared to 2.7% in the second quarter and in the EU expanded 1.5% from 2.4% on an annual basis.
The statistical agency also reported imports from outside the region soared at a faster than pace than exports in September.
Imports in the month soared 44.5% and exports advanced 23.6% from a year ago resulting in a large trade deficit.
International trade swung to a deficit of 34.4 billion euros from a surplus of 6.7 billion euros a year ago.
German wholesale price increase slowed to 17.4% in October from 19.9% in September, Destatis reported Tuesday.
The French jobless rate fell to 7.3% in the third quarter from 7.4% in the second quarter, Insee reported Tuesday.
The DAX index increased 0.5% to 14,378.51, the CAC-40 index advanced 0.5% to 6,641.66 and the FTSE 100 index declined 0.2% to 7,369.44.
The euro inched lower to $1.031 and the British pound edged up to $1.812.
Brent crude oil gained 53 cents to $93.56 a barrel and TTF natural gas prices jumped 9.2% to 124.10 euros a MWh.
Credit Suisse declined 0.2% to 4.28 Swiss francs after the troubled investment bank said it plans to sell a substantial portion of its securitized products group to Apollo Global Management.
Leoni AG fell 0.8% to