U.S. Movers: Abercrombie & Fitch, Best Buy, Lowe's, Zoom Video

Scott Peters
21 Nov, 2023
New York City

Lowe's Companies dropped 5.3% to $193.59 after the home improvement retailer lowered its full-year sales and earnings outlook.

Net sales in the third quarter declined to $20.5 billion from $23.5 billion, net income soared to $1.8 billion from $154 million, and diluted earnings per share rose to $3.06 from 25 cents a year ago.

Earnings in the prior year included an impairment charge of $2.1 billion after the company sold its Canadian retail business.

During the quarter, the company repurchased approximately 7.3 million shares for $1.6 billion and paid $642 million in dividends.

Comparable sales in the quarter declined 7.4% after the pandemic-fueled demand for home improvement projects moderated.

The company lowered its full-year 52-week sales estimate to $86 billion from the previous estimate range of $87 billion to $89 billion.

Comparable sales are expected to decline 5% from the previously estimated range of 2% to 4%.

The company also lowered its adjusted diluted earnings per share estimate to $13.0 from the previous estimate between $13.20 and $13.60.

Zoom Video Communication declined 1.4% to $65.03 after the company released quarterly results.

Revenue in the fiscal third quarter ending in October increased 3.2% to $1.2 billion from $1.1 billion, net income advanced to $141.2 million from $48.2 million, and diluted earnings per share rose to 47 cents from 16 cents a year ago.

Enterprise subscribers continued to expand and rose 5% from a year ago to 219,700.

About 3,731 customers, an increase of 13.5% from a year ago, paid more than $100,000 in the trailing twelve months.

The company guided fiscal fourth quarter revenue between $1.125 billion and $1.130 billion, and non-GAAP diluted earnings per share are estimated between $1.13 and $1.15.

Zoom lifted its fiscal year 2024 revenue estimate to between $4.506 billion and $4.511 billion, and non-GAAP diluted earnings per share to between $4.93 and $4.95.

Best Buy Company declined 5.2% to $64.60 after the retailer lowered its annual and quarterly sales outlook.

Revenue in the third quarter declined to $9.7 billion from $10.6 billion, net income fell to $263 million from $277 million, and diluted earnings per share declined to $1.21 from $1.22 a year ago.

Domestic comparable sales declined 7.3% after falling 10.5% in the quarter a year ago, and the company said comparable sales tend to fall between 3% and 7%.

However, the retailer said non-GAAP operating costs in the quarter are likely to rise between 4.7% and 5.0%, matching the increase of 4.8% in the quarter a year ago.

Best Buy estimated fiscal year 2024 revenue for 53 weeks to range between $43.1 billion and $43.7 billion, lower than the previous estimate between $43.8 billion and $44.5 billion.

Comparable sales in the fiscal year are expected to fall between 6.0% and 7.5%, compared to the previous estimate of a decrease between 4.5% and 6.0%.

Abercrombie & Fitch declined 4.9% to 68.0 after the retailer reported quarterly results.

Net sales in the fiscal third quarter increased 20% to $1.1 billion from $880 million, and the retailer swung to a net income of $97.7 million from a loss of $718 million, and diluted earnings per share were $1.83 compared to a loss of 4 cents per share a year ago.

Comparable sales across both brands increased 16% after a 26% jump in Abercrombie & Fitch and a 7% rise in Hollister stores.

Sales in the fiscal fourth quarter are expected to rise in low double-digits from $1.2 billion a year ago, and the retailer said operating margins are estimated to improve from the previous year because of higher retail prices and lower freight costs.

The company lifted its 2023 sales growth outlook to between 12% and 14% from $3.7 billion in 2022, compared to the previous growth estimate of 10%.

Abercrombie revised its operating margin to be around 10%, up from the previous estimate between 8% and 9%, which includes the 250 basis point benefits of lower freight costs.