Consumer Discretionary

Lululemon Athletica’s Global Creative Director Cheung to Take Over Responsibility of Chief Product Officer; Shares Fall After Hours

/ / Consumer Discretionary /

Lululemon Athletica (LULU) said late on Tuesday that Jonathan Cheung, Global Creative Director, will drive its product design and innovation roadmap while continuing to oversee design, innovation, and product development following the departure of Sun Choe, its chief product officer. The move comes into effect immediately. The company does not intend to replace the role of chief product officer. Cheung will report to Calvin McDonald, the company’s chief executive officer. Choe resigned and will leave the company later this month to “pursue another opportunity,” Lululemon said. “Cheung has a successful track record with more than 30 years of experience in senior creative leadership roles at global brands,” the company added. lululemon also plans to create a new team, comprising heads of its merchandising and brand functions, to scale its global and regional strategies. Shares of the company dropped 2.5% in after-hours activity.

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Lululemon’s Organizational Tweaks Seen Signaling Issues

/ / Consumer Discretionary /

The restructuring of Lululemon Athletica’s product and brand teams is not seen as a good sign by Jefferies analysts. They say in a research note that their store checks suggest that Lululemon’s product assortment is “falling flat,” with plenty of supply across colors and product lines. The analysts say they believe the organizational adjustments could signal potential weaker top-line results in future quarters. They argue the company’s business has peaked, and see rising competition as a concern. Shares fall 2.6% to $314.50 after hours.

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Lowe’s Companies Earnings, Revenue Fall in Fiscal Q1; Offers Full Year Outlook

/ / Consumer Discretionary /

Lowe’s Companies (LOW) reported fiscal Q1 diluted earnings Tuesday of $3.06 per share, down from $3.77 a year earlier. Analysts polled by Capital IQ expected $2.96. Total sales for the quarter ended May 3 was $21.36 billion, down from $22.35 billion a year earlier. Analysts surveyed by Capital IQ expected $21.1 billion. The company said it expects full-year 2024 diluted earnings of $12.00 to $12.30. Analysts surveyed by Capital IQ expect $12.15. The company expects total sales for 2024 of $84 billion to $85 billion. Analysts polled by Capital IQ expect $84.41 billion.

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Lowe’s Fiscal First-Quarter Results Top Street Views Despite DIY Spending Decline

/ / Consumer Discretionary /

Lowe’s (LOW) on Tuesday recorded better-than-expected fiscal first-quarter results, even as consumers cut back on big-budget spending on home improvement projects. The retailer’s earnings came in at $3.06 per share for the quarter ended May 3, down from $3.77 the year before, but topped the Capital IQ-polled consensus of $2.96. Sales slipped to $21.36 billion from $22.35 billion, but were ahead of the Street’s view for $21.1 billion. Shares rose nearly 3% in premarket activity. Comparable sales decreased 4.1%, compared with the 5.7% drop modeled by analysts, as positive pro and online same-store sales partially offset the decline in do-it-yourself big ticket discretionary spending, according to Lowe’s. “We are pleased with our start to spring, driven by strong execution and enhanced customer service,” Chief Executive Marvin Ellison said in a statement. “We think the company got off to a tough start, but our data indicated that sales trends accelerated towards

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LOWE’S REPORTS FIRST QUARTER 2024 SALES AND EARNINGS RESULTS

/ / Consumer Discretionary /

LOWE’S REPORTS FIRST QUARTER 2024 SALES AND EARNINGS RESULTS PR Newswire MOORESVILLE, N.C., May 21, 2024 — Comparable Sales Decreased 4.1%; Diluted EPS of $3.06 — — Affirms Full Year 2024 Outlook — MOORESVILLE, N.C., May 21, 2024 /PRNewswire/ — Lowe’s Companies, Inc. (NYSE: LOW) today reported net earnings of $1.8 billion and diluted earnings per share (EPS) of $3.06 for the quarter ended May 3, 2024, compared to diluted EPS of $3.77 in the first quarter of 2023, which included a gain associated with the 2022 sale of the Canadian retail business. Excluding this gain, first quarter 2023 adjusted diluted EPS(1) was $3.67. Total sales for the quarter were $21.4 billion, compared to $22.3 billion in the prior-year quarter. Comparable sales for the quarter decreased 4.1% as the decline in DIY big ticket discretionary spending was partially offset by positive comparable sales in Pro and online. “We are pleased

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Lowe’s Companies Q1 2024 GAAP EPS $3.06 Beats $2.94 Estimate, Sales $21.364B Beat $21.123B Estimate

/ / Consumer Discretionary /

Lowe’s Companies (NYSE:LOW) reported quarterly earnings of $3.06 per share which beat the analyst consensus estimate of $2.94 by 4.08 percent. The company reported quarterly sales of $21.364 billion which beat the analyst consensus estimate of $21.123 billion by 1.14 percent.

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CFRA Maintains Its Buy Opinion On Shares Of Yum Brands, Inc.

