Lumber Liquidated As Retail Drops It Lowe’s

Walmart, Home Depot, and Target earnings have already sounded the alarm about the health of U.S. consumers. And today, Lowe’s and Lumber Liquidators added to the anxiety with their own earnings misses. 😨

Let’s take a look at what they said. 👀

First up is Lowe’s, which reported adjusted earnings per share of $2.28 vs. the $2.21 expected. Rising costs continued to pressure gross margins, which shrank to 32.3% in the quarter. 

Revenues of $22.45 billion fell short of the $22.69 billion estimate. And if you account for the extra week that occurred during the fourth quarter, then sales actually declined YoY. 🔻

Same-store sales also fell 1.5%, with a 0.7% decline in the U.S. Like Home Depot, the company blamed a reduction in lumber prices for the drop. Overall, a 4.8% rise in average ticket prices was insufficient to offset a 5.5% decline in transaction volumes. 🛒

For fiscal 2023, executives expect total revenues of $88 to $90 billion and a flat or 2% decline in same-store sales. The conservative outlook came in below consensus estimates, as they cited similar economic challenges as their peers. Overall, weakness in consumer spending and the housing slowdown continue to weigh on Lowe’s results and the broader industry. 

$LOW shares fell nearly 6% on the news. 📉

Meanwhile, Lumber Liquidators Flooring posted weaker-than-expected Q4 earnings. 🪵

Its adjusted loss per share of $0.29 vs. the expected $0.08 earnings per share. Meanwhile, revenues of $263.9 million also missed the $267.6 million expected. Total comparable store sales fell 9.5% YoY, and its gross margin fell to 35.9%. Operating margins also decreased by 10.40%, falling to -6.60%. 

The company faces many of the same headwinds as Home Depot and Lowe’s. Growth in its pro customers helped partially offset the decline in consumer sales, but inflation and the more challenging macro environment are causing consumers to reduce their discretionary purchases. That, plus the housing slowdown, makes it a challenging environment for the company. 🏘️

$LL shares fell 12% on the day, nearing the all-time lows it set during the pandemic. 👎

More in   Earnings

View All

Lyft’s IR Department Just Whiffed

Investor relations departments are the silent heroes of a public company, receiving little recognition for the critical role they play. When they do receive a lot of attention, it’s generally not for good reason. That’s unfortunately what Lyft’s team is finding out today. 😵‍💫

After the bell, ridesharing company Lyft reported fourth-quarter results that were good, not great. But the stock immediately shot up and notched as high as a 60% gain before anyone realized what happened. Did the company just invent a cure for rare diseases? Are they pivoting to crypto or semiconductors? What was the cause of this?

Read It

Semis Continue To Tower Over Market

Semiconductors continue to dominate the market and thus dominate our headlines. With that said, today we’ve got a fresh stock breaking out and another setting up, so stick with us. 👇

First up is Tower Semiconductor, an Israeli chip manufacturer that reported results today. The company’s revenue fell 13% YoY to $351.7 million during the fourth quarter but topped the $350 million expected by analysts. Its earnings per share were down about 30% YoY to $0.48, but again, better than anticipated. 🔺

Read It

Another Day, Another Chip Rally

It’s another day, which means investors and traders were buying anything in the semiconductor space that isn’t tied down. Let’s see what you missed. 👇

First up, chip-equipment company Applied Materials soared to new all-time highs after citing “artificial intelligence” momentum during its earnings call. Adjusted earnings per share and revenues both topped expectations, while its current-quarter expectations also beat estimates. 🏭

Read It

Buyers Move Beyond Tech

Animal spirits have been a big theme of this newsletter since October, and boy, are things getting wild. While the mainstream media continues focusing on tech giants like Nvidia, investors and traders are searching far and wide for new opportunities to squeeze the shorts and make a killing. 🕵️‍♂️

Today’s surefire sign of this speculative fervor building in the market is everyone’s favorite non-meat meat stock, Beyond Meat. 🫨

Read It