Market Update
Broadcom Agrees to Acquire VMWare for $61 Billion
Barry Adams
26 May, 2022
New York City
Broadcom Inc agreed to acquire VMWare, Inc for $61 billion in a cash and stock deal.
The deal price is based on the closing price of Broadcom stock on May 25 and Broadcom will assume $8 billion of VMWare's net debt.
The deal diversifies Broadcom from a semiconductor company to a higher margin enterprise software company active in cloud infrastructure and network management.
VMWare acquisition is the largest tech deal only to be surpassed by the impending acquisition of Activision Blizzard by Microsoft for $69 billion and Dell's purchase of EMC for $67 billion in 2016.
Broadcom has been on an acquisition spree and completed the purchase of the troubled software developer CA Technologies for $18.9 billion in 2018 and the cyber security company Symantec for $10.7 billion in 2019.
Dell Technologies acquired EMC including VMWare in a leveraged buyout and was spun off on November 1, 2021 to repay debt.
Separately, Broadcom reported sales in the fiscal 2022 second quarter ending on May 1 increased 23% to $8.1 billion and net income jumped 78% to $2.59 billion or $5.93 per share.
Fed Policy Makers Show Willingness to Lift Rates Higher
Brian Turner
25 May, 2022
New York City
The Fed minutes of the meeting held on May 3-4 showed all participants agreed to the need to raise rates to tame inflation before it anchors deeper in the economy.
"Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings," the minutes noted.
The policy committee also showed its willingness to move the rate stance to more restrictive if necessary.
" At present, participants judged that it was important to move expeditiously to a more neutral monetary policy stance.
They also noted that a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook," the minutes highlighted.
The economic outlook prepared by the staff also highlighted that the trajectory for the GDP growth in April was in line with March projections.
The staff noted that the first quarter real GDP decline was more driven by volatile capital spending and labor markets and industrial production provided a more accurate picture of the final aggregate demand.
The bond market did not find anything new in the minutes and the yield on 10-year Treasury notes were nearly unchanged at 2.743%.
The S&P 500 index 1.3% to 3,992.25 and the Nasdaq Composite advanced 2% to 11,486.76.
S&P 500 Rebounds 1% After Fed Minutes
Barry Adams
25 May, 2022
New York City
Stocks turned higher after the Fed minutes of meetings showed that policy makers are willing to lift rates higher than anticipated by the market.
The S&P 500 index 0.95% to 3,979.25 and the Nasdaq Composite advanced 1.5% to 11,434.74.
The Fed minutes of the meeting held on May 3-4 showed all participants agreed to the need of raising rates to tame inflation before it anchors deeper in the economy.
"Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings," the minutes noted.
The policy committee also showed its willingness to move the rate stance to more restrictive if necessary.
" At present, participants judged that it was important to move expeditiously to a more neutral monetary policy stance.
They also noted that a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook," the minutes highlighted.
The bond market did not find anything new in the minutes and the yield on 10-year Treasury notes were nearly unchanged at 2.743%.
Crude oil advanced 98 cents to $110.73 a barrel and natural gas inched higher than $9 mBTU before closing at $8.87.
The natural gas futures are trading at a 14-year high.
Retail stocks were in focus after Ralph Lauren, Nordstrom and Urban Outfitters reported better-than-expected results but Dick's Sporting Goods lowered annual outlook.
Retail stocks reversed the earlier decline after Kohl's indicated that participants are active in bidding for the company despite the current market volatility.
Dick's Sporting Goods gained 9.7% to $78.14, Ralph Lauren advanced 3.3% to $94.13, Nordstrom increased 13.8% to $23.53, and Urban Outfitters jumped 15% to $20.82.
Tech stocks also led the market rally after weeks of losses.
Intuit Inc jumped 8.2% to $387.83, Docusign Inc gained 8% to $77.44, and Zoom Video soared 8.2% to $102.04.
After the close Nividia and Snowflake are scheduled to release earnings and the warehouse club Costco on Thursday.
Toll Brothers increased 8.5% to $48.15 after the luxury home builder reported strong quarterly results and said backlog of home values surged 35% to $11.7 billion.
Urban Outfitters Net Plunges On Lower Gross Margin
Scott Peters
25 May, 2022
New York City
Urban Outfitters, the specialty apparel retailer, said its revenues and earnings were hit by higher freight and raw materials costs.
