Friday, February 12, 2016
- In the biggest normalization development to date, U.S. officials will head to Havana Tuesday to sign a deal restarting scheduled commercial air traffic between Cuba and the United States for the first time in more than 50 years.
- The move will formalize an agreement on terms the two countries came to in December. Scheduled air traffic to Cuba from the U.S. ceased shortly after Cuba's revolution in 1959.
- Airlines will have 15 days to bid on routes for dozens of flights per day. But the deal allows for just 20 round trips per day overall between the U.S. and Havana, scarcity that could drive up bids substantially. Nine other international airports in Cuba can get 10 daily round trips.
- The Transportation Dept. will spend about a month collecting information and make a final determination on routes in the summer.
- U.S. air: DAL +0.7%, LUV +2.6%, JBLU +3.7%, UAL +2.9%, AAL +3.6%, VA +2.2%.
- Hi-fi headphones maker Koss Corp. (KOSS -3.5%) has settled litigation between it and American Express that was pending in an Arizona court.
- All claims were released in the settlement, and Koss will receive $3M gross (to be offset by some attorneys' fees).
- Shares in Koss have fallen 23% over the past six months.
- Primark (OTCPK:ASBFF, OTCPK:ASBFY) plans to open six stores in the U.S. this year.
- The Irish clothing retailer will focus on the Northeast in this phase of its expansion.
- Primark saw a bump in sales in the last nine weeks of 2015 after hitting a rough patch due to the late start to the cold weather season in Europe.
- USA Technologies (USAT +13%) is near a 52-week high of $3.71 after posting an FQ2 beat. The mobile payments/telemetry services firm is once more reiterating FY16 (ends June '16) guidance for revenue of $69M-$71M and 75K+ net new connection adds; the FY16 revenue consensus is at $71.5M.
- Metrics: 20K net new connections were added in FQ2 vs. 16K in FQ1 and 12K a year ago, bringing the total base to 369K. 350 new customers were added vs. 675 in FQ1 and 550 a year ago, increasing the base to 10,625. Transaction volume rose 9% Q/Q and 22% Y/Y to $138M.
- Financials: Free cash flow improved to $507K from $362K in FQ1 and -$3M a year ago. License/transaction fee revenue rose 30% Y/Y to $13.7M, and equipment sales 106% to $4.8M; gross margins for both businesses rose. GAAP operating expenses rose 31% Y/Y to $9.8M. USAT ended 2015 with $14.8M in cash, $7M in credit line debt, and $2.1M in long-term debt.
- USA Technologies' FQ2 results, earnings release
- Last month: USAT buys assets of vending payment tech firm for $5.6M
- Kohl's (KSS +2.2%) eliminated three top positions as part of a reorganization.
- The company removed the positions of Chief Digital Officer, senior VP of store environment/development, and senior VP of communications/PR.
- The tightening comes amid dissatisfaction from activist shareholders on the performance of Kohl's.
- L Brands (LB -3.8%) announces that CEO Les Wexner will take over the leadership of Victoria's Secret following the departure of Sharen Turney.
- Turney took over the top position at VS in 2006 and put in 16 years at the company.
- Victoria's Secret is coming off a year where comps rose 6% to outpace the broad retail sector.
- L Brands is due to report earnings on February 24.
- Party City (NYSE:PRTY) is up 7.1% as its moves off its post-IPO low set yesterday.
- Shares of Party City are still down about 50% from where the IPO was priced last April. They trade at roughly 7X 2016 earnings estimates.
- Previously: A funny thing happened on the way to the recession (Feb. 12)
- Jarden (JAH +1.3%) expects to report 2015 revenue of $8.6B off of organic revenue on the high end of its 3% to 5% range. An EPS beat is also anticipated for Q4 by Jarden.
- Forward View Consulting adjusts its estimates on Q1 of 2016 after digesting the 8-K fiing. Revenue of $2.0745B is seen and EPS of $0.16 vs. $0.13 consensus.
