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Walmart surpasses holiday expectations on Wall Street with a significant surge in e-commerce sales.

Posted on February 20, 2024September 1, 2024 by admin

On Tuesday, Walmart reported a 6% increase in quarterly revenue, fueled by robust holiday season sales and a double-digit growth in global e-commerce sales. The retail giant also disclosed its acquisition of smart TV manufacturer Vizio for $2.3 billion, aiming to boost its advertising business. Despite a more cautious approach from customers, with fewer items in their baskets but more frequent shopping, Walmart noted continued sales strength post-holiday.

Key financial figures for the quarter exceeded Wall Street expectations:

Earnings per share: $1.80 adjusted (vs. $1.65 expected)
Revenue: $173.39 billion (vs. $170.71 billion expected)

Walmart’s net income for the period ending January 31 was $5.49 billion, or $2.03 per share, compared to $6.28 billion, or $2.32 per share, in the same period the previous year. The company expects consolidated net sales to rise 4-5% in the fiscal first quarter and adjusted earnings of $1.48 to $1.56 per share. For fiscal 2025, Walmart anticipates consolidated net sales to climb 3-4% and adjusted earnings of $6.70 to $7.12 per share.

Despite economic challenges, Walmart has performed well, leveraging its value proposition, expanding revenue streams through advertising and third-party marketplaces, and introducing services like Walmart+. Comparable sales for Walmart U.S. increased by 4%, while global e-commerce sales surged 23%, exceeding $100 billion. Advertising revenue also grew globally by 33% and 22% in the U.S. year over year.

Walmart’s recent acquisition of Vizio is seen as an opportunity to accelerate growth in its high-margin, fast-growing business segments. In the U.S., customer transactions rose by 4.3%, although average spending per customer slightly declined. Walmart, in contrast to other companies, has announced plans to open or expand more than 150 stores over the next five years and has increased store manager wages. The company’s stock closed at $170.36, showing an 8% increase year-to-date, outperforming the S&P 500.

PepsiCo surpasses earnings expectations, yet experiences a decline in quarterly revenue for the first time in almost four years

Posted on February 12, 2024September 1, 2024 by admin

PepsiCo released a set of quarterly results reflecting a mixed performance, attributing weakened demand for its food and beverages in North America. CEO Ramon Laguarta noted a broad slowdown in U.S. sales during the fourth quarter, citing factors such as pricing and consumers’ disposable income constraints. Laguarta acknowledged a shift in consumer behavior towards acquiring snacks and Gatorade from convenience stores instead of consuming them at home. Despite the challenges, he expressed optimism about the overall consumer landscape, highlighting low unemployment rates and expectations of interest rate reductions and faster wage growth compared to inflation by summer.

PepsiCo’s reported figures, compared to Wall Street expectations, are as follows:

Earnings per share: $1.78 adjusted (vs. $1.72 expected)
Revenue: $27.85 billion (vs. $28.4 billion expected)

The company reported fourth-quarter net income of $1.3 billion, or 94 cents per share, up from $518 million, or 37 cents per share, a year earlier. Excluding items, the adjusted earnings per share stood at $1.78. Net sales experienced a slight decline of less than 1% to $27.85 billion, marking the first quarter since 2020 with a year-over-year revenue drop. Currency exchange rates contributed to a 1.5% decline in net sales.

PepsiCo’s organic revenue, excluding acquisitions and divestitures, increased by 4.5% in the quarter, driven by higher prices. However, these raised prices negatively impacted demand for the company’s food and beverages, leading to a decline in volume.

Executives cited high borrowing costs and reduced personal savings squeezing consumer budgets, especially in North America. Consumers are increasingly opting for smaller pack sizes due to their convenience and lower price points.

Specific divisions faced challenges, with the North American Quaker Foods division reporting an 8% decline in volume, impacted by a voluntary recall of granola bars and cereals. Frito-Lay North America saw a 2% drop in volume, and Pepsi’s North American beverage unit experienced a 6% decline in volume during the quarter.

Looking ahead to 2024, PepsiCo expects organic revenue to rise at least 4%, with core constant currency earnings per share climbing at least 8%. This outlook represents a slight adjustment from the previous forecast, with the company previously anticipating an increase in organic revenue on the high end of 4% to 6% and core constant currency earnings per share growth in the high single digits. Executives anticipate a challenging first half of the year, citing product recalls impacting the North American Quaker Oats business and international conflicts affecting sales in some regions. They expect international organic revenue growth to surpass that of North America for the full year.

SoftBank’s Vision Fund records its largest gain in nearly three years at $4 billion, as tech valuations recover.

Posted on February 8, 2024September 1, 2024 by admin

SoftBank, in the December quarter, achieved its most substantial gain in nearly three years at its flagship tech investment arm, the Vision Fund, driven by a rebound in technology company valuations. Here’s a breakdown of SoftBank’s performance against LSEG estimates:

Net sales: 1.77 trillion Japanese yen ($11.9 billion) versus the expected 1.8 trillion Japanese yen.
Net income: 950 billion Japanese yen versus the expected 196.5 billion yen.

The Vision Fund reported a gain on investment of 600.7 billion Japanese yen, marking a continued recovery from record losses in the previous fiscal year. This gain is the highest since the March 2021 quarter.

Notably, SoftBank achieved its first quarterly profit in five quarters, marking a turnaround from four consecutive losses.

In the prior fiscal year ending in March, the Vision Fund faced challenges, posting a record loss of around $32 billion due to a decline in tech stock prices and setbacks in some Chinese business ventures.

The Vision Fund has shown positive results in the last three quarters, with rising valuations from key investments in Didi, the Chinese ride-hailing app, and ByteDance, the owner of TikTok.

