Brian Nelson

Costco Is Not Immune to Tariff Pressures

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Image Source: Costco By Brian Nelson, CFA On March 6, Costco (COST) reported mixed second quarter fiscal 2025 results with revenue exceeding the consensus forecast but GAAP earnings per share missing the mark. Net sales in the quarter advanced 9.1%, while total company comparable sales growth came in at 6.8%. E-commerce revenue increased 20.9% (22.2% adjusted) in the 12 weeks ended February 16, 2025. Backing out changes in gasoline prices and foreign exchange, total company comparable store sales increased 9.1% (versus 6.8% consensus). Net income for the quarter came in at $1.788 billion, or $4.02 per share, compared to $1.743 billion, or $3.92 per diluted share in last year’s quarter. Management noted the following about tariffs on the conference call: … Read more

Enterprise Products Partners Remains a Key Idea

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Image: Enterprise Products Partners units have fared well since the beginning of 2023. By Brian Nelson, CFA Enterprise Products Partners (EPD) recently reported fourth quarter results that came in better than expected on both the top and bottom lines. Enterprise reported net income attributable to common unitholders of $1.6 billion, or $0.74 per diluted common unit, which was a 3% increase compared to last year’s marks. Distributable cash flow [DCF] was $2.2 billion for the fourth quarter of 2024 compared to $2.1 billion in the same period a year ago. Distributions increased 3.9%, to $2.14 per common unit annualized, compared to distributions declared in the same quarter last year. DCF offered 1.8 times coverage of the distributions declared for the … Read more

Home Depot Impacted By Higher Interest Rate Environment, Raises Dividend

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Image: Home Depot’s shares have done well since the beginning of 2023. By Brian Nelson, CFA Home Depot (HD) recently reported fourth quarter fiscal 2024 results that came in better than expected on both the top and bottom lines. Thanks in part to an extra week of sales in the most recently reported fourth quarter, sales for the fourth quarter increased 14.1% from the fourth quarter of fiscal 2023. Comparable sales for the fourth quarter of fiscal 2024 increased 0.8%, while comparable sales advanced 1.3% in the U.S. Net earnings for the fourth quarter came in at $3.0 billion, or $3.02 per share, compared with net earnings of $2.8 billion, or $2.82 per diluted share in the same period of … Read more

Nvidia Delivers in Fiscal Fourth Quarter

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Image Source: Nvidia By Brian Nelson, CFA Nvidia (NVDA) reported fiscal fourth quarter results that beat expectations on both the top and bottom lines. The bellwether reported record quarterly revenue of $39.3 billion, up 12% sequentially and 78% from the same period a year ago. Data Center revenue of $35.6 billion set another record, up 16% sequentially and 93% higher than the same period last year. Consensus for Data Center revenue was $34.1 billion, a nice beat. The company achieved a gross margin of 73% in the quarter, down 1.6 percentage points sequentially and down 3 percentage points on a year-over-year basis. Its operating margin was 61.1% in the quarter. GAAP earnings per diluted share in the quarter came in … Read more

Public Storage Impacted by California Wildfires

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Image Source: Public Storage By Brian Nelson, CFA Public Storage (PSA) reported mixed fourth quarter results February 24 with revenue coming in line with the Street’s expectations, but funds from operations (FFO) falling below the consensus forecast. Net income allocable to common shareholders was $3.21 per diluted share, while core FFO allocable to common shareholders was $4.21 per diluted share. In the fourth quarter, Public Storage achieved 79.2% same store direct net operating income margin, acquired 17 self-storage facilities with 1.3 million net rentable square feet, and opened three new facilities and completed several expansion projects that added 0.4 million net rentable square feet. At the end of 2024, Public Storage had a number of facilities in development and expansion, … Read more

Domino’s Remains a Key Idea in the Best Ideas Newsletter Portfolio

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Image: Domino’s shares have advanced nicely since the beginning of 2023. By Brian Nelson, CFA Domino’s (DPZ) reported mixed fourth quarter results February 24, with revenue and GAAP earnings per share coming in lower than the consensus forecast, but the company raising its quarterly dividend 15%, to $1.74 per share. Global retail sales, excluding foreign exchange impact, in the fourth quarter grew 4.4%, with U.S. same store sales growth of 0.4% and International same store sales growth of 2.7%. Total revenues increased 2.9%, while income from operations advanced 6.4% in the fourth quarter. Diluted earnings per share increased 9.2%, to $4.89, in the quarter. Management had the following to say in the press release: Domino’s 2024 results demonstrated that our … Read more

Energy Transfer Now Covers Distributions with Free Cash Flow

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Image Source: Energy Transfer By Brian Nelson, CFA Energy Transfer (ET) recently reported fourth quarter results that were shy of Street expectations. Net income attributable to partners for the three months ended December 31 2024 was $1.08 billion, or $0.29 per unit. Adjusted EBITDA for the three months ended December 31, 2024 was $3.88 billion compared to $3.6 billion for the same period a year ago, an increase of 8%. Distributable cash flow attributable to partners, as adjusted, for the quarter was $1.978 billion, or $0.57 per diluted unit. Growth capital spending was $1.22 billion in the fourth quarter, while maintenance capital expenditures were $309 million. Energy Transfer’s volumes performed well in the quarter. Crude oil transportation volumes were up … Read more

Booking Holdings’ Revenue Accelerates in Fourth Quarter

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Image Source: Booking Holdings By Brian Nelson, CFA On February 20, Booking Holdings (BKNG) reported better than expected fourth quarter results with revenue and non-GAAP earnings per share exceeding the consensus forecast. Room nights grew 13% compared to the fourth quarter of 2023, while gross bookings advanced 17% year-over-year (up 18% on a constant-currency basis) in the quarter. Revenue increased 14% (up 15% on a constant-currency basis) from the same period a year ago, better than the 11% (up 12% on a constant currency basis) it recorded for all of full year 2024. Adjusted earnings per share was up 30% on a year-over-year basis, while adjusted EBITDA advanced 26%. Management had the following to say about the results: We are pleased … Read more

Walmart’s Earnings Outlook Falls Short of Expectations

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Image Source: Walmart By Brian Nelson, CFA On February 20, Walmart (WMT) reported better than expected fiscal fourth quarter results, but issued guidance lower than what the Street was looking for. Revenue increased 4.1%, or 5.3% in constant currency in the quarter, while its gross margin rate advanced 53 basis points. Operating income increased $0.6 billion, or 8.3% (adjusted up 9.4% constant currency) thanks to higher gross margins, growth in membership income and improved economics in eCommerce, which grew revenue 16% led by store-fulfilled pickup and delivery. Global advertising revenue advanced 29%, including 24% for Walmart Connect in the U.S. Adjusted earnings per share came in at $0.66 in the quarter, up from $0.60 in the same period a year … Read more

Albemarle Has Line of Sight to Breakeven Free Cash Flow in 2025

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Image Source: Albemarle By Brian Nelson, CFA On February 12, Albemarle (ALB) reported weak fourth quarter results with both revenue and non-GAAP earnings per share falling below the consensus forecast. Revenue dropped nearly 48% in the quarter due to lower pricing and volumes in its Energy Storage division, but net income, adjusted EBITDA, and diluted earnings per share attributable to common shareholders swung to profitability in the fourth quarter. Adjusted diluted loss per share improved to $1.09 from $5.19 in the same period a year ago. Management had the following to say in the press release: We are taking decisive actions to reduce costs, optimize our conversion network and increase efficiencies to preserve our long-term competitive position. As we look … Read more