/ / Consumer Discretionary /

We lift our 12-month target price to $152 from $150, 26.5x our 2024 EPS, slightly below YUM’s five-year average forward P/E of 26.9x, reflecting near-term revenue growth risks. We lower our 2024 EPS to $5.74 from $5.84 and FY 25’s to $6.45 from $6.54. YUM posted Q1 adj-EPS of $1.15, $0.05 below consensus. Revenue of $1,598M (-2.9% Y/Y) was $112M below consensus. Adjusted operating income increased 5.5% Y/Y to $515M vs. $568M consensus, with margin expanding to 34.7%. Same-store sales fell 3.0% vs. 3.7% consensus, with declines at Pizza Hut (-7%) and KFC (-4%), partly offset by Taco Bell (+1%). We also note the Middle East conflicts and unfavorable weather were headwinds. While we’re still positive about YUM’s Taco Bell division and its AI initiatives (over 40 currently), there are concerns about near-term margin pressure amid the more promotional environment. Nonetheless, we think YUM is relatively well positioned given its

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Target’s Price Cuts Touch Key Household Items

/ / Consumer Discretionary /

Target’s planned price cuts on frequently shopped items directly touch many goods that have cost more due to prolonged inflation. The retailer says lower prices will be seen on items ranging from milk, meat, fresh fruit and vegetables, snacks, pet food and more. The latest CPI data shows the price of chicken rising 0.7% and beef and veal climbing 7% in April over the past year. But, pets and pet products declined 0.5%, and snacks fell 1.3% in April over the past year. Target says it will lower prices on about 5,000 frequently shopped items and has just reduced prices on about 1,500 items, with thousands more price cuts planned to take place over the summer months.

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Ryanair Posts Higher Earnings, But Pricing Disappoints

/ / Consumer Discretionary /

Ryanair is among the most-mentioned companies across news items over the past six hours, according to Factiva data, after the Irish carrier reported upbeat year-end results and a 700 million euros ($760.9 million) share buyback. However, concerns about its prices weighed on shares. “It might seem counterintuitive that Ryanair’s share price is enduring a bit of turbulence after the low-cost airline announced record passenger numbers and profits, but the prospect that ticket price cuts might be on the way has subdued sentiment,” AJ Bell analyst Danni Hewson said in a note. Ryanair, which reported higher year-end earnings on rising passenger numbers, said summer bookings were trending ahead of their prior-year level. This summer outlook has been echoed by several of the company’s peers, including Lufthansa in Germany, and London-listed easyJet. That said, Ryanair said recent pricing was softer than previously expected and should remain subdued. In addition, the company warned

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Target Price Cuts Could Help Keep Shoppers From Pivoting To Walmart

/ / Consumer Discretionary /

Target will lower prices on 5,000 frequently shopped items, a move that may keep consumers from spending at other retailers with value offerings such as Walmart. Target says it’s cutting prices on items ranging from milk, meat, fresh fruit and vegetables, snacks, pet food and more. The move comes as Walmart’s latest results last week showed rising sales as shoppers kept spending on inexpensive everyday necessities, while also gaining market share with higher-income households particularly in the grocery category. Walmart CFO John David Rainey told WSJ the company is benefiting from an economic environment where people are looking for value.

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Netflix Has Won Streaming Wars, Next Stage Will Be Ad Revenue Growth, Wedbush Says

/ / Consumer Discretionary /

Netflix (NFLX) has a “virtually insurmountable lead in the streaming wars” and it’s now positioning itself to increase advertising revenue, Wedbush said Monday in a note to clients. The streaming giant’s rivals will likely “continue to flail while trying to replicate Netflix’s business model,” said Wedbush analysts including Alicia Reese. Meanwhile, the company’s “advertising tier should reap benefits for several years,” the analysts said. “The biggest benefit of the ad tier so far is that it limits churn,” the note said. “Netflix is positioning to accelerate ad tier revenue contribution into year-end and 2025 as it improves its advertising solutions and targeting, expands partnerships, and adds more live events.” The company has “reached the right formula with global content creation, balancing costs, and increasing profitability,” the analysts said, adding the company will likely “continue to expand profitability and generate increasing free cash flow.” Catalysts for the company include the “full

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TikTok Review Turns Up Heat on Chipotle

/ / Consumer Discretionary /

Chipotle Mexican Grill’s new TikTok critic has some investors worried. Chipotle partnered with TikTok food reviewer Keith Lee last year over a so-called ordering hack he popularized. But Lee last week posted a video in which he slammed the fast-casual chain for what he viewed as small portion sizes and lacking flavor. That post went viral, garnering over 14M views, prompting some investor concern about backlash. Wedbush analysts Nick Setyan and Michael Symington note the worries and say their checks suggest there hasn’t been a major effect on sales and traffic. Investor concerns follow recent internet-fueled backlash at Planet Fitness and Bud Light.

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