Thursday November 30, 2023
Lululemon Reports Earnings
Lululemon reported quarterly revenue of $2.8 billion, a 30% increase from last year's fourth quarter revenue of $2.1 billion. This exceeded analysts' expectations of $2.7 billion. Full-year revenue reached $8.1 billion, up from $6.3 billion one year ago.
"In the fourth quarter and full year 2022, we delivered strong results across the business driven by our innovative products, powerful guest experiences, and strategic market expansion," said Lululemon CEO, Calvin McDonald. "Our continued high level of performance is a reflection of the hard work and agility of our incredible teams and the deep connections they create with our guests and communities around the world."
The company announced net income of $119.8 million or $0.94 per adjusted share for the quarter. This is down from net income of $434.5 million or $3.36 per adjusted share one year ago. Net income for the full year was $854.8 million compared to $975.3 million in fiscal 2021.
Lululemon opened 32 net new company-operated stores during the fourth quarter, bringing the total number of open stores to 655 at the end of the quarter. The company reported comparable sales increased 27% in the fourth quarter. Inventory for fiscal 2022 increased 50% to $1.4 billion compared to the $966.5 million at the end of fiscal 2021. The company expects fiscal 2023 revenue between $9.3 billion and $9.4 billion or $11.50 to $11.72 per adjusted share.
Lululemon Athletica, Inc. (LULU) shares closed at $364.19, up 15.2% for the week.
Lovesac Posts Comfortable Earnings
The Lovesac Company (LOVE) released its fourth quarter and full-year earnings on Tuesday, March 28. The home-furnishing brand exceeded expectations in net sales for the quarter causing its shares to rise 15% following the release of the report.
The company reported net sales of $238.8 million for the quarter. This was up 22% from $196.2 million in the same quarter last year and exceeded analysts' expectations of $220.8 million in net sales for the quarter. Full-year net sales reached $651.5 million, a 31% increase from $498.2 million one year ago.
"Amid considerable macroeconomic and consumer headwinds, Lovesac delivered very strong Q4 and Full Year 2023 results that drove tangible value for our shareholders, customers, associates and business partners," said Lovesac's CEO, Shawn Nelson. "Looking ahead to fiscal 2024, we will continue to surgically invest in growth initiatives and focus on strong execution to drive continued profitable growth."
Lovesac posted net income of $27.6 million or $1.74 per adjusted share for the quarter. This was down from the same quarter last year, where the company reported net income of $32.6 million or $2.03 per adjusted share. Full-year net income was $28.2 million, down 39% from $45.9 million this time last year.
The Connecticut-based furniture retailer saw an increase in net sales growth across all its commercial channels. The company reported a 16% comparable sales increase. Internet sales also saw growth with an increase of 26% during the fourth quarter. Comparable showroom sales rose by 10% in the quarter due to a strong holiday promotional campaign in conjunction with the addition of eight new showrooms and one kiosk. The company updated its guidance and expects fiscal 2024 net sales to be between $700 million to $740 million or $1.83 to $2.24 per adjusted share.
Lovesac Company (LOVE) shares ended the week at $28.90, up 13.3% for the week.
Dave & Buster's Sets Record Fourth Quarter Earnings
Dave & Buster's Entertainment, Inc. (PLAY) announced quarterly and full-year earnings results on Tuesday, March 28. The arcade company reported record fourth quarter and fiscal year end earnings, causing its stock to increase 3% following the release of the report.
Revenue reached a record of $563.8 million for the fourth quarter, a 64% increase from revenue of $343.1 million reported in the same quarter last year. Analysts expected quarterly revenue to reach $537 million. Full-year revenue was $1.9 billion compared to $1.3 billion last year.
"Driven by robust comparable walk-in sales growth and the tailwind of our special events business continuing its recovery toward pre-pandemic norms, we are pleased to report another strong quarter of financial results to mark our first fiscal year-end as a combined company," said Dave & Buster's CEO, Chris Morris. "Fresh off the heels of our annual general manager's conference, our exceptional team of operators and shared service center employees is motivated and energized to deliver on our goals we have set for the business in 2023 and beyond to realize our full potential."
Dave & Buster's reported quarterly net income of $39.1 million or $0.80 per adjusted share. During the fourth quarter a year ago, the company reported a net income of $25.7 million or $0.52 per adjusted share. Full-year net income was $137.1 million, up 7% from $108.6 million this time last year.
Dave & Buster's opened seven new Dave & Buster's branded stores during fiscal 2022, giving the company a total count of 152. The company reported comparable store sales increased by 19% from the same quarter last year. Walk-in comparable store sales also increased 12.1%. Food and beverage revenue reached $203.6 million during the quarter, representing 36.1% of total fourth quarter revenues. Amusement and other revenues were reported at $360.2 million for the quarter, accounting for 63.9% of total fourth quarter revenues.
Dave & Buster's Entertainment, Inc. (PLAY) shares closed at $36.79, relatively unchanged for the week.
The Dow started the week of 3/27 at 32,277 and closed at 33,274 on 3/31. The S&P 500 started the week at 3,983 and closed at 4,109. The NASDAQ started the week at 11,869 and closed at 12,222.
Treasury Yields on the Rise
On Friday, the Commerce Department announced that the Personal Consumption Expenditure (PCE), which measures the cost of goods and services purchased by U.S. households, rose 0.3% in February, this was less than economists' expectations of 0.4%. Core PCE, which excludes food and energy, saw an annual increase of 4.6%.
"The inflation trend looks promising for investors," said chief economist at LPL Financial, Jeffrey Roach. "Inflation will likely be below 4% by the end of the year, giving the Federal Reserve some leeway to cut rates by the end of the year if the economy falls into recession."
The benchmark 10-year Treasury note yield opened the week of 3/27 at 3.38% and traded as high as 3.61% on Wednesday. The 30-year Treasury bond opened the week at 3.65% and traded as high as 3.81% on Wednesday.
On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased by 7,000 to 198,000 for the week ending March 25, exceeding estimates of 195,000. Continuing unemployment claims increased 4,000 to over 1.69 million.
"The song remains the same for the labor market," said senior economic advisor at Brean Capital in New York, Conrad DeQuadros. "Layoffs remain at very low levels and the labor market remains extremely tight."
The 10-year Treasury note yield finished the week of 3/27 at 3.47%, while the 30-year Treasury note yield finished the week at 3.65%.
Mortgage Rates Continue Downward Trend
This week, the 30-year fixed rate mortgage averaged 6.32%, down from last week's average of 6.42%. Last year at this time, the 30-year fixed rate mortgage averaged 4.67%.
The 15-year fixed rate mortgage averaged 5.56% this week, down from 5.68% last week. During the same week last year, the 15-year fixed rate mortgage averaged 3.83%.
"Economic uncertainty continues to bring mortgage rates down," said Freddie Mac's Chief Economist, Sam Khater. "Over the last several weeks, declining rates have brought borrowers back to the market but, as the spring homebuying season gets underway, low inventory remains a key challenge for prospective buyers."
Based on published national averages, the savings rate was 0.37% as of 03/20. The one-year CD averaged 1.49%.
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