Today - Saturday, July 30, 2016
- Casinos in Nevada ended the fiscal year with a gaming win of $887.41M for June, up 6.8% Y/Y.
- The Las Vegas Strip rebounded from a tough month in May with a 10% gain in June, but fell just short of analysts' expectations. An unusually high hold percentage for baccarat play helped pump up the monthly revenue tally. Strip revenue is still down YTD.
- Total Nevada gaming win for the fiscal year ended June 30 was up 0.7% to $11.12B. Non-gaming revenue (not part of the monthly 'win') is an increasingly larger variable with casino earnings.
- Earlier in the week, Wynn Resorts reported sluggish growth from Vegas operations, adjusted property EBITDA +0.2% Y/Y. Higher RevPAR helped to offset a lower occupancy rate. Shares of Wynn Resorts took a tumble after the company disclosed that the number of gaming tables it was allocated for Wynn Palace in Macau was only half of what was anticipated.
- Investors will catch another penetrating look into Vegas trends when MGM Resorts (NYSE:MGM) reports Q2 earnings on August 4. The reporting period includes the 10% Strip revenue pop. Commentary from management on the impact of the new 20K-seat arena will also be key.
- Nevada Gaming Control Board full report (.pdf)
- Related stocks: CZR, CACQ, BYD, FLL, CZR
- Related ETF: BJK.
Friday, July 29, 2016
- For investors who missed gold’s climb to a two-year high in early July, it’s not too late to jump in, according to Agnico Eagle Mines (NYSE:AEM) CEO Sean Boyd, who says the rally in gold miners is just getting started.
- Boyd says AEM is ready to take advantage, laying the groundwork for expanded output through exploration, adding that it is “one of the very few companies that can see its output 30%-40% higher in five years from now from stuff we already own."
- Making the case for still-higher gold prices, Boyd says: “There’s still a tremendous amount of debt in the system. There’s an inability to create conditions for growth. You’ve got a negative-interest-rate environment, which is a great environment for gold from an opportunity-cost standpoint. And you’ve still got very strong demand coming out of China and India."
- While most gold miners continue to proceed with caution, AEM just raised its quarterly dividend to $0.10/share from $0.08 after Q2 earnings beat analyst estimates.
- Volkswagen (OTCPK:VLKAY, OTCPK:VLKAF) and the California Air Resources Board will begin testing hardware and software that could help the company avoid buying back as many as 475K diesel cars sold in the U.S. with improperly designed pollution controls, the Board chair tells Reuters.
- Air Resources Board Chair Mary Nichols says VW is making strides in its effort to regain credibility with regulators, a helpful stance as the California regulator is working with the U.S. EPA to evaluate the company's proposed fixes.
- Winning regulatory approval to repair rather than buy back diesel cars that do not comply with U.S. clean air standards would give a boost to VW's efforts to contain the financial and reputational damage caused by the diesel emissions cheating scandal.
- Whole Foods Market (WFM -0.4%) may be full of healthy stuff, but it can't trademark "world's healthiest."
- The U.S. Patent and Trademark Office rejected Whole Foods' bid for a trademark on "World's Healthiest Grocery Store," calling it "merely descriptive."
- That's the same reason the office used years ago in rejecting a previous application by Whole Foods for "America's Healthiest Grocery Store," a decision later overturned, allowing the grocer to use that mark.
- Whole Foods had applied for the new mark to update it after it expanded beyond the U.S. into Canada and the UK.
- In two days since releasing earnings, WFM is down 9.4%.
- The Pennsylvania Attorney General's office struck a deal with the trust that controls Hershey (HSY -0.7%) over its board representation.
- Four board members will exit by the end of this year and two more by the end of 2017. Limits on service and compensation for board members are now in place.
- PA Office of Attorney General press release
- Moneygram International (NASDAQ:MGI) falls 9% after setting guidance below expectations.
- The company now sees revenue growth of 7% to 9% this year vs. 8% to 10% prior view. Economic and geopolitical issues are cited as headwinds.
- The outlook for EBITDA growth is held at 9% to 11%, with "discliplined expense management" planned.
- Smart & Final Stores (SFS -11%) slides after the company posted negative same-store growth for Q2 and set guidance below expectations.
- The company sees full-year EPS of $0.58-$0.60 off a comparable store sales range of -0.5% to +0.5%.
