AutoZone, Inc. (AZO) released its first quarter earnings report on Tuesday, December 10. The auto parts company’s shares dipped more than 2% after the company reported revenue and earnings that missed analysts’ estimates.

The company reported net sales of $4.28 billion during the quarter, below analysts’ expectations of $4.31 billion. This was up 2% from $4.19 billion in sales during the same quarter last year.

“We were pleased with the progress in our DIY same store sales result from the prior quarter as average ticket and traffic trends improved,” said AutoZone CEO, Phil Daniele. “We feel we are well positioned for growth heading into the remainder of the fiscal year, as we believe the initiatives we have in place to improve customer service and grow market share are on track. As we continue to invest in our business, we remain committed to our disciplined approach of a focus on increasing earnings and operating cash flow, all while delivering strong shareholder value.”

AutoZone reported net income of $564.93 million for the quarter or $32.52 per adjusted share. This was down from $593.46 million or $32.55 per adjusted share in the same quarter last year.

The Memphis, Tennessee-based company saw a 0.3% increase in their domestic same store sales, and a 1.0% increase in international same store sales for the quarter. During the quarter, AutoZone opened 34 new stores including 23 new stores in the U.S., six in Mexico and five in Brazil. At the end of the quarter, the company had a combined total of 7,387 stores globally. The company’s inventory increased 8.7% over the same period last year. The company returned $505.2 million to shareholders through share repurchases in the first quarter and has $1.7 billion remaining under its share repurchase authorization program.

AutoZone, Inc. (AZO) shares ended the week at $3,370.27, down 1% for the week.

Dave and Buster’s Releases Earnings Report

Dave and Buster’s Entertainment, Inc. (PLAY) announced its third quarter earnings on Tuesday, December 10. The arcade company reported lower than anticipated sales and the resignation of its chief executive officer, causing the company’s stock to fall nearly 15% following the earnings release.

Revenue reached $453.0 million for the third quarter. This was a 3% decrease from revenue of $466.9 million reported in the same quarter last year and below analysts’ expectations of $462.9 million.

“The Board worked closely with Chris [Morris] to create our company’s strategic direction and has the utmost confidence in this management team and the company’s strategy,” said Dave and Buster’s Interim CEO, Kevin Sheehan. “Overall, I am proud of the team’s commitment and dedication to creating memorable experiences for our valued guests each and every day and we are confident our initiatives will lead to growth in same store sales, revenue, and cash flow in the coming quarters for the benefit of our shareholders.”

Dave and Buster’s reported a quarterly net loss of $32.7 million or $0.84 per adjusted share. Last year at this time, the company reported a net loss of $5.2 million or $0.12 per adjusted share.

Dave and Buster’s combined comparable store sales decreased 7.7% compared to the same time last year. The company’s entertainment segment reported revenue of $294.6 million and food and beverage revenue came in at $158.4 million for the quarter. Store operating income before depreciation and amortization was $92.6 million, reflecting a 20% decrease from $102.9 million the prior year. The company opened three new stores in the quarter for a total of 227 locations by the end of the third quarter.

Dave and Buster’s Entertainment, Inc. (PLAY) shares closed at $27.48, down 26% for the week.

Adobe Announces Earnings Results

Adobe Inc. (ADBE) released its fourth quarter and full-year earnings report on Wednesday, December 11. The San Jose, California-based digital media and creative software company’s stock fell more than 7% after release of the report despite reporting record revenue.

The company posted quarterly net revenue of $5.61 billion. This was up 11% from reported revenue of $5.05 billion during the same quarter last year and ahead of analysts’ expectations of $5.54 billion. For the full year, the company’s revenue was up 11% to $21.51 billion.

"Adobe delivered record FY24 revenue, demonstrating strong demand and the mission-critical role Creative Cloud, Document Cloud and Experience Cloud play in fueling the AI economy," said Adobe CEO, Shantanu Narayen. "Our highly differentiated technology platforms, rapid pace of innovation, diversified go-to-market and the integration of our clouds position us for a great year ahead."

For the quarter, Adobe reported net income of $1.68 billion or $3.79 per adjusted share. This is up from $1.48 billion or $3.23 per adjusted share reported at the same time last year. For the full year, Adobe reported net income of $5.56 billion. 

Adobe’s fourth-quarter net revenues increased year-over-year in many segments of the company. The company’s digital media segment revenue increased 12% to $4.15 billion for the quarter. The company’s fourth-quarter creative segment revenue grew 10% to $3.30 billion. Adobe’s document cloud segment revenue was $843 million, a 17% increase year-over-year. The company’s digital experience segment revenue increased 10% to $1.40 billion and digital experience subscription revenue grew 13% to $1.27 billion, respectively. For the first quarter of fiscal 2025, Adobe expects revenue between $5.63 billion to $5.68 billion and earnings per share between $3.85 to $3.90.

Adobe Inc. (ADBE) shares closed at $465.69, down 16% for the week.

The Dow started the week of 12/9 at 44,638 and closed at 43,828 on 12/13. The S&P 500 started the week at 6,083 and closed at 6,051. The NASDAQ opened the week at 19,824 and closed at 19,927.

Treasury yields trended up this week as investors waited for the latest consumer price index data. Reports that inflation remains a concern, which suggested the Federal Reserve may hold off on further rate increases, boosted Treasury yields.

On Wednesday, the U.S. Bureau of Labor Statistics announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, increased 0.3% in November, in line with economists’ forecast. The CPI year-over-year came in at 2.7%, a slight increase from 2.6% in October but matching economists’ projections.

“As markets came into today’s figure with fears of an upside surprise, the in-line number is being received very positively,” said chief global strategist at Principal Asset Management, Seema Shah. “We expect the Fed to move off autopilot in January, adopting a more cautious tone, and slowing its pace of cuts to just every other meeting.”

The benchmark 10-year Treasury note yield opened the week of December 9 at 4.17% and traded as high as 4.34% on Thursday. The 30-year Treasury bond opened the week at 4.34% and traded as high as 4.56% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial unemployment claims increased by 17,000 to 242,000 for the week ending December 7. This was above economists’ estimate of 220,000. Continuing claims increased by 15,000 to 1.89 million.

"Claims are always volatile over the holidays, through mid-January, so it is even more important than usual to look at the trend rather than single week’s numbers," wrote senior U.S. economist at Pantheon Macroeconomics, Oliver Allen.

The 10-year Treasury note yield finished the week of 12/13 at 4.40%, while the 30-year Treasury note yield finished the week at 4.60%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, December 12. The survey indicated that the 30-year mortgage rate declined for the third straight week.

This week, the 30-year fixed rate mortgage averaged 6.60%, down from last week’s average of 6.69%. Last year at this time, the 30-year fixed rate mortgage averaged 6.95%.

The 15-year fixed rate mortgage averaged 5.84% this week, down from last week’s 5.96%. During the same week last year, the 15-year fixed rate mortgage averaged 6.38%.

“The 30-year fixed-rate mortgage decreased for the third consecutive week,” said Freddie Mac’s Chief Economist, Sam Khater. “The combination of mortgage rate declines, firm consumer income growth and a bullish stock market have increased homebuyer demand in recent weeks. While the outlook for the housing market is improving, the improvement is limited given that homebuyers continue to face stiff affordability headwinds.”

Based on published national averages, the savings rate was 0.43% as of 11/18. The one-year CD averaged 1.84%.

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