Net sales increased 13.4% to $1.05 billion and net income declined on higher costs.
All five brands controlled by the company registered higher sales in the quarter. Comparable store retail sales increased in double-digit partially offset by mid-single-digit sales decline in online sales.
Comparable retail sales increased 11% from a year ago and by brand increased 18% at the Anthropologie Group, 15% at the Free People Group and 1% at Urban Outfitters.
North America sales increased to $811.3 million from $750.2 million, an increase of 8% from a year ago.
Europe and rest of the world sales surged 35% to $114.9 million from $84.9 million from a year ago.
Wholesale segment net sales increased 6%, driven by a 9% increase in Free People Group wholesale sales.
Nuuly segment net sales increased by $15.0 million driven by a "significant increase in our subscriber base."
Net income plunged to $31.5 million or 33 cents a share from $53.5 million or 54 cents a share a year ago.
Gross profit in the first quarter declined to 30.7% from 32.4%, selling and general expenses rose to 26.3% from 24.5%, and operating income declined to 4.4% from 5.9% a year ago.
Inventories at the end of the quarter shot up after Urban Outfitter branded goods sales were lower than expected, higher supply lead times also demand higher inventories, and rising costs of freight and raw materials added.
At the end of the quarter inventories rose 31.9% to $152.2 million.
In the quarter, the company repurchased and subsequently retired 2.4 million common shares for approximately $62 million and as of April 30 21.5 million common shares were remaining under the share repurchase programs.
During the quarter the retailer opened 5 new stores and closed 3 and the company plans to open 38 new stores, including 12 FP Movement stores, and close 16 existing stores.
Guidance and Outlook
The company issued no revenue or earnings guidance for the next quarter or the rest of the year.
Company and Stock
Urban Outfitters, Inc., offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of consumer brands comprising of 262 Urban Outfitters stores, 237 Anthropologie Group stores, 174 Free People stores.
The company also owns and operates 11 Menus & Venues restaurants, 4 Urban Outfitters franchisee-owned stores and 2 Anthropologie Group franchisee-owned stores as of April 30, 2022.
In total, Urban Outfitters operates a total of 684 stores with selling retail square foot space of 4.5 million and employs 23,000 associated worldwide.
Urban Outfitters gained 11.4% to $20.11 after the apparel retailer reported earnings.
In the year-so-far Urban Outfitters stock has declined 32.5%.
Toll Brothers Home Backlog Value Jumps 35%
Scott Peters
25 May, 2022
New York City
Toll Brothers, the luxury home builder, said in the latest quarter it completed 2,407 homes, an increase of 6%.
Sales increased 19% to $2.2 billion and net income rose to $220.6 million or $1.85 a share from $127.9 million or $1.01 share a year ago.
Home sale gross margin in the quarter increased to 24.1% from 21.9% a year ago.
The company's board reactivated share repurchase program on May 17 with no expiry date for $900 million or 20 million shares at the current market price.
Backlog and Signed Contracts
Net signed contract value was $3.1 billion, up 1% compared to a year ago when contracted homes declined 18% to 2,874.
Backlog value increased 35% to $11.7 billion compared to a year ago when homes in backlog were 11,768, up 16%
Guidance and Outlook
In the fiscal third quarter the home builder plans to deliver 2,750 homes and for the full-year between 11,000 and 11,500 homes.
Average home delivered price per home in the third quarter to range between $895,000 and $915,000 and for the full-year between $890,000 and $910,000.
The company estimated SG&A as a percentage of home sales revenues at 10.5% in the third quarter and 10.4% for the full-year.
The company estimates home building in 325 active communities at the end of third quarter and 370 in the full-year.
Company and Stock
Toll Brothers jumped 3% to $45.98 after the company reported earnings.
For the year so far, Toll Brothers has fallen 32.7%.
Movers: Dick's Sporting, Intuit, Lyft, Nordstrom, Urban Outfitters, Toll Brothers
Barry Adams
25 May, 2022
New York City
Dick's Sporting Goods declined 13% to $62.21 after the retailer reported better-than-expected quarterly results and lower-than-expected fall in comparable sales.
Net sales declined 7.5% to $2.7 billion and comparable sales fell 8.5% in the quarter from a year ago.
