Retail Favorites Report

Bob Iger returned in November as Disney’s captain to “right the ship.” And just one quarter into his efforts, the company looks to be turning in the right direction. 🚢

Today Disney reported better-than-expected fiscal first-quarter results. CNBC has the breakdown:

Iger’s first order of business has been reducing expenses and putting the creative power back in the hands of its content creators. As part of that effort, he announced thousands of job cuts and cost-cutting measures of $5.5 billion. The restructuring will leave a company with three distinct divisions: Disney entertainment (most of its streaming and media operations), ESPN (TV network and ESPN+), and Parks, Experiences, and Products. 💰

The bright spot remains its parks, experiences, and products divisions, which saw a 21% YoY increase in revenue during the quarter. Its streaming business remains in the negative, but losses are narrowing. The price hikes it implemented last quarter helped buoy revenue, and fortunately, more subscribers stuck around than initially expected. It originally forecasted Disney+ subscriber losses of 3 million due to the price hikes. Yet it only saw a 2.4 million decline. 📺

Lastly, Iger will ask the board to reinstate the dividend by the end of the calendar year. And while it will be a modest dividend initially, he expects the company will build on it over time.

Investors appear to share in Iger’s optimism, as $DIS shares were up roughly 6% on the news. 👍

It’s been a rough time for Robinhood recently, with falling markets pressuring trading activity among retail investors. With that said, its share price is sitting near the same level as a year ago, leading many to question whether a turnaround is in the works. 🤔

Today the company reported its eighth straight quarterly net loss. However, its loss per share of $0.19 improved from last year’s $0.49 per share loss. Meanwhile, revenues rose 5% YoY to $380 million as net interest revenue surged 165% to $167 million. 🤑

Other stats investors were watching included:

• Net Cumulative Funded Accounts rose by 50k QoQ to 23 million
• Monthly Active Users (MAUs) fell by 800,000 QoQ to 11.4 million
• Assets Under Custody fell 4% QoQ to $62 billion
• Net Deposits grew at a 30% annualized rate to $4.8 billion
• Average Revenues Per User (ARPU) up from $63 to $66 QoQ

The company’s efforts to cut costs and further monetize its user base created mixed results. It’s safe to say a rising rate environment was the company’s saving grace. The higher yield it offers on uninvested brokerage cash helped attract additional customers to its premium “Gold Tier” offering. And net interest revenue accounted for roughly 44% of its total revenue.

Overshadowing the results was the board of directors’ decision to buy back the 55 million shares bought by Sam Bankman-Fried last year via the FTX subsidiary Emergent Fidelity Technologies. That represents roughly 7% of the company’s outstanding shares. However, there’s limited precedent for this situation, so the timeline and share price of the repurchase remains to be seen. 💰

So far, investors appear pleased with the results. $HOOD shares are up roughly 4.20%. 👍

Uber was back in the headlines today after the company reported its ‘strongest quarter ever.’ 💪

Below are the company’s key stats vs. expectations:

• Earnings per share: $0.29 vs. ($0.18)
• Revenues: $8.6 billion vs. $8.49 billion
• Mobility gross bookings: $14.9 billion vs. $14.8 billion
• Delivery gross bookings: $14.3 billion vs. $14.3 billion

While Uber’s delivery business drove most of its pandemic-era growth, its mobility segment revenue was back on top during all four quarters of 2022. Meanwhile, the company’s third segment, Uber freight, also booked $1.5 billion in sales this quarter.

Overall monthly active platform consumers rose 11% YoY to 131 million, with 2.1 billion trips completed (+19% YoY). CEO Dara Khosrowshahi said that the pandemic’s impact on the company’s mobility business is “now well and truly behind us.”👍

Although executives said they’re not seeing any signs of consumer weakness, active drivers also hit an all-time high during the quarter. Potentially driving that trend is the rising cost of living, as they’ve noticed that inflation is a factor for 70% of the drivers on its platform. 🤔

Overall, investors are happy to see both of the company’s main segments firing on all cylinders. $UBER shares were up roughly 5% on the day.

Buy Now Pay Later (BNPL) company Affirm is falling sharply after reporting worse-than-expected second-quarter results. 😩

Its loss per share of $1.10 was above the $0.98 loss expected. And revenues of $400 million fell short of the $416 million expected. 🔻

More importantly, Founder and CEO Max Levchin announced that the company would cut 19% of its workforce. The firm hired ahead of the revenue required to support the size of the team, using its pandemic-era growth to justify the strategy. However, that all changed when interest rates began rising in mid-2022. He says the Fed’s actions“dampened consumer spending and increased the company’s cost of borrowing dramatically.”

Like other technology CEOs, he says the responsibility falls on him, noting, “The root cause of where we are today is that I acted too slowly as these macroeconomic changes unfolded.”

Moving forward, he expects Affirm’s headcount to be flat for the foreseeable future. Additionally, the company is redirecting the majority of its R&D efforts to margin-improving projects, repeat consumer engagement and Debit+ for the next several quarters. Hopefully, those efforts can help stabilize its business in the current, more challenging environment.

$AFRM shares are down roughly 20% on the news as investors run for the exits. 🏃