Market Update
April Job Openings Ease from Record March 11.9 Million
Brian Turner
01 Jun, 2022
New York City
Job openings eased in April but still remained above 11 million indicating tight labor market conditions.
The openings declined 445,000 in April from an upwardly revised record 11.855 million in March.
New hires in the month were little unchanged at 6.6 million and separations including quits and layoffs were also nearly unchanged at 6.0 million, the Bureau of Labor Statistics reported in the Job Openings and Labor Turnover Survey.
The JOLT survey, based on 20,700 companies of the nearly 9.4 million establishments, showed job openings declined but were still strong at 11.4 million.
The largest increases were in transportation, warehousing, and utilities with 97,000 job openings followed by nondurable goods manufacturing with 67,000; and durable goods manufacturing with 53,000.
The largest decreases in job openings were in health care and social assistance with 266,000, retail trade with 162,000, and accommodation and food services with 113,000.
Total job openings rate declined to 7.0% in April from 7.3% in March.
Large number of hires and separations occur in the U.S. economy indicating its dynamism.
Hires totaled 78.0 million and separations totaled 71.6 million, yielding a net employment gain of 6.4 million, in 12 months to April.
These totals include workers who may have been hired and separated more than once during the year.
Movers: Chewy, Delta Air, Levi Strauss, HP, Salesforce, Sportsman's Warehouse
Barry Adams
01 Jun, 2022
New York City
Chewy Inc declined 6.05% to $23.30 ahead of the online pet food retailer's first quarter earnings after the market-close today.
The analysts are expecting the company to report first quarter 2022 revenues of at least $2.41 billion and net loss of 10 cents a share, according to a survey conducted by Refinitive.
Sales in fiscal 2021 ending in January jumped 24% to $8.89 billion and net loss of $63.6 billion.
Delta Air Lines dropped 5.4% to $39.45 after the company said in a regulatory filing that it expects to reach revenues this quarter matching the 2019 levels on strong travel demands and higher fares surpassing the higher fuel costs.
The airline revised higher operating margin between 13% and 14% from the previous estimate between 12% and 14%.
The company also estimated $1.5 billion of free cash flow and adjusted net debt below $20 billion.
American Airlines dropped 3.5% and United Airlines declined 4.5% after the Memorial Day weekend saw as many as 7,000 flight cancellations and stranded thousands of passengers in bad weather.
Levi Strauss jumped 0.7% to $18.29 after the company unveiled its five-year plan to accelerate sales and triple its e-commerce sales in the period and set the target of 2027 revenues between $9 billion and $10 billion reflecting 6% to 8% of organic annual growth.
The Board of Directors also authorized repurchase of $700 million of its stock.
HP Inc rose 2.8% to $39.92 after the computer and peripheral maker said second quarter sales increased 3.9% to $16.5 billion and net income declined 19% to $1.0 billion.
During the quarter, free cash flow declined 74% to $400 million.
The company estimated for the fiscal third quarter 2022 diluted earnings per share between 91 cents and 96 cents and for the full-year between $3.79 and $3.93.
Salesforce Inc jumped 9.3% to $175.41 after the company reported April quarter revenues rose 24% to $7.41 billion and net income dropped 94% to $98 million.
The company lifted its fiscal 2023 adjusted earnings outlook between $4.74 and $4.76 a share from the previous estimate between $4.62 and $4.64.
Sportsman's Warehouse Holdings dropped 7.8% to $8.73 after the retailer said sales in the first quarter ending in April declined 3.5% to $309.5 million.
Same store sales fell 11.5% on lower demand and customers retrenched on rising inflation and food prices and ending of the stimulus payments.
Net income declined to $2 million of 5 cents a share compared to $10.5 million or 23 cents a year ago.
In the second quarter, the retailer anticipates same store sales to fall between 10% and 16% and total sales between $330 million and $350 million and adjusted earnings between 22 cents and 30 cents a share.
Stocks Drop After JOBS Report and Dimon Hurricane Comments
Barry Adams
01 Jun, 2022
New York City
U.S. stocks struggled after the latest employment survey showed a sharp decline in available jobs.
The S&P 500 index declined 0.6% to 4,105.29 and the Nasdaq Composite fell 0.2% to 12,055.70.
The yield on 10-year Treasury notes increased to 2.93%.