- The roll-out of new stores had an impact during the quarter.
- CEO DAvid Hirz: "The anticipated sales cannibalization from new store development, coupled with higher than expected deflationary pressures on product pricing, have resulted in headwinds to comparable store sales during the first half of 2016, which we expect will remain challenging during the balance of the year."
- Previously: Smart & Final Stores misses by $0.01, misses on revenue (July 28)
- Allegiant Travel (ALGT -0.1%) announces it struck an agreement to purchase 12 new Airbus A320 aircraft.
- The deal is the first time the company has acquired new planes and is another step towards Allegiant's planned transition to an all Airbus fleet by 2019.
- The aircraft are expected to enter service between 2017 and 2018. This transaction brings Allegiant a total of 77 Airbus aircraft either in service or committed for future delivery.
- By the end of 2016, the company's in service Airbus fleet will number 33, consisting of 16 A320s and 17 A319s. At the end of this year, Allegiant will have a total of 85 aircraft in revenue service.
- Source: Press Release
- Ruth's Hospitality (RUTH +3.1%) reports company-owned comparable restaurant sales rose 1.5% in Q2, consisted of an average check increase of 3.7%.
- Traffic decreased 2.1% for the period.
- Total restaurant sales grew 1.7% to $87.24M.
- Franchise income decreased 2.4% to $4M.
- Average unit weekly company-owned sales increased1.1% to $101.1K.
- Food and beverage costs as a percentage of restaurant sales for the company dropped 90 bps to 29.6%, primarily driven by a 4.9% decline in total beef costs.
- Operating margin rate squeezed 120 bps to 11.3%.
- FY2016 Guidance: Food and beverage costs: 29% to 31% 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: $28.5M to $30.5M; Effective tax rate: 32% to 34%; Capital expenditure: $28M to $30M; Diluted shares outstanding: 32.5M to 33M.
- The board at SABMiller (OTCPK:SBMRY) officially throws its support behind the acquisition of the company by Anheuser-Busch InBev (BUD +2.4%). The £79B ($104.94B) offer was at the "lower end" of the company's acceptable range.
- A-B landed its last required regulatory approval earlier today in China after raising its offer for SABMiller at the beginning of the week.
- The deal brings together a large number of beer brands into the same corporate house even after key divestitures across regions. A partial list of the Megabrew assets includes Bud Light, Budweiser, Michelob, Rolling Rock, Busch, Shock Top, Natural, Goose Island, Blue Point, Four Peaks, Grolsch, Pilsner Urquell, Foster's Lager, and Castle Lager.
- Shares of MolsonCoors (NYSE:TAP) are up 3.32% with the company now set to control MillerCoors in the U.S. by itself. SABMiller stakeholder Altria (MO +1%) also perked up after the announcement.
- Aaron's (AAN +5.8%) is higher after a mixed Q2 report.
- A relief rally may be in play after guidance from the company came in level with expectations. Looking ahead, management seems to be focused on the cost side.
- "In light of the core results, we're taking steps to further address our expense structure, including a thorough review of our store base," said CEO John Robinson
- Previously: Aaron's beats by $0.02, misses on revenue (July 29)
- B&G Foods (BGS +13.8%) roars higher after Q2 results shine.
- The food company is landing huge benefits from the acquisition of Green Giant and Mama Mary's.
- Gross profit was up 77% to $110M during the reported period.
- Looking ahead, B&G Foods expects full year sales of $1.39B to $1.42B and EPS of $2.11 to $2.21. Those numbers are a raise from prior guidance as the company says it's prepping to "awaken the Green Giant."
- Previously: B&G Foods beats by $0.11, misses on revenue (July 28)
- Ford (F -0.1%) falls off the Conviction Buy List at Goldman Sachs as the investment firm warns on automobile pricing trends.
- "What makes the pricing outlook troublesome in general is that it seems every lever has been pulled to support sales at these levels," notes analyst Patrick Archambault.
- Goldman now has Ford rated at Neutral.
- The post-earnings slide in Ford puts shares down over 10% YTD.
- Shares of Deckers Outdoor (NYSE:DECK) are higher after FQ1 results came in ahead of expectations even with a sharp 7.3% drop in same-store sales. The fresh guidance issued by Deckers is helping to calm investors.
