Member Articles

Shares of Walgreens Boots Alliance Collapse

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Image: Walgreens’ shares have been under constant pressure for some time now. By Brian Nelson, CFA On June 27, Walgreens Boots Alliance (WBA) reported mixed third quarter results for fiscal 2024. Though sales increased 2.6% from the year-ago period, adjusted operating income fell 36.3% on a constant-currency basis, reflecting in part “softer U.S. retail and pharmacy performance.” Adjusted net earnings told a similar story, falling 36.6%, to $0.63 per share in the quarter, missing the consensus estimate. Management spoke of continued problems in its quarterly press release commentary: We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins. Our results and outlook reflect … Read more

General Mills’ Organic Performance Reveals Underlying Weakness

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Image Source: General Mills By Brian Nelson, CFA On June 26, General Mills (GIS) reported mixed fourth-quarter fiscal 2024 results that showed weakness on the top line, but a modest beat relative to the consensus forecast on the bottom line. Fourth-quarter net sales dropped 6% from the same period a year ago as organic growth was also down 6% “driven by the trade expense timing comparison, a reduction in retailer inventory, and a headwind in its International segment results.” Organic volume declined 6 percentage points in its North America Retail segment and 7 percentage points in its Pet segment, with both segments experiencing organic price/mix headwinds of one percentage point, too. Its North America Foodservice business did comparatively better, recording … Read more

FedEx’s Cost Initiatives Drive Strong Fiscal 2025 Guidance

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Image Source: FedEx By Brian Nelson, CFA On June 25, FedEx (FDX) reported better than expected fourth quarter results for fiscal 2024. Revenue advanced 0.9% on a year-over-year basis in the fourth quarter, while adjusted operating income expanded to $1.87 billion from $1.77 billion in the same period a year ago. Net income increased to $1.34 billion in the fiscal fourth quarter from $1.25 billion in last year’s quarter. Adjusted diluted earnings per share came in at $5.41, up from $4.94 in the same period a year ago. Management had the following to say about the quarterly performance: We made significant progress in fiscal 2024 and ended the year strong, delivering four consecutive quarters of expanding operating income and margin … Read more

Carnival Corp. Experiencing Strong Demand Trends

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Image: Carnival Corp.’s shares have bounced from its 2022 lows, but the company has yet to return to new highs, despite strong bookings demand. By Brian Nelson, CFA On June 25, Carnival Corp. (CCL) reported better-than-expected second quarter results for fiscal 2024. Total revenue advanced to $5.78 billion from $4.91 billion in the same period a year ago, while operating income expanded to $560 million from $120 million in last year’s quarter. Net income swung to a profit of $92 million from a net loss of $407 million in the second quarter of fiscal 2023. Management commentary was upbeat in the press release: We have made incredible strides in improving our commercial operations, strategically reallocating our portfolio composition and formulating … Read more

FactSet Research Reveals Softness on Top Line

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Image: FactSet’s shares have been choppy the past couple years. By Brian Nelson, CFA On June 21, FactSet Research (FDS) reported mixed third-quarter fiscal 2024 results that showed revenue increasing 4.3%, in-line with expectations, and adjusted diluted earnings per share of $4.37, up 15.3% from last year’s quarter and better than what the Street was looking for. The bottom line benefitted from higher revenues, margin expansion, as well as a reduced share count, offset in part by higher income taxes. Organic revenue grew 4.5% on a year-over-year basis, while organic Annual Subscription Value (ASV), which “represents the forward-looking revenues for the next 12 months from all subscription services,” increased 5% on a year-over-year basis, to $2.22 billion. The company’s adjusted … Read more

CarMax Dealing with Vehicle Affordability Issues

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Image: CarMax’s shares have yet to recover from prior year highs. By Brian Nelson, CFA CarMax (KMX) reported better than expected first quarter fiscal 2024 results on June 21. Net sales declined ~7.5%, modestly better than the consensus estimate, while GAAP earnings per share of $0.97 edged out what the Street was looking for. Retail used unit sales decreased 3.1% from the same period a year ago, while comparable store used unit sales fell 3.8% and wholesale units dropped 8.3% on a year-over-year basis. Gross profit per retail used unit was $2,347, roughly in line with last year’s mark. CarMax Auto Finance (CAF) income grew 7% from last year’s quarter. Management had the following to say about the quarter: I … Read more

Dividend Increases/Decreases for the Week of June 21

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Below we provide a list of firms that raised their dividends during the week ending June 21. 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                          3i Group plc (TGOPY): now $0.1936 per share semi-annual dividend, was $0.1426. Asseco Poland S.A. (ASOZY): now $0.687 per share annual dividend, was $0.633. blueharbor bank (BLHK): now $0.20 per share special dividend, was $0.10. Canadian Banc (CNDCF): now CAD 0.1393 per share monthly dividend, was CAD 0.1354. China Foods Limited (CHFHY): now $0.324 per share annual dividend, was $0.268. Darden Restaurants (DRI): now … Read more

Kroger’s Identical Store Sales Beat Consensus

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Image: Kroger’s shares have been choppy during the past couple years. By Brian Nelson, CFA On June 20, Kroger (KR) reported solid first-quarter fiscal 2024 results for the period ended May 25, 2024. Identical-store sales without fuel increased 0.5%, better than the consensus forecast, while adjusted earnings per share came in at $1.43, down from a year ago, but better than what the Street was looking for. Digital sales advanced 8%, while Delivery and Pickup combined for a double-digit increase. Adjusted FIFO operating profit was $1.499 billion in the quarter. Management had the following to say about the quarter: Kroger is off to a solid start in 2024 led by better-than-expected performance of our grocery business.   Kroger is delivering exceptional … Read more

Lennar Navigating Fluctuating Interest Rate Environment Well

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Image: Lennar has been a strong performer since the beginning of 2023. By Brian Nelson, CFA On June 17, homebuilder Lennar (LEN) reported better than expected second quarter results for fiscal 2024. Total revenues increased 9%, while diluted earnings per share leapt to $3.45 in the quarter from $3.01 in the same period a year ago. New orders jumped 19%, to 21,293 homes, while the firm’s backlog stood at 17,873 homes with a dollar value of $8.2 billion. Deliveries in the quarter increased 15%, to 19,690 homes. Its average sales price, net of incentives, per home delivered came in at $426,000 in the second quarter, while its homebuilding gross margin was up 10 basis points from last year, to 22.6%. … Read more

Adobe’s Outlook Doesn’t Disappoint

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Image: Adobe’s shares are getting back on track after it issued a strong outlook for fiscal 2024. By Brian Nelson, CFA On June 13, Adobe (ADBE) reported better than expected second quarter results for fiscal 2024. Revenue grew 10% on a year-over-year basis (11% in constant currency), while diluted earnings per share came in at $4.48 on a non-GAAP basis. Non-GAAP operating income was $2.44 billion in the quarter, while the firm exited the period with $17.86 billion in remaining performance obligations. Management had the following to say about the quarter in the press release: Adobe achieved record revenue of $5.31 billion driven by strong growth across Creative Cloud, Document Cloud and Experience Cloud. Our highly differentiated approach to AI … Read more