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AutoZone Reports Earnings

AutoZone, Inc. (AZO) released its first quarter earnings report on Tuesday, December 5. The auto parts company’s shares dipped less than 1% despite the company reporting better-than-expected quarterly profit.

The company reported net sales of $4.19 billion during the quarter, in line with analysts’ expectations. This was up 5% from $3.99 billion in sales during the same quarter last year.

“I want to thank all AutoZoners across the company for their efforts during our first fiscal quarter,” said AutoZone CEO, Bill Rhodes. “Our domestic sales results were solid despite tough comparisons from a year ago, while our international business continues to deliver exceptionally strong sales growth. We remain committed to driving sales and earnings growth throughout fiscal 2024, while returning cash to our shareholders.”

AutoZone reported net income of $593.46 million for the quarter or $32.55 per adjusted share. This was up from $539.32 million or $27.45 per adjusted share in the same quarter last year.

The Memphis, Tennessee-based company saw a 1.2% increase in their domestic same store sales, and a 25.1% increase in international same store sales for the quarter. During the quarter, AutoZone closed one store but opened 25 net new stores, including 17 new stores in the U.S., five in Mexico and four in Brazil. At the end of the quarter, the company had a combined total of 7,165 stores globally. The company’s new store growth resulted in the company’s inventory increasing 3% over the same period last year.

AutoZone, Inc. (AZO) shares ended the week at $2,620.49, relatively unchanged for the week.

Dave and Buster’s Releases Earnings Report


Dave and Buster’s Entertainment, Inc. (PLAY) announced its third quarter earnings on Tuesday, December 5. The arcade company’s stock rose about 11% after the company reported a decline in sales that was less pronounced than anticipated.

Revenue reached $466.9 million for the third quarter. This was a 3% decrease from revenue of $481.2 million reported in the same quarter last year and below analysts’ expectations of $472.3 million.

“During the quarter, we continued to make significant progress against our key growth initiatives,” said Dave and Buster’s CEO, Chris Morris. “On the organic growth front, we have seen meaningful success in the tests we have implemented in our marketing, food and beverage, pricing, special events and remodel initiatives which we look forward to rolling out across the broader portfolio over the coming weeks and months and which we expect will lead to substantial improvement in revenue and profitability. We remain as confident as ever in the $1 billion AEBITDA target we indicated during investor day and remain laser focused on delivering that result in the coming years.”

Dave and Buster’s reported a quarterly net loss of $5.2 million or $0.12 per adjusted share. Last year at this time, the company reported net income of $1.9 million or $0.04 per adjusted share.

Dave and Buster’s combined comparable store sales decreased 7.8% compared to the same time last year but this was an increase of 8.1% compared to the same quarter in 2019. The company’s entertainment segment reported revenue of $302.0 million and food and beverage revenues came in at $164.9 million for the quarter. The company opened three new stores in the quarter for a total of 214 locations by the end of the third quarter. During the quarter, the company engaged in a sale-leaseback arrangement for four Dave & Buster’s stores resulting in $85.8 million in proceeds.

Dave and Buster’s Entertainment, Inc. (PLAY) shares closed at $47.29, up 10% for the week.

Stitch Fix Reports First Quarter Results


Stitch Fix, Inc. (SFIX) released its first quarter earnings on Tuesday, December 5. The clothing company’s shares declined by nearly 9% following the release of the report.

Net revenue for the quarter came in at $364.8 million, down 18% from $443.7 million in net revenue at this time last year. This was above analysts’ expectations of $362.4 million in net sales.

“This quarter's results are encouraging, and I am pleased with the progress we have made to date,” said Stitch Fix CEO, Matt Baer. “We continue to focus on optimizing the business in the short term while working to reimagine our business and operating model with the goal of delivering sustainable and profitable growth in the future.”

The company posted a net loss of $35.5 million for the quarter or $0.30 per share. This was an improvement from a net loss of $55.9 million or $0.50 per share during the same quarter last year.

In comparison to the previous year, Stitch Fix reported a decrease in active clients of 132,000, or 4%, to 2,989,000. Net revenue per active client also declined 6% year-over-year to $506 per client. The company generated $16.9 million in free cash flow for the first quarter and ended the quarter with $262.3 million in cash, investments and no debt. For the second quarter of fiscal 2024, Stitch Fix expects net revenue between $325 million and $335 million.

Stitch Fix, Inc. (SFIX) shares ended the week at $3.99, relatively unchanged for the week.

The Dow started the week of 12/4 at 36,089 and closed at 36,248 on 12/8. The S&P 500 started the week at 4,564 and closed at 4,604. The NASDAQ opened the week at 14,169 and closed at 14,404.
 

Treasury Yields Vary

U.S. Treasury Yields dipped mid-week as investors reacted to the latest labor market data which showed signs of a cooling labor market. Yields rose at the end of the week as the recent jobs numbers revealed lower unemployment rates.

On Tuesday, the Labor Department released its Job Openings and Labor Turnover Survey. The survey announced that U.S. job openings declined by 617,000 to 8.73 million in October, the lowest level since March 2021. This came in below analysts’ expectations of 9.4 million. The ratio of job openings to available workers also declined to 1.34 vacancies for every unemployed person, down from 1.47 in September.

“This data certainly solidifies the Fed’s decision to keep rates unchanged while looking for signs of a pivot in the upcoming meeting next week,” said U.S. Economist at RSM, Tuan Nguyen. “Besides inflation, job opening data, serving as a proxy for labor demand and wage pressure, has been the Fed’s top priority in recent times.”

The benchmark 10-year Treasury note yield opened the week of December 4 at 4.20% and traded as low as 4.10% on Thursday. The 30-year Treasury bond opened the week at 4.34% and traded as low as 4.21% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased by 1,000 to 220,000, seasonally adjusted, for the week ended December 2. Continuing unemployment claims decreased by 64,000 to 1.86 million. On Friday, the Jobs report was released indicating the unemployment rate unexpectedly declined to 3.7% for November, from 3.9% in October. Nonfarm jobs, seasonally adjusted, increased 199,000 for November, coming in higher than the 190,000 economists expected.

“The job market continues to be resilient after a year of dodging recession fears,” said Lead Economist at Glassdoor, Daniel Zhao. “Really the one concern that we had coming in today’s report was the recent rise in the unemployment rate. So the improvement in unemployment was a welcome relief.”

The 10-year Treasury note yield finished the week of 12/8 at 4.23%, while the 30-year Treasury note yield finished the week at 4.31%.
 

Mortgage Rates Decrease Again

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, December 7. The report indicated a decline in mortgage rates for the sixth week in a row.

This week, the 30-year fixed rate mortgage averaged 7.03%, down from last week’s average 7.22%. Last year at this time, the 30-year fixed rate mortgage averaged 6.33%.

The 15-year fixed rate mortgage averaged 6.29% this week, down from 6.56% last week. At this time last year, the 15-year fixed rate mortgage averaged 5.67%.

“The 30-year fixed-rate mortgage averaged near 7% this week, down from nearly 7.8% just six weeks ago,” said Freddie Mac’s Chief Economist, Sam Khater. “When rates began to rapidly drop, purchase applications rebounded initially, but this improvement in demand diminished in the last week. Although these lower rates remain a welcome relief, it is clear they will have to further drop to more consistently reinvigorate demand.”

Based on published national averages for the week of 11/20, the national savings rate was 0.46%. The one-year CD finished at 1.85%.

Editor’s Note: The publicly available financial information is offered as a helpful and informative service to our friends. This article is not an endorsement of any company, product or service.

Published December 8, 2023

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