The futures of crude oil jumped 2% to $116.15 a barrel and natural gas jumped 5% to $8.53 a mBTU unit.
In volatile trading, market indexes opened higher and quickly dropped below the flatline after the the Bureau of Labor Statistics released the JOLTS or Job Openings and Labor Turnover Survey.
The job openings declined 445,000 from an upwardly revised 11.855 million in March.
The gap between the number of people searching for jobs and available jobs shrank to 5.46 million in April from 5.6 million in March.
Job openings as a share of the labor force declined to 7%.
Recent comments from JPMorgan Chairman Jamie Dimon also weighed on the market.
The economy is "headed for a hurricane" and "you better brace yourself" and no one knows if the hurricane is
U.S. Indexes Extend May Losses
Barry Adams
31 May, 2022
New York City
U.S. stocks closed down after lackluster trading and inflation and oil prices weighed on the market sentiment.
The S&P 500 index declined 0.6% to 4132.12 and the Nasdaq Composite index edged down 0.54% to 12,081.39.
In May, the S&P 500 index fell 0.5% and the Nasdaq Composite index dropped 3.6% after a month of wild trading.
Home prices continued to advance in March despite the rising mortgage rates.
The controversial S&P CoreLogic Case Shiller U.S. National Home Price NSA index showed 3-month average prices to March increased 20.6% after rising at 20% in February.
The price index in 20 metropolitan cities surged 21.2% from 20.3% in February and in 10-city composite increased 19.5% from 18.7% in the previous month.
Tampa, Phoenix, and Miami reported the largest annual gains among the 20 cities in March.
Tampa led the list with 34.8% annual price increase, followed by Phoenix with a 32.4% increase, and Miami with a 32.0% increase.
Inflation worries resurfaced after crude oil extended gains and reached a new 8-yeare high.
Energy prices advanced after China eased restrictions in Beijing and Shanghai and activities are expected to pick up across large cities.
Moreover, European Union leaders except Hungary, agreed to ban most oil products from Russia by the year's end.
Futures of crude oil jumped as much as 4% in early trading but closed up 34 cents to $115.44 a barrel and natural gas declined 51 cents or 5.1% to $8.22 a unit.
The yield on 10-year Treasury notes increased a fraction to 2.855%.
Euro zone consumer price index jumped to more than expected 8.1% and France and Austria also reported record high inflation not seen in the last several decades.
The latest data from the Eurostat, the statistics office in the currency union, showed consumer prices harmonized in May rose 8.1% after rising at 7.4% in April, seventh monthly record increase in a row.
May Inflation in France jumped to 5.8% from 5.4% in April and in Germany surged to 8.7% from 7.8% in April.
Harmonized inflation in Italy rose 7.3% in May from 6.3% in April.
The main driver of inflation in the region is the 39.2% surge in crude oil prices in May after rising 37.5% in April.
The DAX index declined 1.3% to 14,388.35, the CAC 40 index dropped 1.4% to 6,468.30, and the FTSE 100 index rose 0.1% to 7,607.66.
Chinese stocks trading in New York jumped after residents are allowed to visit malls, public places, and parks from June 1.
Workers are also scheduled to return to office after the easing of the Covid restrictions from next month.
Alibaba Group Holding Ltd jumped 3.4% to $96.62, JD.com jumped 52% to $56.51, Baidu Inc jumped 3.1% to $143.38, and Nio Inc jumped 5% to $17.41.
Healthcare stocks led the decliners. UnitedHealth declined 2% to $496.93, Walgreens Boots Alliance jumped 0.6% to $43.99, Cigna Group declined 0.7% to $270.19, and HCA Healthcare fell 2.01% to $211.06.
Cracker Barrel declined 3% to $101.99 and extended loss in the year so far to 22.5% ahead of the release of its earnings on June 6.
Movers: Alibaba, American Eagle, Cracker Barrel, Kirkland's, Nio, PVH
Barry Adams
31 May, 2022
New York City
Chinese stocks trading in New York jumped after residents are allowed to visit malls, public places, and parks from June 1.
Workers are also scheduled to return to office after the easing of the Covid restrictions from next month.
Alibaba Group Holding Ltd jumped 3.4% to $96.62, JD.com jumped 52% to $56.51, Baidu Inc jumped 3.1% to $143.38, and Nio Inc jumped 5% to $17.41.
Healthcare stocks led the decliners.
