What Happened In The Stock Market This Week?
This week in the stock market saw well-known retail-giants such as Target Corporation ($TGT), and Costco Wholesale Corporation ($COST) release their latest earnings report, with shares of Target rising, and the opposite happening to Costco.
We also saw apparel retailers release earnings this week including Foot Locker ($FL), Victoria's Secret & Co. ($VSCO), Nordstrom Inc. ($JWN), and American Eagle Outfitters, Inc. ($AEO). But the story of the week in this industry is the little-discussed, yet astonishing comeback of Abercrombie & Fitch ($ANF) both in the apparel industry and in the stock market with shares up more than 500% since the start of 2023.
We'll also discuss some technology companies that made news this week including CrowdStrike Holdings ($CRWD), Broadcom Inc. ($AVGO), and DocuSign, Inc. ($DOCU) all of which released earnings this week. Plus we'll cover the major news regarding up-and-coming hopeful, Palantir Technologies, Inc. ($PLTR) winning a major contract with the United States Army.
Last, we'll discuss the always volatile, small-cap highlights of the week with discussion surrounding Airship Holdings Inc. ($AISP), and Lytus Technologies ($LYT) who soared more than 500% this week alone!
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Target Corporation ($TGT):
We'll kick things off with the well-known retail giants in the United States and start with Target Corporation ($TGT). Shares of $TGT rose more than 13% during the morning session on Tuesday after the release of the company's latest earnings report. Target reported higher holiday-quarter earnings and predicted that annual comparable sales would come in largely above Wall Street analyst expectations. The well-known retailer is relying on same-day services, new product launches, and a new membership program to boost revenue. Target plans to launch a membership feature in April of this year, called Target Circle 360. This program will offer shoppers unlimited same-day delivery services for orders over $35. The membership will initially be priced at $49. Target reported adjusted earnings of $2.98 per share in Q4 of 2023, compared to $1.89 per share during the same quarter in 2022. This figure came in well above analyst expectations of $2.42 per share. Online sales fell 0.7% during Q4 of 2023, compared with a 6% decline from Q3 in 2023. The company said they saw an increase in revenue partially attributed to its newly-launched collections such as Kendra Scott jewelry and its Figmint kitchenware line. Customers also heavily utilized their same-day pickup services, which made up more than 10% of total sales during the most recent quarter. Target CEO, Brian Cornell said that the company plans to open more than 300 U.S. stores and remodel most of its roughly 2,000 existing stores over the next decade.
Costco Wholesale Corporation ($COST):
Shares of $COST fell more than 5% during the morning session on Friday after the release of the company's latest earnings report during the post-market session from the previous day. Costco missed analyst expectations for its holiday quarter, despite reporting year-over-year sales growth and strong gains in the e-commerce sector. The wholesale grocery retailer reported earnings per share of $3.92, beating anlyst expectations of $3.62 per share. However, the company fell well-short of revenue expectations, reporting $58.44B in revenue when analyst expectations were set at $59.16B. When comparing revenue to the same period in 2022, however, Costco revenue increased from $55.27B. The company reported that the food court, pharmacy, and optical centers werer the top performing areas in the quarter. Foot traffic increased 5.3% globally and 4.3% in the United States. In the most recent quarter, Costco opened four new clubs (stores), including three in the United States and one in China. This is now the sixth club (store) to open in China. Costco is also looking to gain a stronger foothold in the e-commerce industry, and they did just that in the most recent quarter, increasing digital sales by 18.4% compared to the same quarter from the previous year. Costco app downloads were up 2.8 million in the most recent quarter and now total about 33 million. Costco has also seen more membership sign-ups now that they have made an effort to crack-down on membership sharing. Investors of the company have been waiting for Costco to raise its membership fees for more than a year now, since the company typically increases this fee roughly every 5 1/2 years. The last fee hike was in June, 2017. However, current CFO, Richard Galanti said the company is not hiking the fee yet, but noted that "It's when, not if".
