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| 1 | | Best Buy's fiscal first-quarter results showed higher-than-anticipated earnings per share of $1.15 but lower-than-anticipated sales of $9.47B. The CEO, Corie Barry, blamed the drop in sales on consumers' recessionary actions due to rising prices and inflation. More: - Compared to the same period last year, when net income was $341M, the first quarter's net income fell to $244M.
- Similar sales decreased by 10.1%, as anticipated by investors, and in early trade, shares increased by more than 2%.
- Through partnerships in the healthcare industry and the relaunch of its membership program, Best Buy has looked for additional revenue sources.
- As families have more connected devices and the need for replacements or new purchases emerges, Best Buy forecasts a comeback in tech demand.
- Best Buy's stock has slipped 14% this year, compared to a 7% increase in the S&P 500 and a 2% decrease in XRT retail stocks.
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What happened: As consumers cut back on higher-profit purchases, Walmart is taking a stand against supplier price increases for household essentials. Consumer goods businesses' price increases have impacted Walmart's margins on discretionary spending on essential products. Food inflation has seen progress, with the Consumer Price Index reporting a 1% growth in food-at-home costs during the first half of 2022, but it has become negative in recent months. Why it matters: Walmart encourages suppliers to focus more on increasing unit volume than cutting prices. Consumers have become more frugal, decreasing Walmart's ability to offer significant discounts. With more than $600B in revenue and the economic clout of the mid-2023 market, Walmart is twice the size of Costco and Target. Where to see the impact: Walmart is putting pressure on suppliers to lower costs, ease food inflation, and improve profits for the company. This will help keep prices of everyday essentials stable and benefit customers. | | | |
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| 3 | | Abercrombie & Fitch outperformed expectations in the fiscal first quarter, with a profit of $0.39 per share on $836M in revenue and a net income of $16.57M. This was a turnaround from the previous year's loss of $16.46M. More: - In the quarter, same-store sales rose by 3%, exceeding expectations of a 1% fall.
- In its updated estimate for the upcoming fiscal year, Abercrombie & Fitch predicted net sales growth of 2% to 4% and an operating margin of 5% to 6%.
- The company forecasts net sales growth of 4% to 6% and an operating margin of 2% to 3% for the second fiscal quarter.
- Following the encouraging results report, Abercrombie & Fitch's stock rose more than 30%.
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| 4 | | With overall sales of $3.36B, slightly above expectations, while comparable sales fell 4.3% in line with Wall Street estimates, Kohl's posted an unexpected profit of $0.13 per share ($14M) for the first quarter. The company updated its full-year projection, predicting a 2% to 4% fall in net sales and profits per share from $2.10 to $2.70. More: - Compared to the same quarter the previous year, Kohl's net income increased to $0.13 per share from $0.11 per share, and the company's shares closed more than 7% higher.
- The firm highlighted adjustments it has made to draw customers, such as growing Sephora stores and highlighting giftable items.
- In a challenging economic landscape, Kohl's saw increased in-store traffic and average basket size while decreasing inventory by 6% YoY.
- Margins increased during the quarter, and the firm intends to increase revenues in the second part of the year with more Sephora locations and fresh goods.
- Kohl's stock has taken a big hit this year, closing at $19.27 on Tuesday and down over 23% YTD, despite the S&P 500 and XRT having risen and fallen moderately, respectively.
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| 5 | | American Eagle Outfitters announced quarterly earnings of $0.17 per share, in line with expectations, and revenue of $1.08B, which exceeded expectations. However, the company lowered its full-year outlook, causing shares to drop by 13%. More: - Store revenue increased by 5%, and digital revenue dropped by 4%.
- Comparable sales for Aerie rose by 2%, while those for the company's flagship brand, American Eagle, fell by 2%.
- Net income dropped by almost 42% to $18.45M in the same period last year.
- Unlike last year, inventory levels dropped by 8% to $625M compared to the same period.
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| 6 | | VinFast has issued a voluntary safety recall for 999 VF8 City Edition vehicles due to a software error in the dashboard display, causing it to go blank and potentially increasing the risk of a crash, according to the NHTSA. Of the 999 recalled cars, over 700 are yet to be delivered. More: - According to VinFast, no field reports of problems have been made; thus, the recall is a preventative step.
- This recall was announced immediately following VinFast's merger with SPAC Black Spade Acquisition Co, with an estimated potential equity value of $23B.
- In February, VinFast recalled 2,781 VF8 vehicles in Vietnam due to front braking problems.
- The first VinFast vehicles are expected to arrive in Europe in July, and a software update to fix the dashboard problem is planned for May 25.
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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