UnitedHealth declined 2% to $496.93, Walgreens Boots Alliance jumped 0.6% to $43.99, Cigna Group declined 0.7% to $270.19, and HCA Healthcare fell 2.01% to $211.06.
Cracker Barrel declined 3% to $101.99 and extended loss in the year so far to 22.5% ahead of the release of its earnings on June 6th.
American Eagle Outfitters declined 7.5% to $12.11 after Morgan Stanley downgraded the stock "underweight" and added the rating could sink further citing margin pressures and inventory challenges.
PVH Corp gained 0.1% to $70.87 ahead of its first quarter 2022 earnings release on June 2.
The Calvin Klein and Tommy Hilfiger apparel maker reported $1.92 a share in the first quarter 2021 beating the consensus estimate of 93 cents.
Kirkland's declined 14.7% to $5.79 after the retailer of home decor, furnishing and gifts reported first quarter 2022 net sales declined 18% to $103 million on 15.8% fall in comparable sales from a year ago.
In the quarter, the retailer swung to a loss of $7.9 million or 63 cents a share from profit of $1.7 million or 11 cents a share.
The retailer shifting consumer priorities on rising inflation and energy prices and supply chain disruptions and elevated freight rates also impacted quarterly results.
Kirkland's stock has declined 63% in the year-so-far.
Tampa, Phoenix, and Miami Lead Home Price Increase in March
Brian Turner
31 May, 2022
New York City
Home prices continued to advance in March despite the rising mortgage rates.
The controversial S&P CoreLogic Case Shiller U.S. National Home Price NSA index showed 3-month average prices to March increased 20.6% after rising at 20% in February.
The price index in 20 metropolitan cities surged 21.2% from 20.3% in February and in 10-city composite increased 19.5% from 18.7% in the previous month.
Tampa, Phoenix, and Miami reported the largest annual gains among the 20 cities in March.
Tampa led the list with 34.8% annual price increase, followed by Phoenix with a 32.4% increase, and Miami with a 32.0% increase.
Seventeen of the 20 cities reported higher price increases in the year ending March 2022 versus the year ending February 2022.
"Those of us who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer," says Craig J. Lazzara, Managing Director at S&P DJI.
On a monthly basis and before adjusted for seasonal factors, home prices rose 2.6% across the nation, jumped 2.8% and 3.1% across 10 and 20 city composites.
After leading the national price increase for nearly three years, Phoenix was replaced by Tampa for the first time.
Home price index in Tampa soared 248% in March followed by 32.4% in Phoenix and 32% in Miami.
Average mortgage rate across the country was reported at 3.29% in January and jumped to 4.67% in March according to the data reported by Mortgage News Daily.
Mortgage rates have continued to rise since then and peaked 5.57% in May.
New and existing home sales have been falling for more than three months and home supplies available for sales are increasing as more homeowners are listing properties before the hot market cools.
U.S. Stocks Turn Lower After Oil Jumps 3%
Barry Adams
31 May, 2022
New York City
U.S. stocks turned lower after crude oil prices extended gains and eurozone inflation touched multi-decade higher.
The S&P 500 index declined 1.1% to 4,114.08 and the Nasdaq Composite index fell 1.2% to 11,984.17.
Crude oil futures in New York gained 3.5% to $119.10 a barrel after the European Union imposed a partial ban on the import of Russian crude oil and energy products.
Euro zone consumer price index jumped to more than expected 8.1% and France and Austria also reported record high inflation not seen in the last several decades.
The latest data from the Eurostat, the statistics office in the currency union, showed consumer prices harmonized in May rose 8.1% after rising at 7.4% in April, seventh monthly record increase in a row.
May Inflation in France jumped to 5.8% from 5.4% in April and in Germany surged to 8.7% from 7.8% in April.
Harmonized inflation in Italy rose 7.3% in May from 6.3% in April.
The main driver of inflation in the region is the 39.2% surge in crude oil prices in May after rising 37.5% in April.
In today's trading crude oil prices increased 1.5% to $119.81 in London, U.K. trading after the European Union leaders proposed to partially ban Russian oil imports.
The popular indexes in New York reversed course after a week of rise that lifted the S&P 500 index 6.5% and the Nasdaq Composite index 6.8%.
The indexes were also under the pressure after the oil prices reached a new 8-year high and investors recalibrated economic slow down prospects.
