Some Green On The Screen

Initial and continuing jobless claims come out every Thursday, so they rarely get much attention. That’s been particularly true given the strength in the overall labor market.

With that said, today’s numbers had people talking because continuing unemployment claims rose to a 10-month high. Although the data experiences some seasonal volatility this time of year, the data has clearly flattened out and begun rising over the last six months. 📈

For your reference, the tradingeconomics.com chart below shows continuing jobless claims over the last 1.5 years.

This potential trough has given the market some hope that the red-hot labor market could begin cooling soon. Some pushback to that argument is that jobless claims remain near historically low levels. But at this point, the Fed and market bulls will take what they can get.

For now, we’ll have to wait and see whether or not this truly is a seasonal blip or if this is a true trend reversal. 🤷

Express has been barreling down the tracks in the wrong direction for some time. But today, the stock is popping after reporting earnings and inking a new joint venture with WHP.

On the revenue front, the retailer saw Q3 sales fall 8% YoY to 434.1 million, falling short of the $451.77 million expected. Comparable sales, including Express stores and eCommerce, were down 11%, as online demand fell 17%. Comparable outlet store sales were flat as consumers traded down to lower price points. 🔻

Operating expenses rose 6.8% YoY, with gross margins falling 540 bps to 27.8%. This led to a wider-than-expected loss per share of $0.50 vs. the $0.29 expected.

The earnings left a lot to be desired. But what caught investors’ attention was its “mutually transformative strategic partnership’ with WHP Global. According to a quick google search, the New York-based firm acquires global consumer brands and invests in high-growth distribution channels, including digital commerce platforms and global expansion. 🤝

WHP will invest $25 million to acquire roughly 7.4% pro format ownership in Express. And they will partner together in an Intelectual Property Joint Venture valued at roughly $400 million. Under the deal, WHP will own 60%, and Express will own 40%.

Based on today’s action, it appears investors are optimistic that this partnership can help put Express back on a better path. $EXPR shares rose 38% and closed near a 3-month high. 📈

Meanwhile, Hello Group Inc. also rose 30% today after reporting better-than-expected earnings. 👍

Its earnings per share of $0.37 beat expectations of $0.29. Meanwhile, the software company also beat revenue estimates by 2.93% at $454.49 million.

The results pushed $MOMO shares to an eight-month high. But we really just needed to mention it so we could use the ticker in the title. 😄

In addition to those discussed above, several other stocks moved on earnings today. Let’s recap.

Lululemon lost its leggings this quarter. The stock was down as much as 10% despite beating earnings and revenue expectations.

Net revenue increased by 28%, and gross profits jumped by 25% to $1 billion. And comparable store sales of 22% beat the 19% expected.

However, $LULU shares are falling on weaker-than-expected fourth-quarter earnings and revenue guidance.

Docusign looks more like Docu-win today after it reported better-than-expected earnings and revenue.

The third quarter was a loss for Docusign, but that’s not what investors were focused on. Total revenue and subscription revenue were higher by 18%, and a 27% jump in professional services and other revenue YoY. 

With all the bankruptcies from the dumpster fire that the crypto market has been in, maybe Docusign has been extra busy. But, more seriously, any improvements in the struggling software business are a welcome sign for investors.

As a result, investors pushed $DOCU shares higher after hours to the $50 mark, a +15% gain. However, it’s fallen a good amount to the $45 and $46 range (+5%) since then. 

Broadly winning is the phrase to describe Broadcom after its earnings came out.

Revenue rose 21% YoY to 8.93 billion, and earnings per share of $10.45 also beat expectations.

Investors were happy to see the positive results despite the drop in smartphone shipments this year. The company expects its VMware deal to grow its software business, helping diversify it away from harder-hit areas of the chip market industry. As a result, its first-quarter revenue guidance was boosted by 16%, raising its dividend by 12%.

$AVGO shares are up about 4% after hours.