Today is Friday, September 8, 2023.
The Early Bird Index today is 56.87.
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RH's Challenging Luxury Market
RH (NYSE: RH) tumbled 7.82% in after-hours trading on Thursday after the home-furnishings company posted weaker guidance with its financial results.
Financials: RH reported earnings of $3.93 per share in the past quarter and revenue of $800 million; both were better than expected.
Details: The company achieved an operating margin of 20.2% in the past quarter, which was better than expected.
Yes, But: RH is projecting an operating margin in the range of 8% to 10% for the current quarter, which is way lower than estimates.
Quote: “We continue to expect the luxury housing market and broader economy to remain challenging throughout fiscal 2023 and into next year as mortgage rates continue to trend at 20-year highs and the current outlook is for rates to remain unchanged until the second quarter of 2024.” - Chairman and CEO Gary Friedman.
Stock Price: RH is up 45% this year, but down 7% in the last 30 days.
Final Thoughts: It’s obvious that the economy is tough for luxury goods companies, including RH. There’s clearly a reason why Warren Buffett sold his stake in the company a few months ago.
Notables
Notable Earnings Today: Kroger (NYSE: KR), Rent the Runway (Nasdaq: RENT).
Notable IPOs Today: Courtside Group, Inc. Common Stock (Nasdaq: PODC).
Notable Equity Crowdfunding Campaigns Ending Today: Glow Worm Play Cafe (Mainvest), Uncommon Path Brewing (Mainvest), SunDrift (Mainvest).
Notable Economic Events Today: N/A.
Smith & Wesson's Strong Financials
Smith & Wesson (Nasdaq: SWBI) jumped 12.75% in after-hours trading on Thursday after the firearm manufacturer posted strong financial results.
Financials: Smith & Wesson reported earnings of 13 cents per share in the past quarter and revenue of $114.2 million; both were better than expected.
Details: Revenue increased by $29.8 million, up 35.4% from the same period last year.
Yes, But: The gross margin decreased from 37.3% to 26.6% during that time period.
Quote: “Innovation and our iconic brand's reputation for quality continue to be big drivers of consumers' preference for Smith & Wesson. Combined with healthy, lean channel inventories as we enter the traditionally busy fall season, we anticipate these tailwinds will allow us to continue to deliver strong results." - Mark Smith, President and CEO.
Stock Price: While Smith & Wesson is up 17% this year, the stock is down 18% in the last 30 days.
Final Thoughts: Another good quarter of financial results for Smith & Wesson. Need another reason to invest in this company? Smith & Wesson increased its dividend a few months ago.
Express Welcomes New CEO
Fashion retailer Express (NYSE: EXPR) appointed Stewart Glendinning as its CEO on Thursday, which sent shares up by 4.61% in after-hours trading. Glendinning will assume the role on September 15.
Final Thoughts: Glendinning will try to turn the company around. The stock lost over half of its value this year.
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Trends to Watch
iTrouble: Apple shares fall after reports that China banned iPhone use by government employees (CNBC)
Chipped: Intel Stock Heads Higher Even as U.S.-China Chip War Worries Mount (Barron’s)
Employed: US jobless claims hit lowest level since February; productivity strongest in years (Reuters)
So Much for Wage Inflation: Walmart Cuts Starting Pay for Some New Hires (Wall Street Journal)
Owning Part of a Sports Team: Oakland Roots and Soul Sports Club launches crowdfunding campaign for pro soccer club (VentureBeat)
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