- Jarden is due to report on February 17.
- SEC Form 8-K
- Hasbro's (HAS -0.4%) iconic Play-Doh property turns 60 today, but the brand isn't necessarily showing its age.
- Play-Doh contributed the greatest revenue growth in the company's preschool category during Q4, outpacing Jurassic World and Star Wars. Overall, sales in the preschool category were up 17% in constant currency during the quarter.
- Buffalo Wild Wings (NASDAQ:BWLD) is on watch after two more norovirus cases were linked to a restaurant in Overland Park, Kansas.
- The number of confirmed cases from the incident late in January now stands at three.
- Shares of BWLD took a tumble when the sickness reports first start piling in. Some analysts think the stock will recover a bit when the investigation is concluded.
- Black Box Intelligence reports same-store restaurant sales fell 0.8% in January.
- A broad slow-moving winter storm during the third week of January cut into sales by 10% for the industry.
- Same-store traffic was down 3.2% during the month, while average guest check was 2.4% higher.
- Consumer spending in the U.S. showed some strength in January to defy some of the signals being sent by equity markets.
- "The markets may have decided that the U.S. is headed for recession, but obviously no one told U.S. consumers," said econimist Paul Ashworth.
- Though data shows consumers have pulled back on some big-ticket categories to save more, there's some pockets of retail that could surprise this year - especially if gas prices move closer to $1/gallon.
- Companies that consumers interface with daily or weekly are more likely to benefit than those in the luxury discretionary space where falling 401K or profit-sharing plan values weigh a bit heavy on demand (home improvement, jewelry, high-end auto, etc), note analysts.
- Potentially sitting in that sweet space: Ross Stores (NASDAQ:ROST), TJX Companies (NYSE:TJX), Ulta Salon (NASDAQ:ULTA), Columbia Sportswear (NASDAQ:COLM), Skechers (NYSE:SKX), Nike (NYSE:NKE), Foot Locker (NYSE:FL), Dollar General (NYSE:DG), Target (NYSE:TGT), Party City (NYSE:PRTY), Churchill Downs (NASDAQ:CHDN), Isle of Capri (NASDAQ:ISLE), Penn National Gaming (NASDAQ:PENN), Boyd Gaming (NYSE:BYD), Casey's General Stores (NASDAQ:CASY), McDonald's (NYSE:MCD), Cracker Barrel (NASDAQ:CBRL)... add your own in the comments.
- Macau casino stocks are showing strong gains after results of Wynn Resorts (WYNN +10.5%) came in better than expected.
- Popping out of the report was a solid win rate and stabilizing mass market trend in Macau. During the earnings call, Steve Wynn confirmed reports that the Chinese New Year period is off to a solid start.
- Previously: Wynn Resorts revenue read: Macau -27%, Vegas +4% (Feb. 11 2016)
- Wynn Resorts earnings call webcast
- Macau movers include Melco Crown (MPEL +5.2%), Las Vegas Sands (LVS +5.6%), and MGM Resorts (MGM +5%).
- Volkswagen (OTCPK:VLKAY) announces that deliveries increased by 3.7% in January to 847.8K vehicles.
- Deliveries by market: Europe +1.8% to 292.6K, North America -3.4% to 61.1K, South America -32.2% to 36,500, Asia-Pacific +12% to 427.1K (China +14%).
- Deliveries by brand: Audi +4% to 143.2K, Volkswagen +3% to 521.5K, Skoda +5% to 91.6K, Porsche +24% to 19.9K.
- Stifel Nicolaus sets its sights on the grocery store sector after yesterday's dramatic report of Kroger's (NYSE:KR) interest in a buyout of The Fresh Market (NASDAQ:TFM).
- The investment firm gives Kroger a Buy rating and $45 price target after digesting the consolidation potential. Kroger's M&A spree over the last few years already includes Roundy's, Vitacost, and Harris Teeter - although management has been credited with successful integration strategies.