Crude oil prices also gained after China eased restrictions on return to office work and social gathering in Beijing and Shanghai.
Investors are also looking ahead to earnings from more than 150 companies this week including results from Salesforce.com, Victoria's Secret, HP, Chewy, Lululemon Athletica, and Veeva Systems.
Perception of Cooling Inflation Powered 2% Stock Rally
Barry Adams
27 May, 2022
New York City
U.S. stocks extended advance after the latest inflation measure indicated a downward trend and the falling yield boosted sentiment in the stock market.
The S&P 500 index jumped 2.4% to 4,158.30 and the Nasdaq Composite index advanced 3.3% to 12,131.13.
After eight weeks of selling investors were ready to embrace any news that offered a glimmer of hope.
Household consumption increased for the fourth month in a row in April but disposable income after adjusting for inflation was nearly flat indicating consumers are dipping in savings and wages are not rising at the rate of inflation.
The data released by the Commerce Department also indicated that the Personal Consumption Expenditures or PCE price index, the Fed's preferred measure of inflation, slowed to 6.3% in April after rising at 6.6% in March.
On a monthly basis, the PCE rose 0.2% in April after rising at 0.9% in March.
However, the core PCE which excludes volatile food and energy prices decelerated to 4.9% in April after rising at 5.2% in March.
The PCE is different from the Consumer Price Index and takes into account a change in consumer behavior when prices rise and consumers substitute for cheaper alternatives.
A slight decline in the inflation measure and better than expected results from tech and retail companies was enough to bolster market sentiment.
Ulta Beauty jumped 11% to $419.75 and erased losses in the year after the cosmetic retailer reported better than expected earnings and lifted earnings and revenues outlook for the year.
However, Big Lots, Burlington Stores, Gap Inc, and Hibbett Inc struggled in the quarter as consumers retrenched.
Retailers are battling shifting demand trends where consumers are ready to substitute lower priced groceries in search of discounts but at the same time are ready to splurge for high end items or experiences.
Bloomingdale's owned by Macy's reported quarterly same store sales increased 28% but Burlington Northern and Big Lots sales plunged more than 10%.
Tech-heavy Nasdaq soared nearly 3% after the software developer Autodesk Inc, computer and systems maker Dell Technologies, chip maker Marvell Technology, and cyber security provider Crowdstrike Holdings reported better than expected quarterly results.
But it was the decline in yield in the bond market that supported a rally in tech and high-growth stocks where profits are in the distant future if any.
The yield on 10-year Treasury notes declined to 2.74% after rising as much as 3.25% last week.
The stocks rally was sustained and gathered steam in the late afternoon as investors raced to add exposure to battered tech stocks ahead of a 3-day weekend.
For the year, the Nasdaq Composite index is still down 24% and the S&P 500 lower 13%.
Futures of crude oil jumped 1% to $115.09 a barrel but natural gas declined 2% to $8.74 a unit.
Unleaded gasoline price at pumps across the nation is still near record high of $4.59 a gallon, a 40% increase from $3.04 a year ago according to the data released by AAA.
The automobile association expects 39.2 million people to travel more than 50 miles this weekend, an increase of 8.3% from a year ago but down 7.2% from 2019.
The gasoline prices are not likely to ease at least till July as futures of gasoline trade near record high prices.
Burlington Stores Battles Demand Shift, Inventory Challenges, Inflation
Scott Peters
27 May, 2022
New York City
Burlington Stores Inc earnings plunged after rising product and freight costs added to inventory woes as demand patterns shifted in the quarter.
The retailer said total sales in the quarter ending on April 30 declined 12% to $1.9 billion on a comparable store sales fall of 18%.
Net income in the quarter was $16 million or $0.24 per share compared to $171 million or $2.51 per share a year ago.
Gross margin in the quarter declined to 41% from 43.3% a year ago after freight costs rose 150 basis points and merchandise margin decreased 80 basis points.
Product sourcing costs which include the cost of processing goods through supply chain and buying costs increased to $157 million from $141 million a year ago.
Net income in the quarter plunged to $16 million, or $0.24 per share from $171 million or $2.51 per share a year ago.
Comparable quarter sales patterns changed as more people returned to work and demanded different goods than were available at stores.
