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BJ’s Wholesale Blasts 8% 😤 💪

Good evening, ladies and gents. Stocks closed mixed.

The S&P 500, Dow, and Nasdaq all lightly dipped into the red zone, but the Russell 2000 closed green (+0.08%). 

Here’s today’s heat map. Things were a little more colorful than yesterday. 😅

On the economic front, initial claims jumped, existing home sales fell, and the Philadelphia Fed’s Manufacturing gauge slowed to a 2-year low.

3/11 sectors closed green, with materials (+0.68%), health care (+0.22%), and consumer discretionary (+0.13%) all notching minimal gains. 

Today’s main story is on BJ’s upside earning surprise. ⬆️ Investors watched closely following Target and Walmart’s bombshell reports that dragged the retail sector and market lower.

In other earnings news, Kohl’s missed earnings and gave an update on its sales attempt. Meanwhile, Applied Materials and Palo Alto Networks offered an additional perspective on the tech sector after Cisco’s disappointing outlook yesterday. Highlights from those below. 👇

Here are the closing prices: 

S&P 500 3,900 -0.58%
Nasdaq 11,389 -0.26%
Russell 2000 1,776 +0.08%
Dow Jones 31,253 -0.75%

Earnings

BJ’s Pops After Earnings Come In Above Estimates

BJ’s Pops After Earnings Come In Above Estimates Featured Image

To wrap up a rollercoaster earnings week for retail, BJ’s Wholesale Club took the spotlight with an 8% jump in trading following the company’s Q1 earnings report. 🥳 The Massachusetts-based warehouse club excited investors with its ability to keep costs low despite climbing inflation. 

BJ’s Wholesale Club Holdings Inc gained 7.43% in trading today thanks to the company’s favorable Q1 financials. The company posted a beat on EPS with adj. earnings of $0.87 per share (+39% YoY), as opposed to Wall St. estimates of $0.71 per share. In terms of revenue, BJ’s scored $4.5 billion, an increase of +16.2% YoY, which beat estimates of $4.24 billion.

The company’s CFO commented on BJ’s performance and forward guidance in spite of looming inflation: “We are pleased with our performance in the first quarter and remain optimistic that the strength of our core business will continue to drive long-term growth. Our fiscal year 2022 EPS outlook of flat year-over-year remains unchanged.” 👏 👏

Check out $BJ’s intraday chart:


Earnings

Thursday’s Earnings Recap

Thursday’s Earnings Recap Featured Image

Kohl’s, Palo Alto Networks, and Applied Materials also reported today. Let’s see how they fared:

Kohl’s ($KSS) EPS: $0.11 vs. $0.70 expected | Revenue: $3.72 billion vs. $3.68 billion expected | Link to Report

$KSS gained 4.33% in trading today after reporting first quarter results. The company acknowledged changing customer behavior amid inflation and other macroeconomic factors. Kohl’s also commented on the pending acceptance of a bid from a potential buyer, as the retail company has been pressured by an activist investor for the last several months to sell. 💰

Kohl’s CEO Michelle Gass commented on the company’s financial results: “[I am] pleased with the number of parties who recognize the value of our business and plan.” 

That being said, Gass also acknowledged some of the economic challenges facing Kohl’s during the quarter: “Sales considerably weakened in April as we encountered macro headwinds related to lapping last year’s stimulus and an inflationary consumer environment.” 🤷

Palo Alto Networks, the California-based cybersecurity company, reported Q3 earnings and $PANW soared 10.08% after hours. Here are the numbers: 

Palo Alto Networks ($PANW) EPS: $1.79 vs. $1.68 expected | Revenue: $1.39 billion vs. $1.36 billion | Link to Report

Palo Alto Networks provided exciting full-year guidance, which entails a +29% YoY increase in revenue. $PANW spent the day trending on Stocktwits — check it out! Here’s $PANW‘s impressive intraday chart:

Applied Materials Inc, a California-based company which manufactures equipment necessary to produce semiconductors, descended almost 3% today. $AMAT expressed difficulties with supply chain issues and posted a miss on earnings and revenue. Here are the numbers:

Applied Materials Inc. ($AMAT) EPS: $1.85 vs. $1.90 expected | Revenue: $6.25 billion vs. $6.35 billion expected | Link to Report

The company’s CEO commented: “Demand for Applied Materials’ products and services has never been stronger, yet we remain constrained by ongoing supply-chain issues. Our priority is to work quickly and creatively across the supply chain to bring more industry capacity online.” 

$AMAT is down 2.38% after hours.

Want more EPS?? Check out Stocktwits’ earnings calendar! 📅


Crypto

FTX Opens Up Stock Trading

FTX Opens Up Stock Trading Featured Image

In less crypto-y related crypto-news: the crypto exchange FTX is going TradFi: the company is launching a feature to allow users to trade stocks and ETFs alongside crypto. 

The company’s brokerage service will expand to the vast majority of its U.S. customers in the next few months, adding another player to an industry rife with “no commission” trading platforms.

However, unlike incumbents in the space like Robinhood and WeBull, FTX will actually for forego routing orders to order makers. By doing so, FTX will do away with the controversial practice of “Payment for Order Flow.” 

Broker-dealer Public.com did away with Payment for Order Flow during the GameStop short squeeze last January, opting to deliver orders directly to the exchange. However, discontinuing PFOF has reportedly had a massive downside effect on the company’s revenue. 

For FTX, that doesn’t seem to be a concern: it’s already a goliath in crypto trading across spot, futures, and options markets. It doesn’t care about “see[ing] a profit on day one,” according to FTX.US President Brett Harrison. He added that FTX eventually wants “to offer … an everything app for financial services.”

The addition of equities trading follows a monster purchase of stock in Robinhood by FTX CEO Sam Bankman-Fried, who acquired 7.6% of the company. He claims that he intends to be a passive investor.


Bullets

Bullets from the Day

⚡ Tesla has been removed from the S&P 500’s ESG index. Although Elon Musk’s EV company is the #1 electric vehicle manufacturer in the world (and certainly the most famous), some analysts argue that “management and workplace issues” within Tesla warrant the ticker’s removal from the index. Tesla’s removal is causing quite the controversy, challenging previous definitions of what “ESG” really means in today’s context. Read more about Tesla in Bloomberg.

🏳️ Melvin Capital, the hedge fund at the center of the Gamestop saga, is closing its doors. The fund ended 2021 down 39%, and losses continued this year, with the fund down another 23% through the end of April. Gabe Plotkin, who founded the firm in 2014 after leaving SAC Capital Advisors, says the fund has begun liquidating and will stop charging management fees on June 1st. Despite its recent heavy losses, the fund still averaged an 11.9% return since its founding. Reuters has more.

🙅‍♂️ Spirit Airlines’ board rejected JetBlue’s bid for a hostile takeover. Spirit’s board repeated its support in favor of a merger with Frontier Airlines, and said that JetBlue’s offer posed “too much regulatory risk.” JetBlue disagrees; the company’s CEO commented on the situation of a merger between Spirit and JetBlue, claiming “We firmly believe this pro-competitive combination would be better.” Drama, drama, drama… read more in the WSJ. 

💸 Meet the insiders whose stock you bought during last year’s tech IPO bonanza. They sold stock worth $35 billion last year. Marketwatch shares the numbers.