SoftBank founder Masayoshi Son announced a shift to “defense” mode in 2022, slowing investments and adopting a cautious approach. However, in June, Son indicated a move to “offense” mode, expressing excitement about the potential of artificial intelligence technology, an area where the Vision Fund has investments, including in China’s SenseTime.

In the December quarter, SoftBank gained $5.5 billion from the sale of shares of its majority-owned chip designer, Arm, which went public in the U.S. last year. SoftBank’s CFO, Yoshimitsu Goto, highlighted Arm’s significant contribution to the global AI evolution.

SoftBank has undergone a strategic shift from being “Alibaba-centric” to an “AI-centric” portfolio. The company has reduced its stake in Alibaba, with the Chinese giant accounting for nearly zero percent of SoftBank’s assets at the end of the December quarter, down from 50% at the end of December 2019. In contrast, Arm’s contribution to SoftBank’s assets has increased from 9% to 32% during the same period.

As the lock-up period for Arm shares post-IPO expires in March, there is speculation that SoftBank might consider a buyback of its own shares by selling Arm stock. Goto emphasized SoftBank’s reduced investment exposure to China, indicating a shift in the company’s focus.

General Motors is scheduled to disclose its earnings ahead of the market opening. Here’s the anticipated forecast from Wall Street.

Posted on January 30, 2024September 1, 2024 by admin

General Motors is poised to announce its fourth-quarter earnings before the opening bell on Tuesday. According to average estimates compiled by LSEG (formerly Refinitiv), Wall Street is anticipating the following:

Adjusted earnings per share: $1.16
Revenue: $38.67 billion

If these projections hold, it would signify a 10.3% decline in revenue compared to the previous year and a substantial 45.3% drop in adjusted earnings per share. GM’s fourth-quarter results for 2022 included $43.11 billion in revenue, net income attributable to stockholders of $2 billion, and adjusted earnings before interest and taxes amounting to $3.8 billion.

In addition to quarterly earnings, investors are keenly observing for any residual or unforeseen costs stemming from the company’s new labor contract, negotiated last year with the United Auto Workers union. Moreover, the focus is on GM’s 2024 guidance.

Analysts on Wall Street anticipate a “flattish” forecast from GM compared to the previous year’s earnings. The normalization of favorable vehicle pricing, which has led to record profits in recent years, is expected. Simultaneously, cost-cutting measures are projected to help offset higher labor costs resulting from the UAW deal.

In November, GM CEO Mary Barra stated that the company is finalizing a budget for 2024 to “fully offset the incremental costs of our new labor agreements.”

GM reinstated its 2023 guidance in November, encompassing net income attributable to stockholders of $9.1 billion to $9.7 billion, or EPS of $6.52 to $7.02; adjusted earnings before interest and taxes of $11.7 billion to $12.7 billion, or $7.20 to $7.70 adjusted EPS; and adjusted automotive free cash flow of $10.5 billion to $11.5 billion.

The guidance factored in an estimated $1.1 billion EBIT-adjusted effect from approximately six weeks of U.S. labor strikes and some costs associated with an accelerated $10 billion share repurchase program announced in November.

Investors are also eager for updates on GM’s new electric vehicles and Cruise, GM’s majority-owned autonomous vehicle subsidiary currently under investigation following an October pedestrian accident in San Francisco. Cruise and GM released findings of internal investigations last week, highlighting cultural issues, regulatory challenges, and leadership shortcomings at the company but concluding that officials did not intentionally deceive regulators. Cruise remains under investigation by various entities, including the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

Dollar General’s CEO, back at the helm, endeavors to steer a course correction amid regulatory penalties, disorganized store aisles, and public ridicule, including late-night satire

Posted on December 12, 2023August 31, 2024 by admin

Dollar General is facing significant challenges, including steep fines for safety violations, negative publicity, and shareholder dissent. In response, CEO Todd Vasos outlined a plan during an earnings call to address the company’s performance and public relations issues. The strategy includes placing more workers at the front of stores, slowing down new store openings, removing underperforming items from shelves, and enhancing efforts to maintain product availability.

This marks Vasos’ first earnings call since returning to the CEO position after the ousting of his predecessor, Jeff Owen. The leadership change was deemed necessary to restore stability and confidence, according to the board’s chairman, Michael Calbert.

Despite surpassing Wall Street’s expectations for the fiscal third quarter, Dollar General has faced a tough year. While it remains the fastest-growing retailer by store count, sales have slowed, the stock price has dropped significantly, and the company’s reputation has suffered due to federal scrutiny over work conditions.

The company has incurred over $21 million in fines from the Occupational Safety and Health Administration (OSHA) for safety violations. Shareholders have also voted for an independent audit into worker safety, a move opposed by the company. Dollar General’s challenges have been compounded by inflation and broader labor issues, attracting attention from media outlets like HBO’s “Last Week Tonight with John Oliver.”

Dollar General’s stock has declined by approximately 46% this year, significantly underperforming the S&P 500’s 18% gains. The company anticipates same-store sales to decline by about 1% to remain flat for the full year.

Vasos emphasized a “back to the basics” approach, focusing on retail fundamentals and addressing specific issues such as high turnover of store managers and inventory management. The company plans to invest $150 million in additional store labor hours this year, with a shift away from overreliance on self-checkout.

Changes noticeable to shoppers will include more employees at the front of stores, a reduction in the number of items sold (currently between 11,000 and 12,000), and a shift away from self-checkout as the primary checkout method. Dollar General aims to open 800 stores, remodel 1,500 stores, and relocate 85 stores in the next fiscal year, emphasizing a focus on existing stores and cost reduction.

Tag: net income

Walmart surpasses holiday expectations on Wall Street with a significant surge in e-commerce sales.

SoftBank’s Vision Fund records its largest gain in nearly three years at $4 billion, as tech valuations recover.

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