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RH's "Softening Demand Trends"
Shares of RH (NYSE: RH) fell 1.30% in after-hours trading on Thursday after the home-furnishings company posted mixed financial earnings.
Financial: RH reported earnings per share of $7.78 and revenue of $957 million; both were better than expected.
Disruption: Despite the strong financial performance, RH said that it “experienced softening demand trends which began at the time of the Russian invasion of Ukraine and have further slowed during the market disruption over the past several months.”
Outlook: The guidance for the second quarter and the full year were both below estimates. RH sees the next several quarters as “a short-term challenge” as the company cycles “the extraordinary growth from the COVID-driven spending shift” and navigates through “multiple macro headwinds.”
No Discount: The company noted that some competitors are discounting prices in the retail industry, but RH is refusing to discount its prices because of “certain long-term risk of brand erosion and model destruction once you begin down that path.”
Good News: RH said it was increasing its share repurchase program by $2 billion, which should help the stock price.
Final Thoughts: RH’s stock is down 43% in the last six months, but good sales and a robust stock repurchase program should help.
Notable Earnings Today: BRP (TSE: DOO).
Notable IPOs Today: Citizens Financial Services, Inc. Common Stock (Nasdaq: CZFS), SaverOne 2014 Ltd. American Depositary Shares (Nasdaq: SVRE), Aura FAT Projects Acquisition Corp Class A Ordinary Shares (Nasdaq: AFAR).
Notable Equity Crowdfunding Campaigns Ending Today: Harper Macaw (MainVest), EvStructure (Fundify).
Notable Economic Events Today: Unemployment Rate (8:30 a.m. ET), Nonfarm Payrolls (8:30 a.m. ET), Labor Force Participation Rate (8:30 a.m. ET), Average Hourly Earnings (8:30 a.m. ET), Markit Composite PMI (9:45 a.m. ET), Services PMI (9:45 a.m. ET), ISM Non-Manufacturing PMI / Employment (10:00 a.m. ET).
Strong Demand Boosts Lululemon
Shares of Lululemon (Nasdaq: LULU) jumped 2.12% in after-hours trading on Thursday after the athletic apparel retailer posted positive financial earnings.
Financials: Lululemon reported earnings per share of $1.48 and revenue of $1.61 billion; both were better than expected.
The Good: Net revenue increased 32% in North America and 29% internationally. Total comparable sales increased 28%. Online sales were strong and, surprisingly, sales for Lululemon’s men’s products were up a lot.
The Bad: The company’s gross margin dropped 320 basis points to 53.9%.
Numbers: Lululemon’s stock is down 30% in the past six months, but is up 9% in the past five days.
Final Thoughts: The stock may not be valued well, but these results show that retail sales for high-end consumers are still strong.
Where Ethereum Sits in 2022
Ethereum, similar to other cryptocurrencies, has declined in value in 2022. What does that mean for the popular crypto?
Data: The price of Ethereum has lost over 40% of its value in 2022.
Pros: Despite the drop, Ethereum still has a lot going for it. It is experiencing more user growth and seeing more demand due to use cases involving smart contracts.
Final Thoughts: Ethereum is still one of the most popular cryptos, and if the crypto market surges again, it will likely benefit.
Trends to Watch
Another Airline Fee: Frontier offers $250 mln break-up fee in Spirit Airlines deal (Reuters)
Robot Drivers, Here We Come: Cruise gets green light for commercial robotaxi service in San Francisco (CNBC)
Another Tech Company: Coinbase to Rescind Employment Offers, Extend Hiring Freeze (Bloomberg)
Bitcoin for a Burrito: Chipotle Now Accepting Cryptocurrency Payments at US Locations (CoinDesk)
Probably Not: Are Retail Investors Driving the Stock Selloff? (Nasdaq)
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