Foot Locker, Inc. ($FL):
Shifting to the apparel industry, many of which released earnings this week, we'll start our discussion with the well-known footwear retailer, Foot Locker ($FL). Shares of $FL tumbled more than 27% during the morning session on Wednesday after the release of the company's latest earnings report. The company actually reported a holiday-quarter loss, issued weak guidance for the current year, and said it's behind on meeting its financial goals. A trinity of terrible news for investors of the company. With how poorly the past fiscal year went, the company is now expecting the profitability goal it laid out during its March 2023 investor day to be delayed by two years. EPS and revenue did come in above analyst expectations, however. The company is expecting earnings per share for the coming year to come in between $1.50 and $1.70 per share, compared with initial estimates of $1.40 to $2.30 per share. CEO, Mary Dillon, said in a statement, "As we continue evolving into a modern, omnichannel retailer for all things sneakers, we are making important progress strengthening our brand partnerships, increasing customer engagement, transforming our real-estate footprint, and driving growth in digital.". It has been a little more than a year since Mary Dillon has taken the helm of the company. During her tenure, sales have consistently fallen as the retailer has grappled with a changing mix of sneaker brands and a staple consumer that has bared the brunt of inflation more acutely than consumers in a higher income bracket. Dillon was previously the CEO of Ulta Beauty, and turned the company into a powerhouse cosmetics retailer. The turnaround for Foot Locker, however, has taken longer than analysts expected. The company did however, sign a new marketing deal with the NBA, made plans to enter India, and said it is still on its way to achieving its financial goals.
Victoria's Secret & Co. ($VSCO):
Shares of $VSCO fell more than 30% during the morning session on Thursday after the release of the company's latest earnings report during the post-market session from the previous day. The nose dive in share prices came after the company issued a cautious sales outlook due to soft apparel demand in the North American market. Company leadership said it expects net sales for the coming year to be approximately $6B, falling short of initial estimates of $6.19B. Company CEO, Martin Waters, said in the recent earnings statement, "As we look into the new year, we recognize the broader intimates market in North America has been down for four consecutive quarters and we are planning the business appropriately conservative in the near term.". Not all was bad, however, as the company posted adjusted earnings of $2.58, beating estimates of $2.46 per share. Revenue for the latest quarter grew 3% compared to the same period from 2022, matching analyst expectations. The company also issued a stock buyback program, authorizing the repurchase of up to $250 million of the company's common stock.
Nordstrom, Inc. ($JWN):
Shares of $JWN fell by more than 14% during the morning session on Wednesday after the release of the company's latest earnings report during the post-market session from the previous day. Nordstrom topped analyst expectations for the most recent quarter, but gavbe a muted outlook for the year ahead, causing shares to nose dive. The company said it plans to open new Nordstrom Rack stores and drive higher online and in-store sales in the coming year, yet in the same breadth also saying that they expect revenue to decline roughly 2%. Not all was bad, however, as the company did say that they expect EPS (earnings per share) to fall somewhere between $1.65 and $2.05 per share, which would still be an increase from $1.51 per share from the previous year. Similar to other retailers, Nordstrom has felt the behavioral tendencies of consumers becoming more selective and more price-concious while dealing with inflation, higher interest rates, and less discretionary income. It has also struggled with company-specific issues, such as laggin sales at its Nordstrom Rack locations, and too much unpopular inventory, causing increased levels of markdowns. Nordstrom's net income rose to $134 million from $119 million from the previous year. Company CEO, Erik Nordstrom, said on the company's earnings call that they plan on opening 22 additional Nordstrom Rack stores in 2024, and that Nordstrom Rack is "a growth engine for our company" and is the "largest source of new customer acquisition." In the coming year, he said the retailer will focus on driving sales growth at its namesake banner, operating more efficiently, and building on the momentum at Nordstrom Rack.
American Eagle Outfitters, Inc. ($AEO):
Shares of $AEO increased by more than 4% during the morning session on Thursday after the release of the company's latest earnings report during the post-market session from the previous day. The company announced a new strategy to boost profitable growth over the next three years, as the retailer said it wrote off $94 million in impairment charges related to its internal logistics business Quite Platform. The company said the plan will focus on three key pillars; amplify, execute, and optimize. The company plans to amplify its brands by growing its namesake banner, boosting Aerie's expansion and develop the activewear assortment at its offline banner. It will also focus on financial discipline and optimize its operations to fuel growth and long-term profit. The company also beat analyst expectations for earnings during the holiday quarter, which the company attributed to strong demand as well as lower markdowns and input costs. Adjusted earnings per share for Q4 came in at $0.61 per share vs. analyst expectations of $0.50 per share. Revenue for Q4 came in at $1.68B vs. analyst expectations of $1.67B. Sales during Q4 rose to $1.68B, up roughly 12% from the same quarter during the previous year which came in at $1.5B. The company projected a full-year sales outlook of an increase between 2% and 4%, the higher value would beat the 2.9% that analysts are expecting.
