Today is Friday, June 10, 2022.
New to this newsletter? Sign up here
Stitch Fix "Has Work To Do" After Earnings
Shares of Stitch Fix (Nasdaq: SFIX) dropped 16.32% in after-hours trading on Thursday after the online personal styling service posted negative financial earnings.
Financials: Stitch Fix reported a loss of 72 cents per share and revenue of $492.9 million; both were below estimates.
The Good: Net revenue per active client reached $553, which represents an increase of 15% year-over-year. It’s the sixth consecutive quarter of revenue per active client growth.
The Bad: The number of active clients hit 3.9 million, which represents a 5% decline. On top of that, Stitch Fix confirmed a CNBC report on Thursday that it is laying off 15% of salaried positions in its workforce.
Quote: “While third quarter top-line results, as well as active client counts, were largely within our expectations, we know we still have work to do.” - Stitch Fix CEO Elizabeth Spaulding.
Outlook: The company expects revenue in the current quarter to be between $485 million t0 $495 million, which represents a decline of up to 15%. This is also below estimates.
Numbers: Shares of Stitch Fix are down 59% in 2022 and are down 87% in the past 12 months.
Final Thoughts: Stitch Fix is another example of a company that rose to prominence during the pandemic, crashed back down to earth, and is implementing layoffs or hiring freezes.
Notable Earnings Today: N/A.
Notable IPOs Today: Forafric Global PLC Ordinary Shares (Nasdaq: AFRI), Acri Capital Acquisition Corporation Unit (Nasdaq: ACACU).
Notable Equity Crowdfunding Campaigns Ending Today: Northstar Technologies Group (Netcapital).
Notable Economic Events Today: Core CPI / CPI (8:30 a.m. ET), Michigan Consumer Expectations / Sentiment (10:00 a.m. ET), WASDE Report (12:00 p.m. ET), Federal Budget Balance (2:00 p.m. ET).
Vail Resorts Jumps On Strong Pass Sales
Shares of Vail Resorts (NYSE: MTN) jumped 6.68% in after-hours trading on Thursday after the mountain resort company posted positive financial earnings.
Financials: Vail Resorts reported earnings of $9.16 per share and revenue of $1.17 billion; both were better than expected.
The Good: Pass product sales jumped 9% in units and 11% in sales dollars during the quarter. Total lift revenue increased 23.7%, ski school revenue increased 50.4%, and lodging segment net revenue increased 54.6%.
The Bad: During the season, the company suffered capacity and staffing constraints due to the pandemic.
Outlook: The company expects its resort reported EBITDA to be between $828 million and $842 million, which is better than expected.
Numbers: Vail Resort’s stock is down 23% in the past 12 months, but is up 1.7% in the past 30 days.
Final Thoughts: While there is always a concern about the impact of the pandemic, Vail Resorts is making a comeback.
Are Tech Stocks Back?
Although the technology-heavy Nasdaq Composite delivered a surprising increase in early June, the tech sector may not be ready for a comeback after a bad start to 2022.
Jobs: Several tech companies, some public and some private, announced a mixture of layoffs and hiring freezes in early June. This is a bad sign for the sector.
Micro Cut: Microsoft (Nasdaq: MSFT) cut its guidance last week, a sign that tech giants might struggle this summer.
Final Thoughts: Keep an eye on the U.S. dollar this summer. If it gets stronger, that could spell trouble for tech stocks.
Trends to Watch
Optimism: There's room for cryptocurrency in 60/40 portfolio, Galaxy Digital says (Seeking Alpha)
Nosedive: Americans lost half a trillion dollars in wealth in early 2022 (CNN)
Meanwhile, in Europe: ECB Plans July Rate Increase as Inflation Problem Deepens (The Wall Street Journal)
Actual Price Decreases: Adobe CEO says e-commerce is seeing price decreases, expects strong future for online shopping (CNBC)
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.