The demand shift was evident in the monthly sales trend. Comparable sales on a 3-year basis declined 6% in February, fell 2% in March and increased 5% in April when computed on a geometric basis.
However, the consumer demand is still weak for the company's merchandise as discount shoppers struggle with higher fuel costs and tight budgets.
Guidance and Outlook
The retailer guided second quarter comparable store sales to decline between 13% and 15% and for the full-year fall between 6% and 9%.
The retailer is still planning to open new 120 stores and relocate or close 30 stores and add net 90 new stores in fiscal 2022.
Company and Stock
Burlington Stores Inc fell 0.7% to $168.55 after the retailer reported quarterly results.
Burlington Stores in the year-so-far has declined 42.1%.
Ulta Beauty Benefits from Return to Work, Events and Glam Trends
Scott Peters
27 May, 2022
New York City
Ulta Beauty benefitted as women return to work and increase participation in events and group activities as most Covid-restrictions end.
The cosmetic retailer and beauty salon operator said net sales in the first quarter 2022 ended April 30 increased 21.0% to $2.3 billion.
Comparable sales at stores open at least 14 months and e-commerce sales increased 18.0%, driven by a 10.0% increase in transactions and a 7.3% increase in average ticket.
Gross margin in the quarter edged up to 40.1% from 38.9% and operating margin rose to 18.7% from 15.8% a year ago.
Merchandise inventories rose 14% to $1.57 billion and the increase was primarily driven by additional 28 stores and launch of new brands.
Net income in the quarter increased to $331.4 million or $6.30 per share from $230.3 million or $4.10 a year ago.
During the first quarter of fiscal 2022 the company spent $132.8 million in repurchasing 331,834 of its stock.
The company said $1.87 billion of the $2.0 billion share repurchase program was still available at the end of the quarter.
Guidance and Outlook
The company revised its fiscal 2022 revenue outlook to range between $9.35 billion and $9.55 billion from the previous estimate of $9.05 billion and $9.15 billion.
Comparable sales growth rate was revised higher between 6% and 8% from the previous estimate of 3% and 4%.
For fiscal 2022 the company revised higher its estimate of diluted earnings per share to range between $19.10 to $20.10 from the previous estimate of $18.20 to $18.70.
The company reiterated its plan to open 50 net new stores and remodel 35 stores in the current year.
Company and Stock
Ulta Beauty operated 1,318 stores totaling 13.9 million square feet at the end of April 2022.
Ulta Beauty Inc soared 11.2% to $420.49 after the cosmetic retailer and beauty salon operated quarterly results.
Ulta Beauty stock in the year-so-far has gained 0.7%.
Old Navy Challenges at Gap Overshadowed Banana Republic Strength
Scott Peters
27 May, 2022
New York City
Gap Inc, the specialty apparel retailer sales suffered after consumers retrenched and supply chain challenges added to higher costs.
Merchandise problems at Old Navy also impacted results negatively.
The retailer said net sales in the quarter ended April 30 declined 13% to $3.5 billion and comparable sales declined 14%.
Online sales fell 17% from a year ago and were 39% of total net sales.
The company said 5 percentage points in sales decline were driven by the lapping of the benefit of stimulus last year and approximately 3 percentage points from divestitures, store closures, and the transition of the company
Movers: American Eagle, Big Lots, Burlington Stores, Dell, Gap, Hibbett, Ulta
Barry Adams
27 May, 2022
New York City
American Eagle Outfitters dropped 9.4% to $14.00 after the retailer missed quarterly expectations.
Total net revenues increased 2% to $1.055 billion and net income plunged to $31.7 million from $95 million a year ago.
Gross margin declined to 36.8% from 42.2% a year ago and diluted earnings per share fell to 16 cents from 47 cents a year ago.
Total inventory at the end of the quarter at cost increased 46% to $682 million compared to $467 million last year.
Higher costs drove roughly half of the increase and the company also ordered more inventories to avoid supply chain issues.
The retailer guided second quarter revenues growth will match the first quarter rate and gross margin rate of 33% reflecting higher markdown to clear spring inventory.
Big Lots declined 15.8% to $25.80 after the discount retailer reported weaker than expected quarterly results and issued cautious outlook for the year.
Net sales declined 15.4% to $1.37 billion after comparable sales fell 17% from a year ago and reported 39 cents a share loss compared to $2.68 a year ago.
