- Brian Turner
- 17 Nov, 2022
- New York City
Housing market continues to slide downwards since the rise of the mortgage rate doubled in the year so far and jumped to the level last seen in 2001.
Housing starts in October declined 4.2% in October from the previous month to a seasonally adjusted annual rate of 1.425 million., the U.S. Census Bureau reported Thursday.
Compared to a year ago, housing starts fell 8.8%.
Single family housing starts fell 6.1% annual rate to 855,000 and starts for multi-family units decreased 0.5% to 556,000.
Building permits declined 2.4% to 1.56 million from 1.564 in September and dropped 10.1% from a year ago rate of 1.698 million.
Seasonally adjusted housing completions in October fell 6.4% to annual rate of 1.339 million from the revised September estimate of 1.431 million.
Completions are 6.6% from a year ago rate of 1.256 million.
- Brian Turner
- 17 Nov, 2022
- New York City
For the week ending November 12, initial jobless claims declined 4,000 to 222,000 .
The claims in the previous week were revised to 226,000., said the U.S. Department of Labor in its weekly report.
Continuing jobless claims rose to 1.507 million for the week ending on November 5 from the previous week's 1,494 million claims.
The continuing claims have jumped to the March 26 level of 1.529 million.
Despite the historic low level of insured unemployment rate, the government reported data understate the unemployed counts.
A number of states are still struggling with online systems where unemployed can file their jobless claims.
For example, Florida's filing system for jobless claims is filled with glitches and malfunction that goes back to the pandemic era causing many to lose benefits for weeks.
- Scott Peters
- 17 Nov, 2022
- New York City
Bath & Body Works Inc soared 21% to $37.80 after the retailer of personal products including candles and fragrances lifted its annual estimate.
Third quarter earnings per share were 40 cents, ahead of the guidance range between 10 cents and 20 cents, but lower than 66 cents a year ago.
Cisco Systems gained 4.5% to $46.04 after the company reported better-than-expected quarterly results.
EZCorp declined 7.5% to $9.04 after the operator of pawn shops reported fiscal fourth quarter revenue increase 21% to $233.4 million from $192.4 million a year ago.
Net income in the quarter increased to $7.3 million from $1.6 million and diluted earnings per share rose to 11 cents from 3 cents a year ago.
Pawn loans outstanding increased 19% to a record-high of $210.0 million.
Kohl's Corporation gained 2.2% to $30.56 after the retailer withdrew its annual outlook citing macro headwinds and economic uncertainty and the recent departure of the chief executive Michelle Gass.
Total revenue in the third quarter declined 7.2% to $4.3 billion from $4.6 billion a year ago.
Third quarter net income plunged 60% to $97 million from $243 million and diluted earnings per share dropped to 83 cents from $1.65 a year ago.
The company previously announced 50 cents a share dividend.
Stock traded higher on the hopes that the chip demand will recover in the first quarter of 2023.
Macy's Inc soared 12.01% to $22.11 after the company said same store sales fell less than expected and quarterly results were ahead of expectations.
The retailer also lifted its annual outlook.
Nvidia Corporation declined 0.2% to $158.86 after the graphics chipmaker reported lower-than-expected revenue and earnings in its latest quarter.
Total revenue declined to $5.93 billion, down 17% from a year ago and down 12% from the previous quarter.
Net income declined 72% to $680 million from $2.46 billion and diluted earnings per share dropped to 27 cents from 97 cents a year ago.
The chip maker guided fourth quarter revenue of $6 billion with a band of 2%.
- Barry Adams
- 17 Nov, 2022
- New York City
Benchmark indexes opened lower after Fed officials stepped up campaign to cool down expectations of slower rate hikes in the future.
- Scott Peters
- 16 Nov, 2022
- New York City
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.
Target plans to cut costs between $2 billion and $3 billion over the next three years, and the company sees opportunities to improvement efficiency after sales surged 40% since 2019.
Third quarter gross margin declined to 24.7% from 28.0% and operating margin fell to 3.9% from 7.8% a year ago.