- Investors have been rewarded from Kroger's growth push with shares of the grocery store chain outperforming the S&P 500 Index by a wide margin (+215% vs. +36% over 5 years).
- Sprouts Farmers Market (NASDAQ:SFM) is also given a Buy rating from Stifel and assigned a PT of $27.
- Previously: The Fresh Market closes +22% on buyout spike, more room to run? (Feb. 11 2016)
- SFM +2.1% premarket to $22.55 vs. a 52-week range of $16.41 to $38.45.
- TFM +1.81% premarket to $23.09 vs. a 52-week range of $17.81 to $42.09.
- WFM +1.90% premarket to $29.48 vs. a 52-week range of $28.07 to $57.57.
- KR +1.95% premarket to $37.14 vs. a 52-week range of $27.32 to $42.75.
- FBR Capital takes its price target on Netflix (NASDAQ:NFLX) down to $100 from $125 as it reassesses the risk premium on the stock.
- The investment firm points to the reality that the U.S. market could reach a saturation point and notes execution misfires on the global side could impact growth.
- The PT from FBR still reps a brisk rally for NFLX shares which are up 0.87% premarket to $87.10.
- Sizzling earnings from Columbia Sportswear (NASDAQ:COLM) caught analysts off-guard as the Columbia and Sorel brands both showed broad strength.
- The company overcame the late start to the cold weather season in the U.S. and F/X challenges to improve net income by 14% Y/Y to just over $63M.
- Gross profit rate fell 10 bps to 45.3%.
- Previously: Columbia Sportswear beats by $0.14, beats on revenue (Feb. 11 2016)
- COLM +10.33% premarket to $52.89.
- Red Robin Gourmet Burgers (NASDAQ:RRGB) reports comparable restaurant revenue decreased 2% in Q4.
- System-wide restaurant revenue grew 1.2% to $352.1M.
- Guest count dropped 4.6%.
- Average guest check increased 2.6% Y/Y.
- Restaurant level operating margin rate improved 60 bps to 21.9% due to 180 bps decrease in cost of sales.
- Selling expense rate down 60 bps to 2.8%.
- Adjusted EBITDA +12.4% to $34.98M.
- FY2016 Guidance: Total revenue: 8.5% to 9.5%; Comparable restaurant revenue growth: in the low single digits; EBITDA: $155M to %165M; Capital expenditure: $150M to $155M; D&A: $82M to $84M; Interest expense: ~$5M; Tax rate: ~25.5%; Diluted EPS: $0.34.
- RRGB +4.65% premarket.
- Retail sales came in stronger than expected in January and were revised higher for the key month of December.
- A few standpoint categories for January included food services (+6% Y/Y), building material/garden equipment stores (+5%), and nonstore retailers (+9% Y/Y).
- A notable laggard in the retail sales print was the department stores category (KSS, JWN, M, JCP, SHLD). Sales were down 0.8% M/M and 3.8% Y/Y during January.
- Full Retail Sales report (.pdf)
- Related ETFs: XLY, XRT, VCR, RETL, RTH, IYK, FXD, FDIS, RCD, PMR, UGE, SZK, BITE
- Shares of Nu Skin (NYSE:NUS) are down sharply in early trading after Q4 results came up short.
- Sales in Greater China fell 8% to $195.5M (-5% constant currency), North Asia sales were down 7%.
- The real crusher: The company lowered 2016 revenue guidance to $2.10B-$2.15B vs. $2.29B-$2.33B and $2.32B consensus.
- Previously: Nu Skin misses by $0.11, misses on revenue (Feb. 11 2016)
- NUS -23.19% premarket to $23.95.
- Ruth's Hospitality (NASDAQ:RUTH) reports company-owned comparable restaurant sales rose 3.2% in Q4.
- Total restaurant sales grew 6.1% to $98.79M.
- Franchise income increased 3.5% to $4.56M.
- Average unit weekly company-owned sales expanded 2.6% to $114.2K.
