Brian Nelson

Nordstrom Is the Best Omni-Channel Retailer

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Thursday afternoon, department store and discounter Nordstrom (click ticker for report: ) reported strong fourth-quarter results. Revenue jumped 14% year-over-year to $3.6 billion, roughly in line with consensus figures. Earnings were better than anticipated but boosted by the extra week, growing 26% year-over-year to $1.40 per share. Aggregate same-store sales jumped 6.3% during the quarter, driven mostly by strength at Nordstrom Rack. As we’ve mentioned before with regards to TJX (click ticker for report: ) and Ross Stores (click ticker for report: ), Nordstrom Rack is a wonderful business that delivers designer names at a discount to consumers. More importantly, its experience cannot be replicated nearly as easily online. eBay (click ticker for report: ) and Amazon (click ticker for … Read more

HP’s Turnaround Plugs Along

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After its fourth quarter revealed the Autonomy scandal, Hewlett-Packard (click ticker for report: ) announced decent first-quarter results for its 2013 fiscal year. Revenue fell 6% year-over-year to $28.4 billion, which was actually far better than consensus estimates. Earnings also fell, down 11% year-over-year to $0.82 per share. However, the number beat consensus, and it also exceeded HP’s internal guidance (Image Source: HPQ). On a geographic basis, we were pleased to see the pace of HP’s revenue declines moderate across the board, except for Europe (only Asia-Pacific posted growth—of 1%). The enterprise technology space is tempered, and we believe demand will improve once economic conditions cooperate (Image Source: HPQ). The firm’s Personal Systems segment continued to experience profit deterioration, with margins falling 250 basis … Read more

Dividend Increases for the Week Ending February 22

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This week was jam-packed with companies raising their quarterly cash dividends. Below we provide a list of firms that upped their dividends for the week ending February 22. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Firms Raising Their Dividends This Week Abercrombie & Fitch (ANF): now $0.20 per share quarterly dividend, was $0.175. Analog Devices (ADI): now $0.34 per share quarterly dividend, was $0.30. Chemung Financial (CHMG): now $0.26 per share quarterly dividend, was $0.25. Chesapeake Lodging Trust (CHSP): now $0.24 per share quarterly dividend, was $0.22. Cheviot Financial Corp. (CHEV): now $0.09 per share quarterly dividend, was $0.08 Corrections Corp of America … Read more

Wal-Mart Posts a Solid Fourth Quarter; Boosts Dividend

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Retailing goliath Wal-Mart (click ticker for report: ) announced decent fourth quarter results yesterday. Revenue increased 3.9% during the quarter to $127.1 billion, just a touch below consensus expectations. Earnings were better than expected, but boosted by a favorable tax rate, growing 11% year-over-year to $1.67 per share. Although the quarter was by no means a blockbuster one, we thought results were acceptable. Wal-Mart’s core US namesake business experienced 2.6% sales growth thanks to same-store sales that increased 1% (1.8% ex-fuel). Traffic declined marginally, down 0.1%, but average tickets were 1.1% higher than the year prior, and NPD indicated that the firm grew market share over the holiday season. Let’s not forget that Wal-Mart registered sales of nearly $75 billion during … Read more

Demand for the Model S Looks Solid But Will Tesla Live Up to the Hype?

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Electric vehicle maker Tesla (click ticker for report: ) announced fourth quarter results Wednesday afternoon that showed progress toward achieving breakeven. Revenue surged nearly 700% year-over-year to $306 million, exceeding consensus estimates. Tesla’s non-GAAP loss of $0.65 per share was worse than expected, and that loss balloons to $0.79 per share on a GAAP basis. The firm also burned through $101 million of cash, which was better than the prior quarter by about $60 million (but worse than the year-ago quarter by $20 million). Though it isn’t abnormal for a fast-growing company like Tesla to have a cash burn, we’d like to see the company at least breakeven with respect to operating cash flow, which it believes it can do … Read more

Cheesecake Factory and BJ’s Restaurants Buck the Earlier Trend

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We’ve received fairly consistent guidance from the casual dining space recently, with chains generally anticipating 1.5% to 3% same-store sales growth, countered with higher input costs. This is by no means incredibly bullish for the US economy, but we are happy to see firms looking for growth (even though the broader signals point to mediocre expansion). We aren’t fans of the space in particular, but if we see results accelerate (or slow) materially, it could be a sign of broader strength (or weakness). Earlier this week we examined the solid results and guidance from casual diners Texas Roadhouse (click ticker for report: ) and Red Robin (click ticker for report: ). The results from the Cheesecake Factory (click ticker for … Read more

Clash of the Titans: Team Icahn Wins This Round

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Since sparring on CNBC last month, hedge-fund legends Carl Icahn and Bill Ackman have stolen headlines, and the battle has moved on to Herbalife (HLF). With claims of a Ponzi scheme on one side of the battle countered by claims on the other side of selling the American dream and enabling entrepreneurs, the battle between Ackman and Icahn has resulted in a wild ride in shares of Herbalife. Still, with all the noise, we’re sticking to the fundamentals. On Tuesday, Herbalife reported that fourth quarter revenue rose 20% year-over-year to $1.1 billion, significantly higher than consensus estimates. Earnings jumped 22% year-over-year to $1.05 per share, easily exceeding consensus expectations. For the full year, the company grew sales 18% to $4.1 … Read more

Is a Casual Dining Recovery Underway?

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On Tuesday, casual dining firms Texas Roadhouse (click ticker for report: ) and Red Robin (click ticker for report: ) announced fourth-quarter results that were better than consensus expectations. This begs the question: could a prolonged slump in casual dining be nearing an end? Let’s take a look. Texas Roadhouse For the fourth quarter, Texas Roadhouse posted revenue growth of 12% year-over-year to $310 million, well above consensus estimates. The firm earned $0.19 per share, a 12% year-over-year increase and a penny better than consensus estimates. The chain also posted same-store sales growth of 4.4% at company restaurants and 4.5% at franchise owned restaurants. The firm was able to leverage this sales growth into operating-margin expansion of 70+ basis points … Read more

Dividend Growth Portfolio Holding Medtronic Posts Solid Third Quarter

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Dividend Growth Newsletter holding Medtronic (click ticker for report: ) announced solid third quarter results Tuesday morning. Revenue grew 3% (4% excluding currency) year-over-year to $4 billion, roughly in line with consensus estimates. Earnings exceeded consensus expectations by a few cents, growing 11% year-over-year to $0.93 per share on an adjusted basis. International revenue growth outpaced that of the US, growing 5% (7% excluding currency) to $1.9 billion, driven by 20% growth in emerging markets (which now accounts for 12% of revenue). We’re huge fans of this long-term trend, and we believe that growing wealth in emerging markets will provide a powerful tailwind to the core business for years to come. US revenue was roughly flat, but we (once again) … Read more

Michael Kors’ Third Quarter Reveals Strength

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On February 12, fast-growing retailer Michael Kors (KORS) announced spectacular fiscal year 2013 third quarter results. Revenue surged 70% year-over-year to $637 million, exceeding consensus expectations. Earnings were also fantastic, jumping 220% year-over-year to $0.64 per share, considerably above consensus estimates. Strength at the aspirational luxury brand hasn’t slowed yet, with same-store sales jumping 41% year-over-year, even as the company added 66 net new stores—a stark departure from competitor Coach (click ticker for report: ), which has struggled to compete with Michael Kors. Gross margins, while still well below those at Coach, jumped 80 basis points to 60.4%, reflecting the firm’s increase in its store base (as well as fewer discounts and a favorable shift in product mix). Though we … Read more