Tech Backtracks Before Inflation Data

Some of the best-performing stocks are often hiding under the radar. That definitely includes the $10 billion convenience store chain Casey’s General Stores, which soared to new all-time highs after reporting first-quarter results. 📈

The company reported earnings last night, and investors continued to bid it up today. Earnings per share of $4.52 topped estimates by $1.19, while revenues of $3.87 billion missed slightly. 

Inside same-store sales jumped 5.4% YoY, with an inside margin of 40.6% and gross profit rising 10.3% YoY to $556.4 million. Meanwhile, same-store fuel gallons were up 0.4% YoY, with a fuel margin of 41.6 cents per gallon, and total fuel gross profits declining by 3.6% YoY to $297 million. 🔺

Like other retailers, executives said the consumer remains fairly resilient. While there’s more pressure on lower-income consumers, they’re still spending, simply choosing more affordable options.

As a result, they’re continuing to build on their success by adding at least 150 stores in the fiscal year ending 2024. That’s up from prior guidance of 110 stores and did not raise its net interest expense guidance. 🏪

Despite a lackluster score from famed “One-Bite” pizza reviewer Dave Portnoy, Casey’s pizza continues to drive inside-store growth. 🍕

Many people don’t know that its more than 2,500 locations make it the fifth largest pizza chain in the U.S., so clearly, many people like Casey’s pizza. And the company’s account made sure to remind Dave of that. 😆

While we had fun getting that little exchange started on social media, $CASY investors enjoyed shares rising 11% to their highest level ever. Its total return is now approaching 30,000% since coming public in the 1980s. We’ll see if its hot streak can continue! 🤩

Unlike the excitement over the pizza at Casey’s General Store, Apple’s annual iPhone launch event was an absolute snoozefest. 😴

Investors had been looking for exciting changes to the product to help justify higher-priced phones or at least entice customers to upgrade; they were left disappointed. That’s because the iPhone 15 price was not raised and will again start at $799 for the base model and $999 for the pro model. The only model to see a change was the Pro Max, which will start $100 higher at $1,199.

These pricing decisions likely reflect the lack of significant changes and the ongoing global smartphone slump. 🔻

A new action button, USB-C charging port, a titanium shell, 72-hour battery life, camera improvements, and several other changes were announced. But nothing that caused investors (or users) to be that impressed. 📱

In addition to those iPhone changes, the company announced several other products, including the Apple Watch Ultra 2, iOS 17 and other software updates, satellite-based roadside assistance, etc.

As for the stock, shares fell about 2% on the day and remain stuck below their 2022 highs near 180-183. Technical analysts have been concerned about the stock since its post-earnings trend break in early August. They say its inability to reclaim those highs signals potentially more pain ahead. ⚠️

We’ll have to wait and see. In the meantime, we can all continue to enjoy the many memes the internet spun out about the lackluster event. 😂

One of these auto parts retailers is not like the other… 🤔

The troubles at Advance Auto Parts continue, with S&P Global Ratings downgrading the retailer’s credit rating to ‘junk’ status. The rating agency cut its issuer-credit rating to BB+, the highest speculative-grade rating. The downgrade from BBB- was accompanied by its outlook being cut from stable to negative. ⚠️

As for why it downgraded the company, S&P cited inconsistent execution in improving its inventory and product availability. Its ‘misguided strategic decision’ to try to preserve and expand its margins while competitors cut prices caused the company to lose already dwindling market share. Its revenue growth is flat YoY, while its peers have seen low-teen percentage growth.

Overall, its competitive standing in the industry has weakened due to major operational missteps that will take several quarters (or years) to address properly. 🗓️

While the downgrade pressured the stock further today, it likely didn’t come as a major surprise to anyone following the auto parts retailer space. Advance Auto Parts has lagged competitors AutoZone and O’Reilly Automotive for about eight years, with performance really diverging at the beginning of 2022. 😮

The news sent $AAP shares down 8% to 12-year lows as market participants look to salvage what’s left of their ‘junky’ investment. Today’s move brings the stock’s year-to-date return to -60%, with no turnaround in sight. 😬