Net income declined 28% to $260.6 million and earnings per share fell to $2.47 from $3.41 a year ago.
The company also lowered its annual outlook citing macro conditions and higher inflation.
For the full-year 2022, comparable sales are expected to fall between 2% and 8% and diluted earnings per share between $7.95 and $10.15.
Intuit Inc jumped 1.7% to $365.07 after the company reported April quarter revenues increased 35% to $5.6 billion and earnings per share rose 18% to $6.28 from $5.30.
Net income in the quarter soared to $1.8 billion from $1.5 billion a year ago.
Lyft Inc gained 0.1% to $16.72 after the ride-hailing company reversed its earlier plan to increase marking. The company now plans to limit hiring and trim marketing and promotion budget following the footsteps of Uber Technologies.
Nordstrom, Inc gained 4% to $21.56 after the apparel retailer reported a surge in sales and also lifted its annual sales and profit outlook.
Nordstrom after the close reported fiscal first quarter total revenues rose 20% to $3.57 billion and net income of $20 million or 13 cents a share compared to a loss of $166 million or $1.05 a share.
The retailer revised higher earnings per share for the year between $3.38 and $3.68 from the earlier estimate of $3.18 to $3.50.
Toll Brothers jumped 3% to $45.98 after the luxury home builder said in the latest quarter it completed 2,407 homes, an increase of 6%.
Sales increased 19% to $2.2 billion and net income rose to $220.6 million or $1.85 a share from $127.9 million or $1.01 share a year ago.
Home sale gross margin in the quarter increased to 24.1% from 21.9% a year ago.
Urban Outfitters gained 1.4% to $18.99 after the apparel retailer said its revenues and earnings were hit by higher freight and raw materials costs.
Net sales increased 13.4% to $1.05 billion and net income declined on higher costs. All five brands controlled by the company registered higher sales in the quarter.
Net income plunged to $31.5 million or 33 cents a share from $53.5 million or 54 cents a share a year ago.
Wendy's soared 9% to $17.75 after its largest shareholder Trian Fund Management with a stake of 19.4% said it is exploring merger or sale or other deals for the restaurant chain.
Stocks On Defensive Ahead of Fed Minutes
Barry Adams
25 May, 2022
New York City
U.S. market indexes pointed lower after a day of volatile trading and traders await details of the latest Federal Reserve's policy meeting on May 4.
Futures on the S&P 500 index declined 0.3% to 3,977.45 and the Nasdaq Composite fell 0.3% to 11,736.28.
At the last Fed policy meeting chaired by Jerome Powell the central bank lifted its key rate by 50 basis points and highlighted the urgency of taming elevated inflation.
Markets have been volatile and accelerated the declines on the worries that the Fed may be out of policy tools in combating elevated energy prices and may lag in taming inflation for a long time to come.
Crude oil futures for the front month delivery jumped $1.50 to $111.37 a barrel.
The yield on 10-year Treasury notes declined to 2.73%.
Earnings news dominated pre-market trading after retailers and home builders release earnings.
Dick's Sporting Goods declined 13% to $62.21 after the retailer reported better-than-expected quarterly results and lower-than-expected fall in comparable sales.
The company also lowered its annual outlook citing macro conditions and higher inflation.
Urban Outfitters gained 1.4% to $18.99 after the apparel retailer said its revenues and earnings were hit by higher freight and raw materials costs.
Net income plunged to $31.5 million or 33 cents a share from $53.5 million or 54 cents a share a year ago.
Nordstrom, Inc gained 4% to $21.56 after the apparel retailer reported a surge in sales and also lifted its annual sales and profit outlook.
Toll Brothers jumped 3% to $45.98 after the luxury home builder said in the latest quarter it completed 2,407 homes, an increase of 6%.
Sales increased 19% to $2.2 billion and net income rose to $220.6 million or $1.85 a share from $127.9 million or $1.01 share a year ago.
Home sale gross margin in the quarter increased to 24.1% from 21.9% a year ago.
Advance Auto Parts Net Sales Fall 1.3% On Flat Gross Margin
Scott Peters
24 May, 2022
New York City
Advance Auto Parts, Inc after the auto parts retailer reported sales in the first quarter ending on April 23 declined 1.3% to $3.4 billion and comparable same store sales increased 0.6%.
