Member Articles

In the News: CRM, FL, DG, BBY

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Image Source: Mike Mozart By Brian Nelson, CFA Salesforce Issues Weaker-Than-Expected Outlook On May 29, Salesforce (CRM) reported mixed first quarter results with revenue missing the consensus estimate, and it issued lackluster guidance that sent shares tumbling following the report. In the quarter, revenue advanced 11% in constant currency and its first-quarter non-GAAP operating margin came in at 32.1%. Its current remaining performance obligation was $26.4 billion, up 10% in constant currency. Operating cash flow and free cash flow were up nicely in the quarter, to the tune of 39% year-over-year and 43% year-over-year, respectively. However, the rosy cash-flow performance was overshadowed by the company’s second quarter sales outlook that came in lower than the consensus forecast. Even though Salesforce … Read more

Dick’s Sporting Goods Puts Up Strong First Quarter, Raises Guidance

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Image: Dick’s Sporting Goods’ guidance pleased investors. Image Source: Dick’s Sporting Goods. By Brian Nelson, CFA On May 29, Dick’s Sporting Goods (DKS) reported excellent first quarter results that beat expectations on both the top and bottom lines. Net sales in the quarter advanced 6.2% on a year-over-year basis, while the company put up 5.2% in comparable store sales expansion (well above consensus expectations). Dick’s Sporting Goods delivered strong profitability in the quarter with a double-digit EBT (income before taxes) margin of 11.3%, as well as reported earnings per share of $3.30 on 4% EBT growth (above the Street forecast). The executive team was upbeat with their commentary in the press release: Our strong first quarter results continue to prove … Read more

NextEra Energy Expects 10% Annual Dividend Growth Through 2026

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Image Source: NextEra Energy By Brian Nelson, CFA Back on April 23, NextEra Energy (NEE) reported mixed first quarter results with non-GAAP earnings per share beating expectations, but revenue coming in light versus the consensus forecast at the time. Net income attributable to NextEra Energy on an adjusted basis came in at $0.91 per share, which was up modestly from $0.84 per share in the year-ago period. Management had a lot to say about the quarter and outlook: NextEra Energy delivered strong first-quarter results, growing adjusted earnings per share by approximately 8.3% year-over-year. Both FPL and NextEra Energy Resources delivered solid financial and operating performances to start off the year. FPL placed into service 1,640 megawatts of new, cost-effective solar, … Read more

Accenture Facing Revenue Growth Pressures But Stock Is Worth a Look

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Image: Accenture is facing revenue growth pressure, but the company’s financials remain resilient. By Brian Nelson, CFA Back on March 21, Accenture (ACN) reported mixed second quarter fiscal 2024 results, with revenue missing top-line expectations and non-GAAP earnings per share beating the consensus forecast. “Accenture is a leading global professional services company that helps the world’s leading businesses, governments and other organizations build their digital core, optimize their operations, accelerate revenue growth and enhance citizen services—creating tangible value at speed and scale (Form 10-K).” During the second quarter, Accenture’s revenues were roughly flat in U.S. dollars and local currency compared to the same period a year ago. Adjusted operating income came in at $2.16 billion, which was down from the … Read more

Nvidia Remains a Free Cash Flow Generating Powerhouse

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Image: Nvidia’s first-quarter fiscal 2025 results delivered, and the company remains a Wall Street darling of a stock. By Brian Nelson, CFA All eyes were on Nvidia’s (NVDA) first quarter fiscal 2025 results after the close May 22. The company put up record quarterly revenue of $26 billion in the quarter, which beat the consensus forecast, up 262% from the same period a year-ago. The company’s Data Center revenue came in at $22.6 billion, which also came in better than expectations, up 427% from last year’s quarter. The results were good enough to propel Nvidia’s shares higher following the quarterly report. Founder and CEO Jensen Huang had the following to say about the company’s bright prospects: The next industrial revolution … Read more

TJX Reports Strong First Quarter Results; Raises Fiscal 2025 Guidance

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By Brian Nelson, CFA On May 22, TJX Companies (TJX) reported strong first quarter results and increased its outlook for fiscal 2025. Net sales for the quarter ended May 4, 2024, advanced ~6% from the same period a year ago thanks in part to consolidated same store sales that increased ~3% due to strength in customer transactions. Diluted earnings per share came in at $0.93 versus $0.76 in the same period of fiscal 2024. The off-price apparel and home fashions retailer continues to deliver for consumers and investors alike. We like the company. Management spoke positively about the quarter and the current momentum it continues to experience: I am very pleased with our first quarter performance. Overall comp store sales … Read more

Target’s First Quarter Results Weren’t as Good as Walmart’s

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By Brian Nelson, CFA  On May 22, Target (TGT) reported mixed first quarter results that showed in-line revenue performance but a modest miss on the bottom line relative to the consensus forecast. Target’s results were not as good as Walmart’s (WMT) as Target’s first-quarter comparable sales fell 3.7%, while Walmart’s total U.S. comps showed a nice advance during its first quarter. Target’s adjusted earnings per share in the quarter of $2.03 showed a modest decline from the $2.05 mark it achieved in the same quarter of 2023. Nonetheless, Target CEO Brian Cornell was optimistic in his comments in the press release: Our first quarter financial performance was in line with our expectations on both the top and bottom line, tracking … Read more

Lowe’s First Quarter Results Come in Better Than Feared

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By Brian Nelson, CFA On May 21, Lowe’s (LOW) reported better-than-expected first quarter results for the period ended May 3, 2024, that showed a revenue decline of ~4.4%, but not one that was as great as feared. Comparable store sales fell 4.1% in the quarter, but this performance also came in better than the consensus forecast that expected a ~5.6% decline. Diluted earnings per share came in at $3.06 in the quarter versus adjusted diluted earnings per share of $3.67 last year. Management commentary was upbeat in the press release: We are pleased with our start to spring, driven by strong execution and enhanced customer service. This quarter we rolled out our new DIY loyalty program nationally, expanded same-day delivery … Read more

Walmart Winning Business as Consumers Remain Cost Conscious

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Image Source: Walmart By Brian Nelson, CFA On May 16, Walmart (WMT) reported better than expected first quarter results for its fiscal 2025. Strength was evident across the board. Consolidated revenue increased 6% (5.8% in constant currency), while its consolidated gross margin increased 42 basis points. Walmart U.S. comp sales increased 3.8%, while total U.S. comps, excluding fuel, came in at 3.9% in the period. The big box giant’s consolidated operating income increased 9.6% in the quarter, while adjusted operating income advanced 13.7%. Global e-commerce and its advertising business fared well, too, with sales increasing 21% and 24%, respectively, in the quarter. Adjusted earnings per share of $0.60 beat consensus, and management noted that inventory levels, which dropped in the … Read more

Cisco Still Looks Cheap, Shares Yield ~3.2%

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Image Source: Cisco By Brian Nelson, CFA On May 15, Cisco Systems (CSCO) reported better than feared third quarter results for its fiscal 2024. Revenue faced pressure, falling 13% on a year-over-year basis, as management noted that customers continue to implement “products on-hand.” Non-GAAP earnings per share of $0.88 beat consensus. Management spoke of a dynamic market environment, while mentioning some stabilization of demand: We delivered a solid Q3 performance in what remains a dynamic environment. Our unique ability to bring together networking, security, observability, and data enables Cisco to offer our customers unrivaled digital resilience for the AI era. Revenue, gross margin and non-GAAP EPS in Q3 were at the high end or above our guidance range, both including … Read more