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Friday July 12, 2024

Finances

Finances
 

DICK'S Sporting Goods Announces Earnings

DICK’S Sporting Goods Inc. (DKS) announced its first quarter earnings on Wednesday, May 29. The Pittsburgh-based sporting goods chain’s stock rose 16% after reporting better-than-expected sales and earnings.

The retailer posted quarterly revenue of $3.02 billion, above analysts' expectations of $2.94 billion. This was up 6% from $2.84 billion at the same time last year.

“We are incredibly proud of our first quarter results,” said DICK’S Sporting Goods CEO, Lauren Hobart. “Our core strategies and execution are delivering strong results, and we are continuing to gain market share as consumers prioritize DICK'S Sporting Goods to meet their needs. Because of our strong Q1 performance, our expectations for continued robust demand from athletes and the confidence we have in our business, we are raising our full year outlook."

For the first quarter, DICK’S reported net income of $275.30 million or $3.30 per adjusted share. This was down from $304.65 million or $3.40 per adjusted share reported at this time last year.

DICK’S reported comparable store sales increased 5.3% year-over-year, which was attributed to an increase in transactions and higher average ticket amounts. At the end of the quarter, the company had a combined total of 857 stores comprised of 723 DICK’S Sporting Goods stores and 134 specialty concept stores. The company raised its guidance for fiscal 2024 and expects earnings per diluted shares to be between $13.35 to $13.75, with comparable store sales to increasing between 2.0% and 3.0%. DICK’S announced it authorized a quarterly dividend of $1.10 per share of common stock and Class B common stock payable on June 28, 2024 to shareholders of record on June 14, 2024.

DICK’S Sporting Goods Inc. (DKS) shares closed at $227.64, up 19% for the week.

Salesforce Posts Quarterly Report

Salesforce, Inc. (CRM) posted its quarterly earnings report for the first quarter on Wednesday, May 29. Despite reporting earnings that beat analysts’ expectations, the company missed expected revenue targets and shares fell 17% following the release.

The San Francisco-based company reported revenue of $9.13 billion, up 11% from $8.25 billion in revenue at this time last year. This fell short of analysts’ expected revenue of $9.17 billion for the quarter.

“Our profitable growth trajectory continues to drive strong cash flow generation,” said Salesforce CEO, Marc Benioff. “We are at the beginning of a massive opportunity for our customers to connect with their customers in a whole new way with AI. As the world’s number one AI CRM, we are incredibly well positioned to help companies realize the promise of AI over the next decade.”

Salesforce posted net income for the quarter of $1.53 billion or $1.56 per adjusted share. During the same quarter last year, the company reported net income of $199 million or $0.20 per adjusted share.

Salesforce’s subscription and support revenue grew 12% year-over-year to $8.59 billion. The company’s professional services and other revenues came in at $548 million, a decline of 9% from the year prior. For the first quarter, Salesforce anticipates an increase in revenue ranging between $9.20 billion to $9.25 billion but a decrease in earnings between $1.31 to $1.33 per share. For the full fiscal year 2025, Salesforce affirmed its revenue forecast of $37.7 billion to $38.0 billion but raised its adjusted earnings guidance to $9.86 to $9.94 per share.

Salesforce.com, Inc. (CRM) shares ended the week at $234.44, down 14% for the week.

Cracker Barrel Serves Up Quarterly Earnings

Cracker Barrel Old Country Store (CBRL) announced its third quarter earnings report on Thursday, May 30. The Tennessee-based company’s stock rose over 2% following the release.

Cracker Barrel posted quarterly revenue of $817.1 million. This was down 2% from $832.7 million during the same quarter last year and below analysts’ expectations of $820.6 million.

“As we indicated in our recent business update call, our third quarter results came in below expectations due to softer traffic than we originally anticipated, which underscores the importance of executing our strategic transformation,” said Cracker Barrel CEO, Julie Masino. “Our teams are fully committed to bringing these plans to life while continuing to deliver an exceptional guest experience and managing our business every shift, every day.”