Burlington Stores Inc rose 1.1% to $171.99 after the retailer said total sales in the quarter ending on April 30 declined 12% to $1.9 billion on a comparable store sales fall of 18%.
Net income in the quarter was $16 million or $0.24 per share compared to $171 million or $2.51 per share a year ago.
The retailer guided second quarter comparable store sales to decline between 13% and 15% and for the full-year fall between 6% and 9%.
Costco Wholesale decreased 1.3% to $465.00 after the retailer said U.S. comparable sales in the first quarter rose 10.7% excluding fuel sales and reported first quarterly revenues in excess of $50 billion. Membership revenues surged 9% approaching $1 billion.
Dell Technologies rose 13% to $49.50 after the computer and systems maker reported net sales in fiscal 2023 first quarter ended April 29 increased 16% to $26.1 billion and diluted earnings per share increased 63% to $1.37.
Net income in the quarter surged 62% to $1.07 billion.
Gap Inc fell 5.6% to $10.46 after the specialty apparel retailer said net sales in the quarter ended April 30 declined 13% to $3.5 billion and comparable sales declined 14%.
Gross margin plunged 930 basis points from a year ago to 31.5%.
The retailer revised and lowered its fiscal year outlook and now expects fiscal 2022 revenue to decline in the low to mid-single digit range versus last year.
Hibbett Inc plunged 6.7% to $51.10 after the sporting goods retailer reported April quarter net sales declined 16.3% to $424.1 million on a comparable sales fall of 18.9%.
Net income for the 13-weeks ended April 30, 2022, was $39.3 million, or $2.89 per diluted share, compared to $84.8 million, or $5.00 per diluted share a year ago.
Ulta Beauty Inc soared 11.2% to $420.49 after the cosmetic retailer and beauty salon said net sales in the first quarter 2022 ended April 30 increased 21.0% to $2.3 billion.
Comparable sales at stores open at least 14 months and e-commerce sales increased 18.0%, driven by a 10.0% increase in transactions and a 7.3% increase in average ticket.
Net income in the quarter increased to $331.4 million or $6.30 per share from $230.3 million or $4.10 a year ago.
The company revised its fiscal 2022 revenue outlook to range between $9.35 billion and $9.55 billion from the previous estimate of $9.05 billion and $9.15 billion.
Comparable sales growth rate was revised higher between 6% and 8% from the previous estimate of 3% and 4%.
Household Spending In April Rises, Wage Gains Lag Inflation
Brian Turner
27 May, 2022
New York City
The latest measure of personal consumption and income in April showed that the inflation may be cooling off.
Personal income in April increased 0.4% or $89.3 billion in April, according to estimates released today by the Bureau of Economic Analysis.
Disposable personal income increased 0.3% or $48.3 billion and personal consumption expenditures increased 0.9% or $152.3 billion.
PCE in current dollars increased 1.4% in March.
Household consumption increased for the fourth month in a row but disposable income after adjusting for inflation was nearly flat indicating consumers are dipping in savings.
Real DPI increased less than 0.1% in April and Real PCE increased 0.7%; goods increased 1.0% and services increased 0.5 percent.
The PCE price index increased 0.2% and excluding food and energy, the PCE price index increased 0.3%.
From a year ago, the PCE price index, the preferred measure of inflation, slowed to a 6.3% increase after rising at 6.6% in March.
The PCE index excluding food and energy rose 4.9% in April after rising at 5.2% in March.
U.S. Indexes Advance After April Household Spending Increased
Barry Adams
27 May, 2022
New York City
U.S. stocks showed signs of another positive day following a sharp rebound yesterday.
Futures on the S&P 500 index gained 0.73% to 4,073.03 and the Nasdaq Composite index advanced 1.1% to 12,414.25.
Stocks advanced in the morning after the latest measure of personal consumption and income in April showed that the inflation may be cooling off.
Personal income in April increased 0.4% or $89.3 billion in April, according to estimates released today by the Bureau of Economic Analysis.
Disposable personal income increased 0.3% or $48.3 billion and personal consumption expenditures increased 0.9% or $152.3 billion.
PCE in current dollars increased 1.4% in March.
Real DPI increased less than 0.1% in April and Real PCE increased 0.7%; goods increased 1.0% and services increased 0.5 percent.
The PCE price index increased 0.2% and excluding food and energy, the PCE price index increased 0.3%.