- Food and beverage costs as a percentage of restaurant sales for the company decreased 129 bps to 30.5%.
- Operating margin rate improved 37 bps to 12.4%.
- FY2016 Guidance: COGS: 29.5% to 31.5% of restaurant sales; Restaurant operating expenses: 47% to 49% of restaurant sales; Marketing and advertising costs: 2.9% to 3.1% of total revenues; G&A expenses: $29M to $31M; Effective tax rate: 32% to 34%; Capital expenditure: $28M to $30M; Diluted shares outstanding: 33.8M to 34.5M.
7:12 AM| 7:12 AM | 16 Comments
- A number of analysts lowered their price targets for Activision Blizzard (NASDAQ:ATVI) following yesterday's earnings miss.
- Mizuho lowers 12-PT to $35 from $42.
- Atlantic Equities lowers PT to $40 from $45.
- Piper lowers PT to $39 from $42.
- Barclays lowers PT to a Street low of $32 from $40. Street high is Wedbush at $47.
- Pacific Crest lowers PT fo $36 from $41.
- Macquarie lowers PT to $33 from $36.
- Shares fell 14% in after-hours trading to $26.25, a level not seen since August.
- Note: Activision Blizzard CEO Robert A. Kotick on Q4 2015 Results - Earnings Call Transcript (Feb. 11)
Thursday, February 11, 2016
- Select Comfort (NASDAQ:SCSS) plummets after disclosing it suffered a financial impact from the transition to an enterprise platform from legacy systems.
- "Many of our customers endured delays and delivery reschedules as we ramped up the new system. These results are not acceptable to us," said CEO Shelly Ibach.
- The company expects full-year EPS of $1.25 to $1.45 vs. $1.57 consensus.
- Previously: Select Comfort EPS of -$0.42 (Feb. 11)
- SCSS -16.53% AH to $17.10.
- Wynn Resorts (NASDAQ:WYNN) reports revenue from Macau operations fell 27% Y/Y to in Q4. EBITDA from the Macau business was $709M, down 44%.
- The company's Las Vegas operations kicked in with revenue growth of 3.8% and churned out EBITDA of $477M. Though the occupancy rate in Vegas was down a full point, RevPAR (Revenue per available room) improved 6.8% to $237.
- The company disclosed its investment in the Macau Cotai project is up to $3.5B.
- Wynn ended the quarter with a cash position of $2.3B and debt of $9.1B.
- Previously: Wynn Resorts beats by $0.27, misses on revenue (Feb. 11)
- WYNN +1.52% AH to $60.60 after a 2.7% gain in the regular session.
- Shares of The Fresh Market (NASDAQ:TFM) accelerated into the close to end the day with a tidy 22% gain with Kroger reportedly bidding for the chain.
- Morgan Stanley thinks there could be some upside left as the bidding and strategic actions plays out, calling out a $30 deal price in a fresh note.
- Kroger (NYSE:KR) ended the day down a mild 1.1%, with some traders uneasy over the potential M&A play. If Kroger does win the bidding for TFM, it plugs a nice gap the grocery store operator has in the Northeast.
- Kroger's supermarket map (via Dow Jones' Kevin Kingsbury)
- Previously: Reuters: Kroger seek buyout of The Fresh Market (Feb. 11)
- Previously: Grocery store stocks buzzing off of consolidation talk (Feb. 11)
- Previously: The Fresh Market +13% with Kroger and others in bidding process (Feb. 11)
- Revenue at MGM Resorts' (MGM -1.6%) Detroit-area casino increased 1.1% to $46.718M in January, according to a release from the Michigan Gaming Board.
- The MGM Grand Detroit was the only casino in the region to register a gain for the month.
- MGM Grand Detroit's market share rose to 43%.
- Michigan Gaming Control Board data (.pdf)
- Southwest Airlines (LUV -0.5%) is being given the opportunity to grab landing slots at Long Beach Airport, according to Los Angeles Times.