Net earnings in the quarter fell 26% to $139.7 million or $2.26 a share from $185.9 million or $2.81 a share.
Gross profit margin in the quarter was flat at 44.6% on the improved category mix and increased store brands partially offset by inflationary costs and unfavorable channel and product mix.
Net cash used in operating activities was $54.9 million and free cash outflow was $169.8 million compared to net cash flow of $329.9 million and free cash inflow of $259.0 million in a year ago period.
The decrease was primarily driven by lower net income and working capital.
On a GAAP basis, the company's operating income was $203.3 million, or 6.0% of net sales, compared with 7.6% in the first quarter of 2021.
The retailer also opened 35 new stores and returned $403 million to shareholders through stock repurchases and dividends.
During the quarter, the company repurchased 1.1 million shares at an aggregate cost of $248.2 million at an average price of $231.41 a share.
At the end of the fiscal first quarter the company had $1.3 billion remaining in its share repurchase program.
On May 18, 2022 the company declared a regular cash dividend of $1.50 per share to be paid on July 1, 2022 to all common stockholders of record as of June 17, 2022.
Guidance and Outlook
The retailer guided full-year 2022 revenues between $11.2 billion and $11.5 billion and comparable sales to increase between 1% and 3%.
Capital expenditures between $300 million and $350 million and stock repurchase between $500 million and $700 million.
Adjusted diluted earnings per share are expected to fall between $13.30 and $13.85 compared to $12.02 in 2021.
Free cash flow is expected to exceed $775 million compared to $823 million in 2021.
Company and Stock
Advance Auto Parts, Inc declined 3.7% to $176.50 after the auto parts retailer reported quarterly results.
Advance Auto Parts has fallen 23.9% to $180.23.
Nasdaq Sinks to New Low In Volatile Trading
Barry Adams
24 May, 2022
New York City
Stocks on Wall Street plunged but indexes managed to trim losses in the final hour of trading.
The S&P 500 declined 0.81% to 3,941.48 and the Nasdaq Composite index fell 2.4% to 11,264.46.
Major indexes were on the defensive in the morning after social media app operator Snap Inc issued a revenue warning and said digital advertising sales are running below estimates in the current quarter.
Averages attempted to climb higher at least six times before trimming the losses in half in active trading.
Despite Snap's relative small footprint in the digital advertising market, nervous investors sold stocks of larger companies in the industry.
Snap Inc plunged 43% to $12.79.
Alphabet Inc declined 5% to $2,120, Meta Platforms fell 7.2% to $181.95, and Apple Inc declined 1.6% to $140.80.
High anxieties were also on display in the bond market and the yield on 10-year Treasury notes ran up to 3.21% before subsiding to 2.79%.
Crude oil futures also traded in a tight range but closed down 14 cents to $110.15 a barrel.
Home sales in April plunged 16% from a year ago largely after buyers walked away from record high prices and rising mortgage rates.
Seasonally adjusted single-family new home sales declined 16% to 591,000 annual rate, according to the estimate released by the U.S. Census Bureau and Department of Housing and Urban Development.
The sales were lower than the 750,000 annual rate that many economists had anticipated.
Home sales in April were the slowest since April 2020 when sales were at an annual pace of 623,000.
Auto parts retailer reported better than expected quarterly results.
AutoZone jumped 5.8% to $1910.22 after reporting an increase in same store sales despite cold weather and late arrival of spring and tough comparison with the previous year.
Advance Auto Parts edged down 1.7% to $180.23 after same store sales increased 0.6% and jumped 25.3% on a two-year basis.
Nordstrom, Inc after the close reported fiscal first quarter total revenues rose 20% to $3.57 billion and net income of $20 million or 13 cents a share compared to a loss of $166 million or $1.05 a share.
The retailer revised higher earnings per share for the year between $3.38 and $3.68 from the earlier estimate of $3.18 to $3.50.
New Home Sales Drop 16% in April As Buyers Pull Back
Brian Turner
24 May, 2022
New York City
Seasonally adjusted single-family new home sales declined 16% to 591,000 annual rate, according to the estimate released by the U.S. Census Bureau and Department of Housing and Urban Development.
The sales were lower than the 750,000 annual rate that many economists had anticipated.
