A Trip Down Mall-mory Lane

Several retailers reported today, many of which have a significant mall presence. Let’s see how they fared and what they said about the U.S. consumer. 🏬

First up is Kohl’s, which reported an unexpected first-quarter profit. Profitability improved as freight costs declined, and the company became more pointed with its promotional activity after getting inventory levels back under control. That led to adjusted earnings per share of $0.13, beating the $0.42 loss expected. Revenue of $3.36 billion and comparable-store sales declines of 4.3% were essentially in line with expectations.

The Kohl’s brand has struggled to remain relevant among consumers, but executives stressed the changes they’re making are paying dividends. The company is opening more Sephora shops, expanding into categories like pet and home decor, and featuring gift-giving items ahead of key holidays. With that said, the “middle-income consumer,” which is the core of its customer base, remains pinched by high inflation and economic uncertainty. 😬

The company remains the target of activist investors who have successfully pushed a CEO and board of directors. Last year, it also failed to sell itself to Vitamin Shoppe owner Franchise Group.

Like other “old school” retailers, Kohl’s has a lot of work to do in reinventing itself for today’s consumers. $KSS shares rose 7% today but are still trading at the same level as the late 1990s. 🤷

Abercrombie & Fitch also reported a surprise profit and raised its guidance. Its adjusted earnings per share of $0.39 on revenues of $836 million beat the expected $0.05 loss and $815 million in revenues. Same-store sales were also up 3% vs. the 1% decline expected. Additionally, executives raised their net sales growth from 1%-3% to 2%-4%. They also increased their operating margin outlook from 4%-5% to 5%-6%. That sent $ANF shares up over 30% on the day. 🤩

Next up is Express, which we spoke about two months ago as bankruptcy fears rose. While shares rebounded with the market since then, today’s earnings have it pushing back toward their all-time lows. $EXPR shares were down more than 15% on the day. 📉

Its adjusted loss per share of $0.99 and revenues of $383.3 million missed the $0.79 and $389 million consensus estimates. Same-store sales fell 14% due to what executives described as “a combination of external factors and challenges in our product assortments.” Consumers remain price sensitive as they reduce discretionary spending, causing Express and its competitors to increase promotions. As a result, it’s being hit on both the revenue and margin side, as its financials reflect.

American Eagle Outfitters also didn’t fare well. Although its adjusted earnings per share and revenue matched estimates, it cut its operating income outlook. It now expects $250 to $270 million vs. the $270 to $310 million range it forecasted in March. It also anticipates full-year revenue to be flat to down low single-digits vs. flat to up single-digits. Its brand performance remains mixed, with Aerie’s comparable-store sales up 2% and American Eagle’s down 2%. Lastly, store revenue rose 5% while digital revenue fell 4%. $AEO shares are down 16% after the bell. 🦅

Lastly, we’ll mention Guess. The retailer lost $0.22 per share on revenues of $570 million. That compared to estimates of a $0.28 per share loss on $556 million in revenue. Executives expect fiscal 2024 revenue growth of 2% to 4% and adjusted earnings per share of $2.60 to $2.90. They also increased the dividend from 22.5 cents per share to 30 cents. $GES shares are up about 2% after hours. 🔺

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Retail Earnings Roundup

There were many retailer earnings today, so let’s recap each with one or two lines. 👇

Off-price retailer Burlington Stores saw third-quarter earnings, revenue, and margins top expectations as consumers traded down to cheaper brands. Its guidance was also strong, with executives citing strong “back to school” shopping and a great start to the holiday shopping season this November. $BURL +21%.

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Workhorse’s Wild Ride Continues

It’s been a rough ride for electric vehicle startup investors over the years. But it’s been especially tough for investors in Workhorse Group, with today’s earnings results failing to improve their situation. 👎

The company’s third-quarter revenues of $3.03 million were up 95.5% YoY but missed consensus expectations of $20.9 million by a wide margin. It also expects 2023 revenues to come in between $10 and $15 million, while Wall Street was looking for $63 million. 🔻

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Draft Kings: Winning And Losing Is Money

There’s positive news, guidance, and fundamentals, and then there’s whatever $DKNG‘s earnings are. 😲

Loss Per Share (LPS): DraftKings is trimming the fat, slimming down to a 61-cent loss per share, a solid sprint from last year’s $1 loss.
Total Revenue: $790 million in revenue, a 57% jump that’s got investors doing the touchdown dance.
Customer Acquisition: They’re reeling in the bettors like a pro, with monthly unique payers spiking 40% YoY.
Average Revenue Per User (ARPU): Each user is now worth $114 on average, up 14%.
Expansion Plays: With Kentucky in the pocket and Maine and North Carolina warming up, DraftKings is spreading faster than strep throat in a coed dorm.
Market Share Mojo: DraftKings just outflanked FanDuel, seizing the throne with 31% of the online gambling kingdom.
Revenue Outlook: They’re forecasting $3.67 billion to $3.72 billion for the fiscal year. And a cool $4.50 billion to $4.80 billion projected for 2024.

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Dish Networks Goes Offline

Dish Networks is back in the news, but not for great reasons. The stock plunged 37% to 25-year lows today, let’s see why. 👇

The satellite TV and wireless services company surprised investors with a third-quarter loss, as pay-TV and wireless subscribers declined. Its net pay-TV subscribers fell by 64,000, while retail wireless subscribers fell by 225,000. Average revenue per pay-TV users rose 3.1% YoY to $105.25, and Dish TV churn rose from 1.53% last year to 1.58% this quarter. 📊

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