Gross margins declined after the company was forced to deal with more inflow of goods and rising activities in distribution centers.
Higher markdowns rates, inventory shrinks and merchandise costs and freight rates also affected gross margin.
Inventories
Inventories rose at a slower pace to $17.1 billion at the end of the third quarter from $14.96 billion a year ago.
The company blamed $400 million lost in revenue on organized retail crime.
Cash Flow
Third quarter cash flow from operating activities plunged to $552 million from $5.6 billion a year ago .
Free cash flow turned to negative $3.77 billion from positive $3.1 billion a year ago.
Outlook
The retailer lowered its expectations for top line and bottom line as families struggle with rising gasoline prices and higher food costs and inflation.
The company said sales softness is likely to persist in the fourth quarter and forecasted comparable sales to decline in "low-single digit" and operating margin to decline around 3%.
Dividends and Stocks Repurchase
The quarterly dividend payout increased to $497 million from $440 million a year ago, reflecting a 20.0% increase in the dividend per share offset by fewer outstanding shares.
The company did not repurchase any of its shares in the quarter and still has about $9.7 billion available for purchase in its stock repurchase program.
Retail Network
The company operated 1,941 stores at the end of the third quarter compared to 1,924 a year ago.
The number of stores with more than 170,000 square feet was unchanged at 274 from a year ago.
The number of stores with an area between 50,000 and 169,999 square feet increased to 1,522 from 1,515 a year ago.
- Barry Adams
- 16 Nov, 2022
- New York City
Benchmark index dropped after Target issued gloomy holiday sales outlook and investors digested latest retail sales and industrial output data.
Retail sector stocks led the decliners 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 0.8% to 3,958.79 and the Nasdaq Composite index dropped 1.5% to 11,183.66.
Among the widely held tech stocks, Apple, Amazon, Meta Platforms and Intel dropped between 1% and 3.3%.
Crude oil fell $1.39 to $85.52 a barrel and natural gas futures rose 19 cents to $6.22 a thermal unit.
Treasury yields fell after the Federal Reserve Governor Chris Waller showed his willingness to slow rate hike following the two lighter-than-expected inflation reports.
"The data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike," Waller said at a gathering in Phoenix, Arizona today.
However, he stressed that the inflation is still too high and the Fed is not done in fighting 4-decade elevated inflation.
- Scott Peters
- 16 Nov, 2022
- New York City
Lowe's Companies soared 5.5% to $220.18 after the home improvement retailer lifted its full-year earnings outlook.
Total sales in the third quarter increased 2.6% 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 from $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 is looking to close the sale of its Canadian operation in the first quarter of 2023.
The company agreed to sell its Canadian network of 450 stores for $400 million to New York-based private equity investment company Sycamore Partners.
Lowe's Canada operated under several brand names including Reno-Depot, Lowe's Canada, Rona and Dick's Lumber.
"The sale of our Canadian retail business is an important step toward simplifying the Lowe's business model.
While this business represents approximately 7% of our full year 2022 sales outlook, it also represents approximately 60 basis points of dilution on our full year 2022 operating margin outlook," said Marvin R. Ellison, Lowe's chairman, president and CEO.
Inventories
Net merchandise inventories rose to $19.8 billion from $16.7 billion from a year ago.
Cash Flow
In the third quarter, net cash flow provided by operating activities declined to $8.1 billion from $9.2 billion a year ago.
Free cash flow dropped to roughly $7.0 billion from $8.0 billion a year ago.
Outlook
The company revised higher its full-year outlook on stronger-than-expected operating results.
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.
Dividends and Stock Repurchase
In the quarter, the company repurchased 20.5 million shares for $4.0 billion and paid $666 million in dividends.
In the third quarter a year ago, the company repurchased $2.8 billion of its shares and paid dividends of $551 million.
Store Network
Lowe's operates 1,969 home improvement stores and hardware store in the U.S. and Canada, representing 208 million square feet of retail selling space.
- 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.
- 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.
- 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.
- 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.
- 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.