Member Articles

Dollar General Hit By Hurricane-Related Expenses

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Image Source: Valuentum By Brian Nelson, CFA On December 5, Dollar General (DG) reported mixed third quarter results with revenue exceeding the consensus forecast, but GAAP earnings per share coming up short relative to expectations. Net sales increased 5% in the quarter thanks to positive sales contributions of new stores and same-store sales expansion of 1.3%, which reflected increases of 1.1% in average transaction amount and 0.3% in customer traffic. In the quarter, operating profit fell more than 25% and diluted earnings per share fell nearly 30%, however, as the company suffered from hurricane-related expenses. Management had the following to say about the quarter: We are pleased with our team’s execution in the third quarter, particularly in light of multiple … Read more

Lululemon’s International Business Powers Results, Tweaks 2024 Guidance

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Image Source: Lululemon By Brian Nelson, CFA On December 5, Lululemon (LULU) reported better than expected results for its third quarter of fiscal 2024, with both revenue and GAAP earnings per share exceeding the consensus forecasts. Net revenue increased 9% (8% on a constant dollar basis) in the quarter thanks primarily to strength in its International net revenue, which advanced 33% (30% on a constant dollar basis). Americas net revenue increased 2% in the quarter. Comparable sales advanced 4% (3% on a constant dollar basis) for the quarter led by International comparable sales growth of 25% (or 22% on a constant dollar basis). Americas comparable sales decreased 2%. Lululemon’s gross profit increased 12% in the quarter as its gross margin … Read more

Foot Locker Talks of a More Promotional Environment, Softening Consumer Spending

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Image Source: Foot Locker By Brian Nelson, CFA Foot Locker (FL) reported lower-than-expected third quarter results on December 4, with revenue and non-GAAP earnings per share coming in below the consensus forecasts. The company also lowered its 2024 sales and non-GAAP earnings per share outlook. Total revenue fell 1.4% year-over-year (down 2.2% on a constant currency basis) in the quarter, with comparable store sales up 2.4%. Foot Locker and Kids Food Locker experienced comparable store sales growth of 2.8%, while Champs Sports and WSS experienced comparable store sales growth of 2.8% and 1.8%, respectively. Foot Locker experienced gross margin expansion of 230 basis points year-over-year in the quarter, but the company’s non-GAAP earnings per share of $0.33 was lower than expectations. … Read more

Exxon Mobil’s Permian Assets Performing Well, Structural Cost Reductions on Track

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Image Source: Exxon Mobil By Brian Nelson, CFA Exxon Mobil (XOM) recently reported better than expected third quarter results, though performance faced some headwinds from lower industry refining margins and reduced natural gas prices. Total revenues and other income fell 0.8% in the quarter on a year-over-year basis, while earnings excluding identified items (non-GAAP) fell to $8.6 billion from $9.2 billion in the year-ago period. Diluted earnings per common share came in at $1.92 versus $2.25 in the same period a year ago. Management had the following to say about the quarter: We delivered one of our strongest third quarters in a decade. Our industry-leading results continue to demonstrate how our enterprise-wide transformation is improving the structural earnings power of … Read more

Salesforce Posts Mixed Results, Agentforce Capitalizing on AI Demand

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Image Source: Salesforce By Brian Nelson, CFA Salesforce, Inc. (CRM) reported mixed third quarter results on December 3 with revenue coming in ahead of the consensus forecast, but non-GAAP earnings per share coming in light versus what Wall Street had been looking for. Third quarter revenue grew 8% on a year-over-year basis with Subscription and Support revenue up 9%. Its third quarter GAAP operating margin was 20%, up 280 basis points year-over-year, while its non-GAAP operating margin came in at 33.1%, up 190 basis points year-over-year. In the quarter, non-GAAP diluted net income per share was $2.41, up 14% year-over-year. Management had the following to say about the quarter: We delivered another quarter of exceptional financial performance across revenue, margin, … Read more

Union Pacific’s Free Cash Flow Generation Remains Robust

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Image Source: Union Pacific By Brian Nelson, CFA Union Pacific (UNP) recently reported third quarter results that missed expectations on both the top and bottom lines, but the company remains one of our favorite railroads. Its operating revenue grew 3% in the quarter, to $6.1 billion, thanks to increased volume and core pricing gains that were only partially offset by business mix and lower fuel surcharge revenue. Freight revenue, excluding fuel surcharges, advanced 5% in the period, while revenue carloads grew 6% in the quarter. Union Pacific’s operating ratio improved 310 basis points in the quarter, to 60.3%, thanks in part to lower fuel prices. In the quarter, operating income increased 11%, while net income increased 9% and earnings per … Read more

Verizon Covering Dividends with Free Cash Flow

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Image Source: Verizon By Brian Nelson, CFA Verizon (VZ) recently reported mixed third quarter results, with revenue missing the consensus forecast and non-GAAP earnings per share edging out the market’s expectations by a penny per share. On a consolidated basis, total third-quarter operating revenue was essentially flat compared to the same period a year ago, while the company’s net income of $3.4 billion was weighed down by severance charges. Consolidated adjusted EBITDA for the third quarter came in at $12.5 billion, up from $12.2 billion in last year’s quarter. Adjusted earnings per share, excluding special items, was $1.19 in the quarter, down from $1.22 in the year-ago period. Management had the following to say about the quarter: This has been … Read more

Dick’s Sporting Goods Raises 2024 Guidance

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Image Source: Dick’s Sporting Goods By Brian Nelson, CFA On November 26, Dick’s Sporting Goods (DKS) reported better than expected third quarter results with revenue and non-GAAP earnings per share coming in above expectations. Net sales in the quarter advanced 0.5%, powered by a 4.2% in comparable store growth, which lapped 1.9% growth in the same period a year ago. Non-GAAP earnings per share fell 4%, to $2.75, but this was weakened by an unfavorable impact from a calendar shift to the tune of $0.35. Adjusted for this, non-GAAP earnings per share increased 8.8% in the quarter. Management was upbeat in the press release: Our strong third quarter results demonstrate the significant momentum we have in our business. We continue … Read more

Dividend Increases/Decreases for the Week of November 29

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Below we provide a list of firms that raised their dividends during the week ending November 29. 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                          AG Mortgage Investment Trust Pfd Shs (MITT.PR.C): now $0.733 per share quarterly dividend, was $0.500. Akastor ASA (AKRYY): now $2.812 per share annual dividend, was $0.233. Banco do Brasil S.A. (BDORY): now $0.0626 per share quarterly dividend, was $0.0254. Blue Owl Capital III (OBDE): now $0.37 per share quarterly dividend and $0.05 per share supplemental dividend, was $0.06. Delta Galil Industries (DELTF): now $0.31 … Read more

Yum Brands’ Taco Bell Division Remains Its Gem

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Image Source: Yum Brands By Brian Nelson, CFA Yum Brands (YUM) recently reported third quarter results that came up a bit short relative to the market’s forecast. The owner of KFC, Taco Bell, Pizza Hut, and Habit Burger experienced worldwide system sales growth, excluding foreign currency translation, of 1%, which reflects 5% unit expansion, including 1,029 gross new units in the quarter. Same store sales fell 4% at KFC and Pizza Hut, while they expanded 4% at Taco Bell in the quarter. Unit growth was most prevalent in its KFC Division, where the number of units expanded by 7%. GAAP operating profit and core operating profit advanced 1% and 3% in the quarter, respectively, led by 11% expansion in its … Read more