From a year ago, the PCE price index, the preferred measure of inflation, slowed to a 6.3% increase after rising at 6.6% in March.
The PCE index excluding food and energy rose 4.9% in April after rising at 5.2% in March.
Retail stocks were in focus again in trading.
Big Lots declined 15.8% to $25.80 after the discount retailer reported weaker than expected quarterly results and issued cautious outlook for the year.
Net sales declined 15.4% to $1.37 billion after comparable sales fell 17% from a year ago and reported 39 cents a share loss compared to $2.68 a year ago.
Hibbett Inc declined 6.7% to $51.10 after the sporting goods retailer reported April quarter net sales declined 16.3% to $424.1 million on a comparable sales fall of 18.9%.
Net income for the 13-weeks ended April 30, 2022, was $39.3 million, or $2.89 per diluted share, compared to $84.8 million, or $5.00 per diluted share a year ago.
Costco Wholesale declined 1.3% to $465.00 after the retailer said U.S. comparable sales in the first quarter rose 10.7% excluding fuel sales and reported first quarterly revenues in excess of $50 billion. Membership revenues surged 9% approaching $1 billion.
American Eagle Outfitters declined 9.4% to $14.00 after the retailer missed quarterly expectations.
The yield on 10-year Treasury note edged lower after the release of personal consumption and income data to 2.729%.
Futures of crude oil edged down to $113.83 a barrel and natural gas decreased 5.1% to $8.45 per unit.
Costco Quarterly Revenues Exceed $50 Billion, Membership Revenues Approach $1 Billion
Scott Peters
26 May, 2022
New York City
Costco Wholesale Corporation quarterly sales jumped as more consumers signed up looking for cheaper gasoline and consumables.
The membership warehouse club reported fiscal third quarter sales ending on May 8 increased 16.3% to $51.61 billion and net income jumped 10% to $1.353 billion.
Diluted earnings per share in the quarter increased to $3.04 from $2.75 a year ago.
Higher food prices and gasoline prices lifted new member sign up and drove membership revenues higher 9% to $984 million.
Gross margin in the quarter fell to 10.3% from 11.1% in the previous year's quarter.
Net income margin fell to 2.47% from 2.7% a year ago.
Comparable sales in the U.S. rose 16.6%, in Canada gained 15.2%, and at other international locations increased 5.7%.
Across the company comparable sales rose 14.9%.
Comparable sales excluding fuel and adjusting for foreign exchange in the U.S. rose 10.7%, in Canada gained 12.8%, and other international locations jumped 9.1%.
Across the company comparable sales excluding fuel and adjusted for foreign exchange increased 10.8%.
E-commerce sales jumped 7.4% and excluding fuel and foreign exchange advanced 7.9%.
Battered by high food and fuel prices consumers have been looking for cheaper alternatives and restricting purchases to basic items.
In the fiscal second quarter ending on Feb 13, the retailer reported comparable U.S. same store sales excluding gasoline increased 15.8% from a year ago and slowed to 12.7% in March, and dropped further to 8.1% in April.
Last week competitors BJ's Wholesale Club and Sam's Club owned by Walmart reported strong sales gains and a surge in membership.
Sam's Club, the discount membership warehouse, said sales increased 17.5% to $19.6 billion and comparable sales increased 10.2% from a year ago and jumped 17.4% on a two-year basis.
Gross margin declined to 2.2% due to higher discounting caused by inventory delays and higher supply chain costs.
Sam's Club membership revenues increased 10.5% and number of transactions increased 102%.
Comparable sales growth picked up to 10.2% from 7.2% in the quarter a year ago.
A week ago, BJ's Wholesale Club reported April quarter sales increased 16.2% to $4.5 billion and net income rose 38% to $112.5 million or 87 cents a share.
Net income margin n the quarter was 2.45%.
The company said comparable store sales surged 14.4% and excluding gasoline rose 4.1% from a year ago.
Guidance and Outlook
The company did not provide any formal guidance for revenues, earnings, or other business metrics.
Company and Stock
Costco currently operates 830 warehouses, including 574 in the United States and Puerto Rico, 105 in Canada, 40 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland.
Costco stock in regular trading hours closed up 5.6% to $464.99 before the release of earnings.
In the after-hours trading Costco declined 2% to $455.78.
In the year-so-far, Costco stock has fallen 18%.