CarMax Dealing with Vehicle Affordability Issues
June 21, 2024
Image: CarMax’s shares have yet to recover from prior year highs. By Brian Nelson, CFA CarMax (KMX) reported better than expected first quarter fiscal 2024 results on June 21. Net sales declined ~7.5%, modestly better than the consensus estimate, while GAAP earnings per share of $0.97 edged out what the Street was looking for. Retail used unit sales decreased 3.1% from the same period a year ago, while comparable store used unit sales fell 3.8% and wholesale units dropped 8.3% on a year-over-year basis. Gross profit per retail used unit was $2,347, roughly in line with last year’s mark. CarMax Auto Finance (CAF) income grew 7% from last year’s quarter. Management had the following to say about the quarter: I
Dividend Increases/Decreases for the Week of June 21
June 21, 2024
Below we provide a list of firms that raised their dividends during the week ending June 21. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week 3i Group plc (TGOPY): now $0.1936 per share semi-annual dividend, was $0.1426. Asseco Poland S.A. (ASOZY): now $0.687 per share annual dividend, was $0.633. blueharbor bank (BLHK): now $0.20 per share special dividend, was $0.10. Canadian Banc (CNDCF): now CAD 0.1393 per share monthly dividend, was CAD 0.1354. China Foods Limited (CHFHY): now $0.324 per share annual dividend, was $0.268. Darden Restaurants (DRI): now
Kroger’s Identical Store Sales Beat Consensus
June 20, 2024
Image: Kroger’s shares have been choppy during the past couple years. By Brian Nelson, CFA On June 20, Kroger (KR) reported solid first-quarter fiscal 2024 results for the period ended May 25, 2024. Identical-store sales without fuel increased 0.5%, better than the consensus forecast, while adjusted earnings per share came in at $1.43, down from a year ago, but better than what the Street was looking for. Digital sales advanced 8%, while Delivery and Pickup combined for a double-digit increase. Adjusted FIFO operating profit was $1.499 billion in the quarter. Management had the following to say about the quarter: Kroger is off to a solid start in 2024 led by better-than-expected performance of our grocery business. Kroger is delivering exceptional
Lennar Navigating Fluctuating Interest Rate Environment Well
June 18, 2024
Image: Lennar has been a strong performer since the beginning of 2023. By Brian Nelson, CFA On June 17, homebuilder Lennar (LEN) reported better than expected second quarter results for fiscal 2024. Total revenues increased 9%, while diluted earnings per share leapt to $3.45 in the quarter from $3.01 in the same period a year ago. New orders jumped 19%, to 21,293 homes, while the firm’s backlog stood at 17,873 homes with a dollar value of $8.2 billion. Deliveries in the quarter increased 15%, to 19,690 homes. Its average sales price, net of incentives, per home delivered came in at $426,000 in the second quarter, while its homebuilding gross margin was up 10 basis points from last year, to 22.6%.
Adobe’s Outlook Doesn’t Disappoint
June 17, 2024
Image: Adobe’s shares are getting back on track after it issued a strong outlook for fiscal 2024. By Brian Nelson, CFA On June 13, Adobe (ADBE) reported better than expected second quarter results for fiscal 2024. Revenue grew 10% on a year-over-year basis (11% in constant currency), while diluted earnings per share came in at $4.48 on a non-GAAP basis. Non-GAAP operating income was $2.44 billion in the quarter, while the firm exited the period with $17.86 billion in remaining performance obligations. Management had the following to say about the quarter in the press release: Adobe achieved record revenue of $5.31 billion driven by strong growth across Creative Cloud, Document Cloud and Experience Cloud. Our highly differentiated approach to AI
Broadcom Issues Strong Guidance, Announces Stock Split
June 13, 2024
Image: Broadcom’s shares have done quite well in the past couple of years. We liked its fiscal second quarter results and outlook. By Brian Nelson, CFA On June 12, Broadcom (AVGO) reported second quarter fiscal 2024 results for the period ended May 5. The company beat revenue on both the top and bottom lines in the quarter. Revenue increased 43% from the year-ago period, while adjusted EBITDA increased from $5.7 billion to $7.4 billion in the quarter (59% of total revenue), making for some continued strong levels of profitability. Non-GAAP diluted earnings per share were $10.96 in the fiscal second quarter, up from $10.32 in the same quarter a year ago. Management’s commentary was positive in the press release: Broadcom’s
Oracle Misses in Q4 But Bookings Performance and Outlook Strong
June 12, 2024
Image: Oracle’s shares have done quite well since the beginning of 2023, and management’s outlook speaks to continued strength. By Brian Nelson, CFA On June 11, Oracle (ORCL) reported fourth quarter fiscal 2024 results that missed expectations on the top and bottom line, but the company’s total remaining performance obligations increased a whopping 44% on a year-over-year basis, to $98 billion–up $18 billion from the fiscal third quarter. Total quarterly revenue advanced 4% in constant currency, while non-GAAP operating income jumped 9% in constant currency. Management commented positively in the quarterly earnings press release about the pace of orders and the visibility it provides into the coming fiscal years: In Q3 and Q4, Oracle signed the largest sales contracts in
J.M. Smucker’s Free Cash Flow Outlook Solid
June 10, 2024
Image: J.M. Smucker’s shares have faced pressure during the past several months, but its free cash flow outlook looks solid. By Brian Nelson, CFA On June 6, J.M. Smucker (SJM) reported mixed fiscal fourth quarter results with revenue coming up a bit short relative to expectations and the bottom line coming in higher than consensus. Adjusted net sales, excluding acquisitions, divestitures, and foreign currency fluctuations advanced 3% thanks to better net price realization in its U.S. Frozen Handheld and Spreads, U.S. Retail Pet Foods, and for International and Away from Home. The company’s volume/mix increased 1% thanks to Smucker’s Uncrustables frozen sandwiches, Folgers coffee, Jif peanut butter, among other areas. Adjusted gross profit increased 15% in the quarter. Adjusted operating
Lululemon’s Fiscal First Quarter Results Well Received But Competition Remains Fierce
June 6, 2024
Image: Lululemon’s shares have been under considerable pressure so far in 2024. By Brian Nelson, CFA On June 5, Lululemon (LULU) reported better than expected first quarter fiscal 2024 results for the period ended April 28 that beat expectations on both the top and bottom lines. Net revenue increased 10% (11% on a constant dollar basis), while comparable sales increased 6% (7% on a constant dollar basis). The company’s operating margin faced pressure in the period, but its gross margin expanded 20 basis points from last year’s period. Its diluted earnings per share came in at $2.54 in the quarter versus $2.28 per share in the same period a year ago. Management’s commentary was upbeat in the press release: In
Hewlett Packard Enterprise Reports Strong AI Systems Revenue
June 5, 2024
Image: Hewlett Packard Enterprise is breaking out nicely. By Brian Nelson, CFA On June 4, Hewlett Packard Enterprise (HPE) reported better than expected fiscal second quarter results that showed a beat on both the top and bottom lines. The company’s revenue advanced 3% from the prior quarter last year (up 4% in constant currency), while its annualized revenue run rate came in at $1.5 billion, which was up 37% from the same period last year (up 39% in constant currency). Hewlett Packard Enterprise’s server revenue advanced 18% on a year-over-year basis in both actual dollars and in constant currency. Management spoke positively about the results and outlook: HPE delivered very solid results in Q2, exceeding revenue and non-GAAP EPS guidance.
