Movers: Carvana, GameStop, Nike, PacWest Bancorp

Scott Peters
22 Mar, 2023
New York City

Carvana Co increased 17.9% to $9.34 after the user car retailer announced a debt restructuring plan for some of its $9 billion outstanding debt.  

The embattled retailer proposed to exchange its unsecured notes worth about $5.72 billion for secured notes paying 9.0% cash annual interest.

If the debt exchange is fully subscribed, the unsecured debt may decrease between $1 billion and  $1.2 billion and lower annual interest expenses by as much as $90 million.     

The used car retailer estimated adjusted operating loss in the first quarter to shrink to between $50 million and $100 million from $348 million a year ago. 

The company estimated total vehicle sales in the first quarter ending in the range of 76,000 to 79,000, compared to 105,185 units sold in the year ago. 

Net operating revenues are expected in the range between $2.6 billion and $2.9 billion compared to $3.5 billion in the year ago, driven by lower units sold. 

Non-GAAP gross profit per vehicle is estimated in the range of $4,100 and $4,400 compared to $2,985 in the prior year's quarter. 

Finance receivables are estimated to increase to $1.6 billion at the end of the quarter from $1.3 billion at the end of the previous quarter after the recent market volatility negatively impacted the receivable sales. 

GameStop Corp soared 45.6% to $25.70 after the specialty retailer swung to a profit and posted a surge in gross margin. 

Revenue in the fourth quarter ending on January 28 declined to $2.22 billion from $2.25 billion and the retailer swung to a net income of $48.2 million from a loss of $147.5 million and diluted earnings per share was 16 cents compared to ($0.49) a year ago. 

In the full-year revenue decreased to $5.9 billion from $6.0 billion and net loss shrank to $313.1 million from $381.3 million and diluted loss per share fell to $1.103 from $1.33 a year ago. 

Nike Inc decreased 1.4% to $123.88 after the athletic footwear and apparel maker reported higher revenue and earnings in its latest quarter. 

However, gross margin suffered 330 basis points to 43.3% after the company used markdowns and promotion to liquidate inventories.  

Revenue in the fiscal third quarter ending in February increased 14% to $12.4 billion and net income declined 11% to $1.2 billion from $1.4 billion and diluted earnings per share fell to 79 cents from 87 cents a year ago. 

Nike increased its quarterly dividend to 34.0 cents from 30.5 cents a share or $528 million and repurchased 12.9 million shares for $1.5 billion. 

The company has repurchased 32.0 million shares for $3.4 billion as of the end of February under the stock repurchase program of $18 billion approved in June 2020.

PacWest Bancorp decreased 2.4% to $11.93 and the regional bank in focus said it has "solid liquidity and stabilized deposit balances" in its latest update to investors. 

The Pacific Western Bank's holding company said the bank has a total available cash of $11.4 billion, which exceeds $9.5 billion in uninsured deposits. 

The bank also confirmed deposit withdrawals were $6.8 billion in the current quarter to March 20. 

The bank said it borrowed $3.7 billion from the FHLB, $10.5 billion from the Federal Reserve Discount Window, and $2.1 billion in Bank Term Funding Program,

The bank said it will pursue other "liquidity enhancing measures" and not consider raising capital in the "current depressed market conditions."