Retailers’ Rocky Start To ’23

As companies and investors alike shake off their holiday slumber, the time for results has come. Earnings season is kicking off on Friday with the banks, but in the meantime, several retailers have already preannounced that their holiday quarter didn’t go as well as they had hoped. 👎

Kicking off the weakness was Lululemon, which told investors at the ICR conference that its Q4 net revenue will be between $2..66 to $2.70 billion. This was marginally higher than its previous guidance, but its higher earnings per share range of $4.22 to $4.27 missed expectations.

Driving that weakness was a gross margin decline of 90 to 110 bps. The challenging macro environment appears to have extended to the athleisure company’s higher-income customer base.

$LULU shares were down more than 9% on the news. 📉

On the other end of the spectrum is Macy’s, which updated its already reduced holiday-quarter guidance. 📝

It now expects net sales to be at the low end to mid-point of its $8.16 to $8.40 billion forecast, which will also miss analyst expectations. Its guidance for earnings per share remains wide at $1.47 to $1.67, with analysts expecting $1.60.

Management’s commentary didn’t help, indicating that their data suggests consumers will remain pressured in 2023. As such, they’ve adjusted their inventory mix and purchases to prepare for a challenging first half of the year. They also noted that weak discretionary spending was the primary reason for their miss.

$M shares were down roughly 8% on the news. 🛍️

Overall, this is just the tip of the iceberg for retail news. Given the state of the economy, investors will be analyzing the numbers and commentary from this sector very closely in the weeks ahead. 🔍

Short Seller Targets Legendary Investor

In its latest report, short-seller Hindenburg Research targeted famous activist investor Carl Icahn’s publicly-traded holding company.

The company took a short position against “Icahn Enterprises,” citing various reasons but essentially accusing executives of “Ponzi-like” behavior. 🤯

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Media & Entertainment Moves

Although we briefly discuss FaZe Holdings and Rumble earnings in the story above, there was much more media and entertainment news today. We did our best to summarize them here. 👇

European Union regulators approved Microsoft’s Activision Blizzard acquisition. However, the market still seems unsure that other hurdles will be mounted as $ATVI shares are still trading well below the proposed price. 🎮

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