Cracker Barrel reported third quarter net losses of $9.2 million or $0.41 per adjusted share. Last year at this time, the company reported net income of $14.0 million or $0.63 per adjusted share.

Cracker Barrel comparable store restaurant sales decreased 1.5%, while comparable store retail sales decreased 3.8%. The company ended the period with 658 Cracker Barrel stores and 63 Maple Street Biscuit Company stores, a net increase of four additional company-owned stores compared to the prior year. The company confirmed it authorized a quarterly cash dividend of $0.25 per share of common stock payable on August 6, 2024, to shareholders of record as of July 19, 2024. The company revised its full-year 2024 guidance and now anticipates revenue in the range of $3.47 billion to $3.51 billion, compared to the previous range of $3.5 billion to $3.6 billion.

Cracker Barrel Old Country Store, Inc. (CBRL) shares closed at $48.78, up 6% for the week.

The Dow started the week of 5/28 at 39,029 and closed at 38,686 on 5/31. The S&P 500 started the week at 5,316 and closed at 5,278. The NASDAQ started the week at 16,988 and closed at 16,735.

 

Treasury Yields Move Higher

U.S. Treasury yields rose early in the week as markets digested the latest consumer confidence index data. Yields pared back later in the week as investors reacted to the latest economic indicators of a possible interest rate cut by the Federal Reserve.

On Friday, the Commerce Department announced that the Personal Consumption Expenditure (PCE) index, which measures the cost of goods and services purchased by U.S. households, rose 0.3% in April and was up 2.7% year-over-year. Core PCE, which excludes food and energy, rose 0.2% in April and reached 2.8% on an annual basis, close to economists’ estimates of 2.7%.

“It will take a series of more favorable reports before the Fed feels confident enough to begin cutting interest rates,” said deputy chief U.S. economist for Oxford Economics, Michael Pearce. “With four more inflation reports to go between now and the September [Fed policymaking] meeting, we still think there is a good chance the Fed will cut rates at that meeting.”

The benchmark 10-year Treasury note yield opened the week of May 28 at 4.47% and traded as high as 4.64% on Wednesday. The 30-year Treasury bond opened the week at 4.58% and traded as high as 4.76% on Wednesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased 3,000 to 219,000 for the week ending May 25. Continuing unemployment claims increased 4,000, reaching over 1.79 million.

“Despite the week-on-week increase, the level remains in a range that suggests the labor market remains tight," said economist at Jefferies, Thomas Simons. “Continuing claims are still very low by any historical standard, and we still see the data as supporting the notion that people who lose a job are able to find a new one with relative ease.”

The 10-year Treasury note yield finished the week of 5/31 at 4.50%, while the 30-year Treasury note yield finished the week at 4.65%.

 

Mortgage Rates Move Higher

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, May 30. The survey showed mortgage rates increased for both the 30-year and 15-year fixed rates.

This week, the 30-year fixed rate mortgage averaged 7.03%, up from last week’s average of 6.94%. Last year at this time, the 30-year fixed rate mortgage averaged 6.79%.

The 15-year fixed rate mortgage averaged 6.36% this week, up from 6.24% last week. During the same week last year, the 15-year fixed rate mortgage averaged 6.18%.

“Following several weeks of decline, mortgage rates changed course this week,” said Freddie Mac’s Chief Economist, Sam Khater. “More hawkish commentary about inflation and tepid demand for longer-dated Treasury auctions caused market yields to rise across the board. This reality, as well as economic signals that have moved sideways over the last few weeks, have resulted in mortgage rates drifting higher as markets continue to dial back expectations of interest rate cuts.”

Based on published national averages, the savings rate was 0.45% as of 05/20. The one-year CD averaged 1.80%.

Editor’s Note: The publicly available financial information is offered as a helpful and informative service to our friends. This article is not an endorsement of any company, product or service.


Published May 31, 2024
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