Home sales in April were the slowest since April 2020 when sales were at an annual pace of 623,000.
Rising cost of new homes and mortgage rates are limiting home buyer's purchases.
30-year fixed mortgage rates have been rising and rates increased from 4.88% to 5.41%, according to the data published by Mortgage News Daily.
Buyers are pulling back from home purchases with the median home price of a home across the U.S. increased 24% from $309,900 in April 2020 to $450,600 in April 2022.
Sales declined 16% from the revised rate of 709,000 in March and fell 26.9% from the estimate of 809,000.
The median home price in April was $450,600 and average sale price was $570,300.
The seasonally?adjusted estimate of new houses for sale at the end of April was 444,000 representing a supply of 9.0 months at the current sales rate.
Home builders are also witnessing a decline in traffic according to a recent report released by the industry association.
Builder confidence in the market for newly built single-family homes fell eight points to 69 in May, according to the National Association of Home Builders and Wells Fargo Housing Market Index released on May 17.
Builder sentiment declined for the fifth month in a row and the lowest reading since June 2020.
AutoZone Domestic Same Store Sales Rise 2.6%
Scott Peters
24 May, 2022
New York City
AutoZone, Inc, the auto parts retailer, said net sales in the fiscal year third quarter ending on May 7 rose 5.9% to $3.9 billion and comparable domestic store sales increased 2.6%.
Despite the colder than normal weather and late arrival of spring and tough comparison to the previous quarter sales driven by stimulus, the retailer reported positive comparable sales.
Net income edged down to $592.5 million or $29.93 a share from $596.2 million or $27.15 a share.
For the nine-month period ending in the third-quarter, same store sales increased 9.5% compared to 19.0% in the period a year ago.
In the quarter, total sales across all stores in the U.S., Mexico, and Brazil rose to $556,000 from $541,000 a year ago and sales per square foot increased to $83 from $81.
At the end of the quarter, Inventories increased 13.9% from a year ago primarily driven by inflation and the remaining driven by higher store counts and distribution centers.
Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $216,000 versus negative $167,000 last year and negative $198,000 last quarter.
AutoZone repurchased 449,000 shares of its common stock for $900 million during the fiscal third quarter, at an average price of $2,006 per share.
At the end of the fiscal third quarter, the company had $2.06 billion remaining under its current share repurchase authorization.
Weighted shares outstanding at the end of the quarter declined to 20.4 million from 22.5 million a year ago.
Stockholders' deficit increased to $3.4 billion at the end of the quarter from $1.8 billion a year ago.
Guidance and Outlook
During the earnings call, the company indicated comparable same stores sales are reaccelerating in the current quarter.
The company did not provide any quarterly or annual sales or earnings or business metrics guidance.
Company and Stock
AutoZone, Inc, the auto parts retailer, operates 6,115 stores in the U.S., 673 stores in Mexico, and 58 stores in Brazil with a total retail space of 44.7 million square foot.
The average store size edged up to 6,673 square foot.
The retailer added 24 new stores in the U.S., 4 in Mexico, and 3 in Brazil.
AutoZone stock rose 2.8% to 1,858.55 after the auto parts retailer reported earnings.
For the year so far, AutoZone stock has declined 9% to $1,861.68.
Abercrombie & Fitch Reports Quarterly Loss On Higher Freight and Raw Materials Costs
Scott Peters
24 May, 2022
New York City
Abercrombie & Fitch reported net sales in the first quarter ending on April 30 rose 4% to $812.7 million and gross margin fell to 55.3% from 63.4% a year ago when sales were $781.4 million.
The retailer reported an unexpected quarterly loss of $16.5 million or 32 cents from profit of $41.7 million or 67 cents a share.
Gross profit margin rate declined 810 basis points after freight cost increased $80 million partially offset by higher unit average cost on lower promotions.
Hollister branded goods declined 3% to $428.8 million and Abercrombie & Fitch branded goods rose 13% to $383.9 million.
Store sales in the U.S. rose 6%, Europe and the Middle East area rose 3% but in the Asia Pacific region plunged 35%.
Total international sales were flat in the quarter compared to a year ago at $227 million and the U.S. sales rose 6% to $585 million.
Inventories at the end of the quarter soared 45% to $563 million due to increased in-transit inventory, higher units on hand, and increased average unit costs driven by freight compared to a year ago.