- Deckers expects FQ2 EPS of $1.12-$1.22 vs. $1.19 consensus and full-year EPS of $4.05-$4.40 vs. $4.28 consensus.
- DECK +3.97% premarket to $65.95 vs. a 52-week range of $40.74 to $73.68.
- Previously: Deckers Outdoor beats by $0.27, beats on revenue (July 28)
- Household spending by consumers increased 4.2% in Q2 to mark the best pace for the category since late in 2014.
- The strong read on consumer spending contrasts with the tightening by businesses amid Brexit fears, F/X pain, and political jitters.
- Retail ETFs trail broad stock market averages on the year after a May swoon, although most of the damage has been from the mall sector. Companies with a thriving e-commerce business and/or high mix of U.S. sales have held up.
- Despite the painful headline Q2 GPD miss today, the underlying resiliency shown by consumers could bode well for a variety of retailers such as Amazon (NASDAQ:AMZN), Target (NYSE:TGT), Wal-Mart (NYSE:WMT), Costco (NASDAQ:COST), Kroger (NYSE:KR), Lululemon (NASDAQ:LULU), Dollar General (NYSE:DG), PriceSmart (NASDAQ:PSMT), and Williams-Sonoma (NYSE:WSM) to name a few (add your own ideas in the comments).
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE, JHMS, IBUY, CNSF, CNDF, JHMC
- UPS (NYSE:UPS) reports steady revenue growth for Q2.
- Revenue growth by type: U.S. Domestic package +2.4% to $9.015B, International Package +1.1% to $3.077B, Supply Chain & Freight +13.2% to $2.537B.
- Pricing was relatively flat during the quarter. The average revenue from an U.S. domestic package fell a penny to $9.44, while the average revenue for an international package was down 2% to $16.70.
- Total operating expenses rose 3.8% to $12.591B.
- Operating profit +4% to $2.038B.
- Average daily package volume increased 2.5% to 14.929M. The Next Day Air business showed the strongest growth.
- UPS -1.63% premarket to $106.96.
- Revlon (NYSE:REV) reports revenue rose 3.5% if the impact of the currency swings is backed out in Q2.
- Consumer segment net sales grew 1.4%(+3.9% on a constant currency basis) to $359.5M primarily driven by higher net sales of Revlon color cosmetics, SinfulColors color cosmetics, Mitchum anti-perspirant deodorants, and Cutex nail products.
- Professional segment net sales fell 0.1%(+0.6% on a constant currency basis) to $123.3M primarily due to higher net sales of Revlon Professional hair products and American Crew men’s grooming products throughout our international territories.
- Gross margin rate decreased 170 bps to 64.9%.
- SG&A expense rate down 80 bps to 53%.
- Adjusted EBITDA fell 1.1% to $89.1M.
- Operating margin rate declined 190 bps to 10.7%.
- Shares of Columbia Sportwear (NASDAQ:COLM) are on watch after Q2 revenue fell slightly short.
- The company managed to improve its gross margin rate during the quarter with selective price increases.
- The company backed prior guidance for full-year EPS of $2.60 to $2.70.
- COLM is inactive in the premarket session after falling about 2.5% in after-hours trading yesterday.
- Previously: Columbia Sportswear beats by $0.05, misses on revenue (July 28)
- Mercedes-Benz (OTCPK:DDAIF) pulled advertising extolling the self-driving features of its new E-class models in the U.S., observes Automotive News.
- The action follows a dive by Consumer Reports into how the automaker was presenting the automated features to consumers.
- Execs with Mercedes conceded that they want to avoid confusion on the Drive Pilot system.
- Bloomin' Brands (NASDAQ:BLMN) reports U.S. comparable restaurant sales fell 2.3% in Q2.
- Comp for Outback Steakhouse in Brazil grew 3.9%.
- Segment revenue: U.S.: $958.98M (-2.4%); International: $119.61M (+2.6%).
- Adjusted restaurant-level operating margin rate down 70 bps to 15.5% primarily due to higher labor expense, unfavorable product mix and higher commodity costs.
- U.S. adjusted restaurant-level operating margin rate declined 40 bps to 15.5%.
- International adjusted restaurant-level operating margin rate slipped 70 bps to 16.9%.
- The company added 6 new restaurants during the quarter.
- Total number of restaurants -2 Q/Q to 1,500.
