Today is Wednesday, September 21, 2022.
New to this newsletter? Sign up here.
Stitch Fix Has Macro Challenge
Shares of Stitch Fix (Nasdaq: SFIX) dropped 2.54% in after-hours trading on Tuesday after the online personal styling service posted negative financial earnings.
Financials: Stitch Fix reported a loss of 89 cents per share and revenue of $481.1 million; both were below estimates.
Outlook: The company sees net revenue for the current quarter declining 20% to 22% year-over-year and adjusted EBITDA margins dropping 2% to 3%.
The Bad: The number of active clients declined by 9%. For the full-year, net revenues are also down.
The Good: Net revenues per active client increased 8% year-over-year.
Quote: “Today’s macroeconomic environment and its impact on retail spending has been a challenge to navigate, but we remain committed to working through our transformation and returning to profitability.” - Stitch Fix CEO Elizabeth Spaulding.
Stock Price: The stock of Stitch Fix is down 75% this year, including an 18% drop in the past 30 days.
Final Thoughts: Stitch Fix is one of those stocks that rose to prominence during the pandemic but came crashing back down in the past year. As it tries to recover, will other retail businesses face similar challenges?
Notable Earnings Today: Lennar (NYSE: LEN), General Mills (NYSE: GIS), RLX Technology (NYSE: RLX), KB Home (NYSE: KBH), H.B. Fuller (NYSE: FUL), Trip.com (Nasdaq: TCOM), Steelcase (NYSE: SCS), Inventiva (Nasdaq: IVA).
Notable IPOs Today: Laser Photonics Corp (Nasdaq: LASE).
Notable Equity Crowdfunding Campaigns Ending Today: Kettlebread Franchising Corporation (StartEngine).
Notable Economic Events Today: Existing Home Sales (10:00 a.m. ET), Crude Oil Inventories (10:30 a.m. ET), FOMC Statement / Interest Rate Decision (2:00 p.m. ET).
Aurora Cannabis’ Impairment Charges
Shares of Aurora Cannabis (Nasdaq: ACB) dropped 2.86% in after-hours trading on Tuesday after the cannabis producer posted its financial earnings.
Net Loss: Aurora Cannabis lost $618.8 million in the quarter compared to a loss of $134 million for the same period last year. The company blamed it on non-cash impairment charges of $505.1 million due to changes in cannabis market conditions, higher rates of borrowing, and lower foreign exchange rates.
Medical Growth: Revenue for the company’s medical cannabis segment increased by 4% due to growth in the international medical market.
Stock Price: The stock for Aurora Cannabis is down 75% this year and is down 98% since its 2019 peak.
Final Thoughts: Despite these problems, Aurora Cannabis still expects a positive adjusted EBITDA run rate by the end of the year.
Equity Crowdfunding Spotlight: CERN Corporation
Briefly describe your business. Cern Corp. is addressing a significant “Unmet Need” for an effective, non-drug, therapeutic treatment to mitigate fungal & bacterial vaginosis, without drugs. The Cern Device™ uses low-level microbicidal light, and is similar in size to a tampon.
What are the terms of the investment for your campaign? Cern is soon to launch on the StartEngine equity funding portal. We are raising $1.07M against a valuation of $12M for further device development. Cern is issuing common shares.
What makes your startup special? Validated “Unmet need” for a non-drug therapy. Women and clinicians seeking an alternative to drugs. Extensive IP Position with Freedom to Operate. Proven science. Straightforward development path.
Trends to Watch
The Decision is Coming: Rising Interest Rates Squeeze Stocks on Both Sides, Constraining Earnings, Multiples (The Wall Street Journal)
Forked: What Cardano’s Highly Anticipated Vasil Hard Fork Will Bring (CoinDesk)
Flying for Rich People: American Airlines to introduce premium suites with privacy doors (CNN)
Not Golden: Gold Ends at 29.5-Month Low (CoinNews)
Calling it Quits: Spac booster Chamath Palihapitiya throws in the towel (Financial Times)
Thank you for reading!
Forward to a friend and tell them to sign up here.
Want more investing tips? Listen to the podcast.
Questions or comments? Hit reply to reach out.