In the quarter the company repurchased $100 million or 3.3 million of its shares and $258 million remaining in the repurchase program established in November 2021.
Guidance and Outlook
The retailer guided second quarter revenues to be down in low-single digits and for the full-year to be flat to up 2% from a year ago.
The retailer also guided operating margin for the year to fall between 5% and 6% from the previous estimate between 7% and 8% on the account of higher freight and raw materials cost and lower sales due to an assumed inflationary impact on consumers.
The operating margin in the second quarter is expected to fall between 3% and 4% on higher raw materials and freight costs and net sales to decline in low single-digits from a year ago.
Company and Stock
Abercrombie & Fitch is a specialty apparel retailer for men, women, and kids and operates 730 stores under five brands.
Abercrombie & Fitch fell 26.2% to $19.96 after the apparel retailer reported earnings.
In the year so far, Abercrombie & Fitch stock has declined 46.91% to $18.57.
European Indexes Drop After ECB Comments
Barry Adams
24 May, 2022
New York City
Market indexes in Europe traded lower after the European Central Bank president raised the prospects of a rate hike at the next policy meeting in June.
The DAX index declined 1.5% to 13,956.31, the CAC-40 index fell 1.5% to 6,263.08, and the FTSE 100 index decreased 0.4% to 7,485.09.
The eurozone economies are facing supply shocks driven by higher oil and natural gas prices and global supply chain disruptions.
The producer and consumer prices are rising at 4-decade high rates across the currency block.
Last week, Germany reported producer price increase of 33% in April, a record high in decades.
"The next step in rate normalisation will involve following through with our forward guidance on ending net asset purchases and on rate lift-off.
If we see inflation stabilising at 2% over the medium term, a progressive further normalisation of interest rates towards the neutral rate will be appropriate.
But the speed of policy adjustment, and its end point, will depend on how the shocks develop and how the medium-term inflation outlook evolves as we move forward," Lagarde highlighted in a post on the ECB website.
Tele2 AB dropped 8.2% to 115 Swedish krona after Kinnevik sold a 7.2% stake in the telecom operator.
Adevinta ASA gained 2% after the classified advertising company reported first quarter sales rose 5% to 387 million euros and swung to profit of 72 million euros or 6 cents a share compared to 38 million euros or 6 cents loss a year ago.
The company reaffirmed its long term revenues increase of 15% and EBITDA margin between 40% and 45%.
In the second quarter, the company estimated revenues to increase in low double-digits in core markets and operating income between 575 million and 600 million euros excluding discontinued operations.
Barclays PLC rose 3.6% to 163.46 pence after the bank launched a one billion pound stock buyback program.
Renewi PLC jumped 6% after the waste recycling company reported full-year revenues rose 10% and core earnings rose 83%.
The British pound declined against the euro and the U.S. dollar after the Purchasing Managers' index showed a severe slowdown in economic activities in May compared to robust activities in the eurozone.
The Chartered Institute of Procurement & Supply composite output index dropped sharply to 51.8 in May from 58.2 in April, lower than expected reading of 56.5.
The euro area private sector index declined to 54.9 in May from 55.8 in April, a smaller than expected decline.
The private sector expanded on a strength in service activities driven by household demand.
In Asian markets, China focused indexes failed after the latest stimulus measures failed short of expectations by a wide margin.
The Shanghai Composite index declined 2.4% to 3,070.93 and the Hang Seng Index fell 1.4% to 20,112.35.
In Tokyo, the Nikkei 225 index declined 0.9% to 26,748.11 and the latest private survey showed manufacturing activities growth declined slightly in May from April.
Movers: Abercrombie, Advance Auto, AutoZone, Best Buy, Petco, Snap, Zoom Video
Barry Adams
24 May, 2022
New York City
Abercrombie & Fitch fell 26.2% to $19.96 after the apparel retailer reported net sales in the first quarter ending on April 30 rose 4% to $812.7 million and gross margin fell from 55.3% from 63.4% a year ago when sales were $781.4 million.
The retailer reported an unexpected quarterly loss of $16.5 million or 32 cents from profit of $41.7 million or 67 cents a share.
The retailer guided second quarter revenues to be down in low-single digits and for the full-year to be flat to up 2% from a year ago.