- FY2016 Guidance: U.S.comparable restaurant sales: flat; GAAP operating income margin: decrease; Adjusted operating income margin: flat; Tax rate: 30% to 31%; Adjusted Tax rate: 25% to 26%; GAAP diluted EPS; At least $0.75; Adjusted diluted EPS : At least $1.35; Number of new system-wide restaurants: 40 to 50; Capex: $235M to $255M.
7:36 AM| 7:36 AM | 2 Comments
- Xerox (NYSE:XRX) reports revenue fell 4% on a constant currency basis in Q2.
- Services revenue declined 2% to $2.47B (-1% in constant currency).
- Document technology revenue decreased 7% to $1.75B (-6% in constant currency).
- Equipment sales dropped 6% to $675M (-5% in constant currency).
- Annuity revenue squeezed 4% to $3.71B (-3% in constant currency).
- Adjusted gross margin rate increased 20 bps to 31.4%.
- Adjusted SG&A expense rate improved 30 bps 19.3%.
- Operating margin rate expanded 80 bps to 9.3%.
- Q3 Guidance: Diluted EPS: $0.14 to $0.16; Adjusted EPS: $0.26 to $0.28.
- FY2016 Guidance: Diluted EPS: $0.45 to $0.55; Adjusted EPS: $1.10 to $1.20; Cash flow from operations: $950M to $1.2B; Free cash flow: $600M to $850M.
- Newell Rubbermaid (NYSE:NWL) reports core sales growth of 5% in Q2.
- Segment revenue growth: Writing: $547.4M (+15.8%, Core sales: +11.3%); Home Solutions: $433.5M (-1.1%, Core sales: +1.7%); Tools: $197.4M (-3.8%, Core sales: -2.3%); Commercial Products: $194M (-7.9%, Core sales: -1.4%); Baby & Parenting: $236.9M (+12.4%, Core sales: +11.1%); Branded Consumables: $777.3M; Consumer Solutions: $406.6M; Outdoor Solutions: $953.4M; Process Solutions: $85.1M.
- Normalized gross margin squeezed 280 bps to 37.2%.
- Normalized operating margin rate fell 20 bps to 15.8%.
- FY2016 Guidance: Core sales: +3% to +4%; Normalized EPS: $2.75 to $2.90; Weighted average diluted share count: ~430M; Tax rate: 29% to 30%.
- Tyco (NYSE:TYC) reports organic revenue growth of 1.5% in FQ3.
- Acquisition contributed 3 percentage point of growth in the quarter.
- Foreign currencies negatively impacted revenue by 3%.
- Segment revenue: North America Installation & Services: $1B (+3%); Rest of World Installation & Services: $794M (-6%); Global Products: $651M (-4%).
- SG&A expense rate rose 210 bps to 27.2%.
- Segment operating income: North America Installation & Services: $148M (-150 bps to 14.7%); Rest of World Installation & Services: $92M (+60 bps to 11.6%); Global Products: $115M (+10 bps to 17.7%).
- Adjusted operating margin rate dropped 30 bps to 14.5%.
- Audi (OTCPK:VLKAY) is likely to miss profit targets this year after reporting a 18% drop in first-half operating profit to €2.4B ($2.66B). Operating margin was 8% for the period.
- The luxury brand is battling through the effects of the Takata airbag recall and diesel emissions cheating scandal.
- Audi sees its full-year profit margin falling slightly below the 8% to 10% goal.
- Anheuser-Busch InBev (NYSE:BUD) is due to disclose Q2 earnings this morning.
- Analysts expect the beer giant to report revenue of $10.82B and EPS of $1.09. The beer giant's results in Mexico (positive F/X) and Brazil (pre-Olympics buildup) could help prop up sluggish sales in the U.S.
- Though analysts expect limited commentary from AB InBev executives on the MegaBrew deal, investors will be searching for hints of forward motion. Investors are waiting for the SABMiller board to weigh in on the new takeover offer and for China to complete its regulatory review.
Thursday, July 28, 2016
- Regulators in Europe are taking a hard look at the rights of consumers playing Pokemon Go. Concerns over the terms and conditions from developer Niantic and the real-time access to GPS data are in the spotlight in France, Germany, and the U.K.
- The controversy adds another variable to the debate on the financial impact of the Pokemon sensation on Nintendo (OTCPK:NTDOY).
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