- The carrier can start with four slots before adding more in the future.
- Though small by comparison to LAX, Long Beach offers some competitive advantages for Southwest.
- The Fresh Market (NASDAQ:TFM) breaks away from a trading halt to soar 13.40% to $21.07 in reaction to a report of a Kroger (KR -1.3%) acquisition play. It's been three weeks since TFM was over the $20 mark.
- The report from Reuters indicates bidding from PE firms and other companies is already in the second round.
- The breadth of interest is helping push up shares of Sprouts Farmers Market, Whole Foods Market, and Ingles Markets as well.
- The grocery store sector is buzzing off a report from Reuters indicating Kroger wants to buy out The Fresh Market.
- Sprouts Farmers Market (SFM +0.7%), Whole Foods Market (WFM +0.2%), Natural Grocers by Vitamin Cottage (NGVC +1.9%), and Ingle Markets (IMKTA +0.2%) have all spiked higher since the story broke.
- Previously: Reuters: Kroger seek buyout of The Fresh Market (Feb. 11)
- Movie theater stocks are bucking a weak market day to trend higher.
- The U.S. box office ended 2015 up 4.1% from the previous year to tally $11.126B. The average ticket price in the U.S. was $8.43 and concession spending per patron was up over 5%.
- Notable gainers: AMC Entertainment (NYSE:AMC) +1.3%, Carmike Cinemas (NASDAQ:CKEC) +1.1%, Cinemark Holdings (NYSE:CNK) +1.0%, Regal Entertainment (NYSE:RGC) +1.2%, Marcus Corp (NYSE:MCS) +1.9%.
- Netflix (NFLX -3.7%) completed its migration to the cloud, according to a new corporate blog post. Most of the company's systems, and all of its customer-facing platforms, have been on the cloud since last year.
- The company uses Amazon Web Services as its cloud provider.
- Netflix says it's ahead of schedule on hitting the uptime target of "four nines." Four nines or 99.99% uptime works out to a loss of only 52.56 minutes of service a year or less than nine seconds a day.
- Molson Coors (TAP -0.3%) was stung by lower volume for MillerCoors brands (Blue Moon, Coors, Foster's, Keystone, Miller) during Q4. The weakness at MillerCoors is also a short-term concern for JV partner SABMiller (OTCPK:SBMRY).
- Analysis: Susquehanna notes SG&A spending looked high for Molson during the quarter and value brands didn't perform well. The investment firm has a Positive rating on the beer stock with a price target of $125, although it cites downside risk to $65 if the JV buyout fails. TAP trades right around $84 this afternoon.
- During the earnings conference call, Molson execs gave analysts the silent treatment on acquisition news.
- Previously: Molson Coors Brewing misses by $0.01, revenue in-line (Feb. 11)
- Manchester United (MANU +6.7%) is sharply higher after posting solid earnings and raising its view on full-year profit.
- The company expects EBITDA of £178M-£188M in 2016, compared to prior guidance for £165M-£175M.
- The soccer club is currently in 5th place in the English Premier League. A 4th place finish in May ensures the lucrative inclusion in the Champions League next season.
- Previously: Manchester United beats by 5.67p, beats on revenue (Feb. 11 2016)
- There's some nervous trading on stocks associated with consumers spending money on their houses. Today's macroeconomic news and stock market decline are cutting into confidence over consumer spending patterns.
- Pier 1 Imports (PIR -7.9%), Mattress Firm (MFRM -3.1%), Tile Shop (TTS -2.9%), Lumber Liquidators (LL -5.8%), Restoration Hardware (RH -3.6%), Bed Bath & Beyond (BBBY -2.5%), La-Z-Boy (LZB -3%), Kirkland's (KIRK -2.3%), and Williams-Sonoma (WSM -2.5%) are all lower than broad market averages.
- Lowe's (LOW -1.5%) and Home Depot (HD -1.2%) are showing a milder loss.
11:25 AM| 11:25 AM
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