Member Articles

Campbell Soup’s Sovos Acquisition Helps Power Fiscal Fourth Quarter Results

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By Brian Nelson, CFA Campbell Soup (CPB) recently reported fourth quarter fiscal 2024 results that were mixed. Revenue came in slightly lower than forecast, while non-GAAP earnings per share was a bit higher than the consensus estimate. Net sales increased 11% thanks to its acquisition of Sovos Brands, but they fell 1% on an organic basis due to weaker net price realization. Adjusted earnings before interest and taxes [EBIT] increased 36%, to $329 million, which includes its acquisition of Sovos. Adjusted earnings per share increased 26%, to $0.63. Management had the following to say about the quarter: We finished fiscal 2024 with solid fourth-quarter performance including sequential volume improvement and margin expansion versus prior year and delivered significant progress against … Read more

Lululemon Lowers 2024 Outlook

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Image: Lululemon’s shares have come under pressure recently. By Brian Nelson, CFA Lululemon (LULU) reported mixed second quarter results on August 29 with revenue coming in slightly lower than the consensus estimate, and GAAP earnings per share beating consensus by $0.23. Net revenue increased 7% in the quarter (8% on a constant dollar basis) led by International net revenue growth of 29% (31% on a constant dollar basis). Americas net revenue increased 1%, or 2% on a constant dollar basis. Comparable sales increased 2% in the quarter, or 3% on a constant dollar basis, led by International growth as Americas comparable sales dropped 3%, or 2% on a constant dollar basis. Though sales growth left something to be desired, the … Read more

Dividend Increases/Decreases for the Week of August 30

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Below we provide a list of firms that raised their dividends during the week ending August 30. 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                          AGL Energy Limited (AGLXY): now $0.1421 per share semi-annual dividend, was $0.0987. ARCA biopharma (ABIO): now $1.59 per share special dividend. Atour Lifestyle Holdings (ATAT): now $0.15 per share, was $0.05. Canadian Western Bank 4.4 PF 5YR 1ST 5 (CWESF): now CAD 0.3982 per share quarterly dividend. Canadian Western Bank NON CUM SER 9 (CWB.PR.D:CA): now CAD 0.4782 per share quarterly dividend. Capital City … Read more

Best Buy Reports Better Than Expected Q2 Results; Raises Bottom Line Outlook

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Image: Best Buy’s shares are bouncing back on an improved earnings outlook. By Brian Nelson, CFA On August 29, Best Buy (BBY) reported better than expected second quarter fiscal 2025 results, with revenue and non-GAAP earnings per share coming in higher than the consensus forecast. Though comparable store sales declined 2.3% in the quarter, management noted that it delivered better performance in its Domestic tablet and computing categories, which together posted comparable sales growth of 6% versus the same period a year ago. Non-GAAP earnings per share increased 10%, to $1.34, in the quarter. Management spoke to industry stabilization in the press release: As we look to the back half of the year, we expect our industry to continue to … Read more

Salesforce Delivers on Second Quarter Fiscal 2025 Results

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Image: Salesforce’s shares have bounced back nicely during the past year. By Brian Nelson, CFA On August 28, Salesforce (CRM) reported better than expected second quarter fiscal 2025 results with both revenue and non-GAAP earnings per share coming in better than the consensus forecasts. Second quarter revenue was up 8.4% year-over-year (9% in constant currency), which includes Subscription & Support revenue growth of 9% (10% in constant currency). Its second quarter GAAP operating margin was 19.1%, while its non-GAAP operating margin came in at 33.7%. Non-GAAP diluted net income per share came in at $2.56 in the quarter, up from $2.12 in the same period last year. Management’s commentary was upbeat in the press release: In Q2, we delivered strong … Read more

Nvidia Beats Second Quarter Estimates

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Image: Nvidia’s shares have been on a tear the past year. By Brian Nelson, CFA On August 28, Nvidia (NVDA) reported better than expected second quarter fiscal 2025 results, but the performance wasn’t strong enough for the market to bid up shares. Revenue of $30.04 billion was nonetheless up a whopping 122% on a year-over-year basis, while quarterly non-GAAP earnings per share came in at $0.68, up 152% from the year-ago period. Its GAAP gross and operating margin was 75.1% and 62.1% in the quarter, respectively. In addition to record quarterly revenue and outsized levels of profitability, Nvidia posted record quarterly Data Center revenue, which advanced 154% in the second quarter from the same period a year ago. Second quarter … Read more

The Difference Between Speculation and Investment

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Brian Nelson, President of Investment Research at Valuentum, discusses the difference between speculation and investment.  Brian Nelson, CFA: This is Brian Nelson from Valuentum Securities. I’d like to talk about the concept of speculation. I think it is best taught with a story perhaps, one of my personal experiences. I used to work on the buy side and one of the more interesting stocks that I pitched in my experience was a company called Synaptics (SYNA). This must have been in 2004-2005 — almost 20 years ago now. Synaptics made an interface for a number of electronic devices, and what it held was some of the technological building blocks for a click-wheel technology. About a year or two later following that … Read more

Foot Locker Burns Through Cash During First Half of Full Year 2024

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Image: Foot Locker’s shares have been quite volatile the past couple years. By Brian Nelson, CFA Foot Locker (FL) recently reported second quarter results with revenue and non-GAAP earnings per share coming in ahead of consensus estimates. The company returned to top-line growth in the quarter with total sales advancing 1.9% and comparable sales up 2.6% thanks to global Foot Locker and Kids Foot Locker comp growth of 5.2%. Though its gross margin expanded 50 basis points in the quarter on a year-over-year basis, Foot Locker still put up a non-GAAP net loss of $0.05. Inventory declined 10% from the same period a year ago, however. Management had a lot to say about the quarter in the press release: The … Read more

Ralph Lauren’s Dividend Is Quite Healthy

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Image: Ralph Lauren’s shares have done quite well since the beginning of 2022. By Brian Nelson, CFA Ralph Lauren (RL) reported better than expected fiscal first quarter results recently. Net revenue increased 1% in the quarter on a reported basis and was up 3% in constant currency. Foreign currency was a 170 basis-point headwind in the period. Europe revenue increased 6% (7% in constant currency), while Asia revenue increased 4% (9% in constant currency), with China up high-single-digits on a reported basis (up low-double digits in constant currency). North America revenue fell 4% in the quarter as improved direct-to-consumer performance was offset by planned declines in wholesale. Earnings per share in the quarter increased 15%, to $2.70 on an adjusted … Read more

Toll Brothers Expects Demand to Remain Solid Into 2025

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Image: Toll Brothers stock has done quite well during the past couple years. By Brian Nelson, CFA Luxury homebuilder Toll Brothers (TOL) recently reported fiscal third quarter results with revenue and non-GAAP earnings per share coming in better than expectations. Home sales revenues advanced 2% from the same period a year ago, while pre-tax income came in at $503.6 million, down from $553 million in last year’s quarter. Fiscal third quarter earnings per diluted share was $3.60 compared with $3.73 in the same period a year ago, but it exceeded the consensus forecast of $3.31 per share. Net signed contract value was $2.41 billion in the quarter, up 11% from last year’s period, while contracted homes were also up 11% … Read more