Advance Auto Parts, Inc declined 3.7% to $176.50 after the auto parts retailer reported sales in the first quarter ending on April 23 declined 1.3% to $3.4 billion and comparable same store sales increased 0.6%.
Net earnings in the quarter fell 26% to $139.7 million or $2.26 a share from $185.9 million or $2.81 a share.
AutoZone, Inc rose 2.8% to 1,858.55 after the auto parts retailer said net sales in the fiscal year third quarter ending on May 7 rose 5.9% to $3.9 billion and comparable domestic store sales increased 2.6%.
Net income edged down to $592.5 million or $29.93 a share from $596.2 million or $27.15 a share.
Best Buy Co Inc jumped 3.6% to $75.22 after the electronics retailer reported net sales in the fiscal 2023 first quarter ending on April 30 declined 8.6% to $10.6 billion and comparable same store sales fell 8.5% after rising 37.9% in the quarter a year ago.
Net earnings declined to $341 million or $1.49 a share from $595 million or $2.35 a share.
The company lowered fiscal 2023 sales outlook between $48.3 billion and $49.9 million from the previous estimate between $49.3 billion and $50.8 billion.
Comparable sales are now expected to decline between 3% and 6% from the previous estimate of declined between 1% and 4%.
Insulet Corporation jumped 6% to $214.87 after the company was said to be in merger talks with the glucose monitoring systems maker Dexcom.
Dexcom, Inc declined 10.2% to $290.82.
The merger talks were first reported by Bloomberg News.
Petco Health & Wellness Company 2.3% to $14.46 after the company said net sales in the first quarter ending in April rose 4.3% to $1.48 billion and comparable same store sales rose 5.1%.
Operating income in the quarter rose to $49.9 million from $47.7 a year ago.
The retailer reaffirmed its previous estimate of full-year sales between $6.15 billion and $6.25 billion and capital expenditure between $275 million and $325 million.
Snap Inc plunged 39% to $13.65 after the operator of an online chat platform warned that the current quarter sales are running lower than expected.
The company said in a regulatory filing that it is battling on several fronts including changes in Apple's privacy policy, inflation, wage pressures, falling advertising rates.
After the warning, Meta Platform dropped 9%, Twitter fell 2%, Google declined 6%, and Pinterest fell more than 21%.
Zoom Video Communications Inc rose 1.6% to $90.65 after the company reported quarterly revenues rose 12% but net income was cut in half.
Revenues in the Americas rose 15% and enterprise revenues jumped 31% to represent 52% of total revenues.
S&P 500 and Nasdaq Snap Back in Negative Territory
Barry Adams
24 May, 2022
New York City
U.S. stock futures point to lower opening after a day of market rebound led by financial stocks.
Futures on the S&P 500 index decreased 1.1% to 3,928.50 and the Nasdaq Composite fell 1.7% to 11,832.50.
Tech stocks drove market indexes lower again after the popular online chat platform operator Snap Inc warned that advertising revenues are running lower than expected in the current quarter.
The company is also planning to slow down new hires.
In pre-market trading, Snap Inc declined 28% and dragged down other tech companies relying on advertising revenues.
Google, Meta Platforms, and Netflix fell more than 3%.
Zoom Video jumped 3% but traded as high as 13% in yesterday's after-market trading after the company released earnings.
The online communication company said quarterly net plunged 50% but the company improved annual revenues outlook as enterprise clients adjust to hybrid work environments and employees return to office after a prolonged Covid-19 hiatus.
Abercrombie & Fitch plunged more than 30% after the retailer reported quarterly loss on higher cost of goods sold and inventory challenges.
In Europe, market indexes traded lower after the ECB President Christine Lagarde raised the possibility of a rate hike at the next policy meeting in June.
The DAX index declined 0.7% to 14,072.51, the CAC-40 index fell 0.8% to 6,306.68, and the FTSE 100 index decreased 0.03% to 7,511.79.
In Asian markets, China focused indexes failed after the latest stimulus measures failed short of expectations by a wide margin.
The Shanghai Composite index declined 2.4% to 3,070.93 and the Hang Seng Index fell 1.4% to 20,112.35.
In Tokyo, the Nikkei 225 index declined 0.9% to 26,748.11 and the latest private survey showed manufacturing activities growth declined slightly in May from April.