Chipotle’s Same Restaurant Sales Growth Continues to Shine
April 25, 2024
Image Source: Valuentum By Brian Nelson, CFA On April 24, Chipotle (CMG) reported excellent first-quarter 2024 results. Total revenue increased 14.1% thanks to comparable restaurant sales growth of 7%, higher transactions and an increase in the average check. Its operating margin came in at 16.3%, which was a nice bump from the 15.5% from last year’s quarter. Chipotle’s restaurant level operating margin also improved nicely by 190 basis points, to 27.5%. Adjusted diluted earnings per share came in at $13.37, which was an increase from the $10.50 mark it achieved in the same period a year ago. During the quarter, it opened 47 new restaurants with 43 of them including a Chipotlane drive thru. Management had the following to say about
Visa Benefiting from “Stable Consumer Spending”
April 24, 2024
By Brian Nelson, CFA On April 23, Visa (V) reported fantastic second-quarter results for its fiscal 2024. Both net revenue and GAAP net income increased 10%, while GAAP earnings per share advanced 12%. On a non-GAAP basis, net income advanced 17%, while earnings per share leapt 20%. Payments volume increased 8% in its fiscal second quarter, while total cross-border volume increased 16% on a constant-dollar basis and processed transactions advanced 11%. We liked the quarter and commentary from management: Visa delivered strong results in the second quarter, with net revenue up 10%, GAAP EPS up 12%, and non-GAAP EPS up 20%. Overall payments volume grew 8% and cross-border volume grew 16%, driven by stable consumer spending. As we head into
Lackluster Electric Vehicle Adoption Rates Impacting Tesla
April 24, 2024
Image Source: Tesla By Brian Nelson, CFA On April 23, Tesla (TSLA) reported lower-than-expected first-quarter 2024 results as reduced vehicle prices weighed on performance. Total automotive revenues fell 13% on a year-over-year basis, while total revenues, in aggregate, fell 9%. Its total gross profit fell 18%, while income from operations dropped by more than half. The first quarter was negatively impacted by the Red Sea conflict and an arson attack at Gigafactory Berlin. Management summed up the quarter with the following: Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs. While positive for our regulatory credits business, we prefer the industry to continue pushing EV adoption, which is in-line with our mission. To support
Philip Morris Targeting Strong Adjusted Diluted EPS Growth
April 23, 2024
Image: Philip Morris’ stock has traded sideways for more than a year now. By Brian Nelson, CFA On April 23, Philip Morris (PM) reported solid first-quarter results that beat expectations on both the top and bottom lines. Net revenues increased 9.7% in the first quarter, while operating income advanced 11.5%. The company’s adjusted operating income increased 11.3% thanks to a 0.9 percentage point increase in its adjusted operating income margin, to 38.2%. Adjusted diluted earnings per share grew to $1.70, up 23.2% excluding currency. The company continues to work toward becoming a smoke-free company, with its smoke-free business now accounting for roughly 39% of its total net revenues. Management had the following to say about the quarter: The strength of
PepsiCo Has Raised Dividends in Each of the Past 50+ Years
April 23, 2024
Image: Pepsi’s shares continue to be choppy, but we like its consecutive annual dividend growth streak. By Brian Nelson, CFA On April 23, PepsiCo (PEP) reported solid first-quarter 2024 results that showed a beat on both the top and bottom lines. On an organic basis, revenue grew 2.7% on a year-over-year basis, while core earnings per share of $1.61 beat the consensus number. Core constant currency earnings per share growth was 7% in the period. Management had a lot to say about the quarter and outlook in the press release: During the first quarter, our businesses remained agile and performed well, with a strong performance from our International business. We delivered a sequential improvement in our volume trends, and year-over-year
Lockheed Martin’s Robust Backlog Speaks of Sustainable Strength
April 23, 2024
Image: Shares of Lockheed have been choppy, but its fundamentals remain strong. By Brian Nelson, CFA On April 23, Lockheed Martin (LMT) reported better-than-expected first quarter 2024 results. Revenue advanced ~13.7% in the quarter on a year-over-year basis, while net earnings in the first quarter came in at $1.5 billion, or $6.39 per share, versus the $1.7 billion mark, or $6.61 per share, it put up in the first quarter of 2023. Cash from operations advanced to ~$1.64 billion, up from $1.56 billion in the year-ago quarter, but higher capital spending drove free cash flow slightly lower in the first period of 2024 than what it achieved in last year’s quarter. Management had a lot to say about the quarterly
Verizon Is a Cash-Generating Machine But Its Debt Load Is Worth Watching
April 22, 2024
Image Source: Verizon By Brian Nelson, CFA On April 22, Verizon (VZ) reported mixed first-quarter results. During the period, total operating revenue grew a modest 0.2% thanks in part to pricing actions, to $33 billion, while consolidated net income fell to $4.7 billion from $5 billion in the year-ago period. Adjusted earnings per share came in at $1.15, which compares to $1.20 in last year’s quarter. However, consolidated adjusted EBITDA came in at $12.1 billion, which was up from the $11.9 billion mark it registered in the year-ago period. Total wireless service revenue increased 3.3% thanks in part to pricing actions and a higher mix of premium pricing plans, while total broadband net additions totaled 389,000, revealing continued momentum in
Procter & Gamble Raises Core EPS Guidance
April 19, 2024
Image Source: P&G Q3 Earnings Presentation By Brian Nelson, CFA On April 19, Procter & Gamble (PG) reported mixed third quarter results for fiscal 2024. Organic sales advanced 3% in the period thanks almost entirely to higher pricing, while diluted net earnings per share increased 11% on a year-over-year basis (up 18% on a currency-neutral basis). The company experienced modest volume growth in its ‘Beauty,’ ‘Grooming,’ and ‘Fabric & Home Care’ divisions, but foreign currency headwinds were stiff. P&G experienced particularly strong pricing performance in its ‘Grooming’ division, where sales in the division were positively impacted by 10% from price, to drive overall net sales growth to 3% in the segment. Management’s commentary in the press release was upbeat: We
Netflix to Stop Reporting Membership Numbers Starting Next Year
April 19, 2024
Image: Netflix still has a lot of room for growth. By Brian Nelson, CFA On April 18, Netflix (NFLX) reported better than expected first quarter 2024 results. In the quarter on a year-over-year basis, the company’s revenue advanced ~15%, its operating income jumped ~54%, and its operating margin registered a roughly seven-percentage point increase, to 28%. Netflix’s top line was driven both by membership growth and pricing, and operating income benefited in part from higher-than-expected revenue performance and the timing of its content spending. Earnings per share came in at $5.28 in the quarter versus management’s $4.49 forecast. Netflix generated free cash flow of ~$2.14 billion in the quarter. Netflix continues to focus on building out its member base, while
Kinder Morgan Issues Strong Outlook; Adjusts Leverage Target
April 18, 2024
Image: Kinder Morgan’s shares have been choppy during the past couple years. By Brian Nelson, CFA On April 17, Kinder Morgan (KMI) reported first-quarter 2024 results. The company’s earnings per share came in at $0.33 per share in the quarter, while distributable cash flow [DCF] per share came in at $0.64 for the period, reflecting a 10% and 5% increase, respectively. Net income attributable to Kinder Morgan in the first quarter was $746 million, up from $679 million in the same period a year ago. DCF also moved in the right direction, coming in at $1.42 billion in the quarter, up from $1.37 billion in last year’s quarter. Kinder Morgan issued the following outlook for 2024: For 2024, including contributions
