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Monday April 6, 2020

Finances

Finances
 

Best Buy Posts Quarterly Earnings

Best Buy Co., Inc. (BBY) reported earnings for the fourth quarter on Thursday, February 27. The retailer’s earnings topped analysts’ expectations for the quarter.

Revenue came in at $15.20 billion for the quarter, up from $14.80 billion reported during the same quarter last year. Analysts expected quarterly revenue of $15.05 billion.

“We are posting our 12th straight quarter of comparable sales growth and showing our strength as a successful multi-channel retailer who can meet customers when and where they want,” said Corie Barry, Best Buy CEO. “We offered compelling holiday deals that resonated with customers and provided a seamless shopping experience, great inventory availability and fast and free delivery.”

The company posted net earnings of $745 million, or $2.84 per share. This was up from net earnings of $735 million, or $2.69 per share at this time last year.

Best Buy posted comparable store sales growth of 3.4% during the fourth quarter. The company attributed the increase to strong sales of merchandise, including headphones, appliances, mobile phones and tablets. This led to domestic revenue of $13.85 billion in the quarter. Internationally, the company increased its revenue 3.4% to $1.35 billion.

Best Buy Co., Inc. (BBY) shares ended the week at $75.61, down 12.3% for the week.

Shake Shack Delivers Net Loss


Shake Shack (SHAK) released its latest quarterly earnings on Monday, February 24. The restaurant chain posted an increased net loss for the quarter, despite rising sales.

The company reported revenue of $151.4 million for the quarter. This was up from $124.3 million in revenue at the same time last year.

“2019 was another milestone year at Shake Shack. We opened our largest class of Shacks ever, with 73 across the globe, 39 company-operated and 34 licensed,” said Shake Shack CEO Randy Garutti. “A total of 49 of those new Shacks were here in the United States, and internationally, we unlocked tremendous revenue growth by entering important new markets for the first time, namely Shanghai, Mexico City, Singapore and Manila.”

Shake Shack reported a net loss of $2.1 million during the fourth quarter. This was an increase from a $500,000 net loss during the same quarter last year.

The company, which started in New York City, is currently in a phase of rapid expansion. However, Shake Shack has shown a recent decline in same-store sales. While same-store sales rose 1.3% for the full year, during the fourth quarter, same-store sales fell 3.6%. During 2020, the company plans to open more than 60 new locations.

Shake Shack (SHAK) shares ended the week at $59.79, down 18.2%.

Intuit’s Earnings Beat Expectations


Intuit Inc. (INTU) released its second quarter earnings on Monday, February 24. The software company reported increases in both revenue and profits.

Revenue for the quarter came in at $1.70 billion, up from $1.50 billion in revenue at this time last year. This came in above experts’ expected revenue of $1.68 billion.

“We are halfway through our fiscal year and continue to see strong momentum as we make progress on our strategy to become an A.I.-driven expert platform," said Intuit CEO Sasan Goodarzi. “Our second quarter revenue grew 13% overall, fueled by 17% growth in the Small Business and Self-Employed Group and 8% growth in the Consumer Group.”

The company reported net income of $240 million, or $0.91 per share. This was up from $189 million, or $0.72 per share during the same quarter last year.

Intuit, the creator of TurboTax and QuickBooks software, expects 10-11% revenue growth in the third quarter. The company’s third quarter ends on April 30, two weeks after the deadline to file income tax returns. Intuit also expects earnings per share between $5.53 and $5.58 for the third quarter.

Intuit Inc. (INTU) shares ended the week at $265.85, down 7.83% for the week.

The Dow started the week of 2/24 at 28,402 and closed at 25,409 on 2/28. The S&P 500 started the week at 3,258 and closed at 2,954. The NASDAQ started the week at 9,188 and closed at 8,567.
 

Treasury Yields Fall as Stocks Hit Correction

Yields on U.S. Treasurys dropped further this week as investors continue to seek the safety of bonds with stock prices plummeting. The global spread of the coronavirus, known as COVID-19, continues to contribute to market turmoil.

On Thursday, the Dow Jones Industrial Average fell 1,191 points. This drop of more than 10% from its recent high point, represents a market correction.

“We have to brace ourselves for wave after wave of earnings downgrades,” said Paul O’Connor, head of Multi-Asset at Janus Henderson Investors. “The globalization of the virus extinguishes confidence in the V-shaped recovery that was the view last week.”

The yield 10-year Treasury note opened at 1.218% on Friday, down from the week’s opening yield of 1.475%. The 30-year Treasury bond yield opened Friday at 1.718% after opening the week at 1.963%.

As of Friday, COVID-19 had spread to more than 50 countries, with more than 83,000 confirmed cases. So far, 60 cases have been confirmed in the United States, the majority of which were evacuees from a quarantined cruise ship.

“Wednesday’s attempted sell-off quickly reversed as reasons to think the safe-haven rally had gone too far were met with the realities of a still-expanding outbreak,” wrote Ian Lyngen, head of rates strategy at BMO Capital Markets. “News that several dozen cases were under investigation near New York City were just an exacerbating factor; it’s certain that more infections in varying locations will be announced before too long.”

The 10-year Treasury note yield closed at 1.13% on 2/28, while the 30-year Treasury bond yield was 1.67%.
 

Mortgage Rates Drop

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, February 27. The report revealed a drop in mortgage rates for the week.

The 30-year fixed rate mortgage averaged 3.45% this week, down from 3.49% last week. Last year at this time, the 30-year fixed rate mortgage averaged 4.35%.

This week, the 15-year fixed rate mortgage averaged 2.95%, down from last week’s average of 2.99%. During the same time last year, the 15-year fixed rate mortgage averaged 3.77%.

“Given the recent volatility of the 10-year Treasury yield, it’s not surprising that mortgage rates again have dropped,” said Sam Khater, Freddie Mac’s Chief Economist. “These low rates combined with high consumer confidence continue to drive home sales upward, a trend that is likely to endure as we enter spring.”

Based on national averages, the savings rate was 0.09% for the week of February 24. The one-year CD averaged 0.48%.

Published February 28, 2020
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