Abercrombie & Fitch Company ($ANF):
Finishing off our discussion of apparel retailers, I would like to highlight the little-talked about, and astonishing comeback of Abercrombie & Fitch ($ANF) both in the apparel industry and in the stock market. Shares of $ANF fell roughly 3% during the morning session on Wednesday after their release of the company's latest earnings report. Abercrombie & Fitch said that its Q4 sales jumped 21% and its profit margin grew thanks to higher prices and lower raw material costs. The retailer also expects its growth story to continue as it issued better-than-expected sales guidance for the coming year. Earnings per share increased to $2.97 for Q4 of 2023, beating estimates of $2.83 per share. Revenue also increased in Q4 of 2023 to $1.45B compared to analyst expectations of $1.43B. The company expects sales to grow between 4% and 6% for the coming year, beating estimates hopes of 4% growth for the current year. CEO, Fran Horowitz said in a statement following the earnings release, "Our strong fourth quarter was fueled by sales growth across regions and brands. By staying close to our customers, tightly controlling inventories, and continuing to operate with financial discipline, our team delivered year-over-year Q4 operating margin expansion of 800 basis points, reaching 15.3%." Horowitz went on to add that the company is focused on expanding its global customer base and getting closer to reaching its long-term goal of $5B in global annual sales. "Abercrombie, once known for its heavily perfumed mall stores and shirtless models, has transformed into an inclusive lifestyle brand that traded screaming logos for quieter, refined styles that work for a variety of occasions an age groups. With Horowitz at the helm, Abercrombie has redefined itself to the public and has harnessed the power of social media marketing and an army of influencers to win over a new generation of customers and woo back millennials who grew up with the brand.". Wall Street has also loved the company turnaround. At the start of 2023, the stock was trading around $23 per share, and by the end of the year, had surged more than 283% to $88 per share. Just this morning, the company stock is trading at roughly $137 per share, an increase of roughly 522% since the beginning of 2023. As of Friday the company was trading closer to $120 per share, but still is up more than 400% since the beginning of 2023. A true meteoric rise .
Palantir Technologies, Inc. ($PLTR):
Shifting our discussion to the technology sector, we'll discuss the major news of the week regarding an up-and-coming hopeful in the space, Palantir Technologies ($PLTR), winning a massive contract with the United States Army, and then we'll shift our focus to some earnings releases from other companies in the tech industry. Shares of $PLTR are up more than 50% over the last 30 days, and continued to surge this week after news that the company has won a new $178 million U.S. Army contract for project TITAN, a battlefield system using artificial intelligence. The TITAN (Tactical Intelligence Targeting Access Node) battlefield system will aggregate data from space and terrestrial sensors for long-range precision targeting and other battlefield planning. U.S. President of Government Business of Palantir Technologies, Akash Jain, said in a statement regarding the awarded contract, "This award demonstrates the Army's leadership in acquiring and fielding the emerging technologies needed to bolster U.S. defense in the era of software-defined warfare...Building on Palantir's years of experience bringing AI-enabled capabilities to warfighters, Palantir is now proud to deliver the Army's first AI-defined vehicle.". This news sent the company stock from roughly $23 per share to more than $26 per share, a more than 10% increase in share price.
Broadcom Inc. ($AVGO):
Shifting our discussion earnings reports within the technology sector, we'll discuss Broadcom Inc. A company with a foothold in the semiconductor space. Shares of $AVGO fell more than 3.5% during the morning session on Friday after the release of the company's latest earnings report during the post-market session from the previous day. Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, semiconductor solutions and infrastructure software, and is headquartered in Palo Alto, California. The company reported Q1 adjusted earnings per share of $10.99 which topped analyst expectations of $10.42 per share. The company also topped net revenue expectations, reporting $11.96B vs. expectations of $11.76B. However, the company did fall short of analyst expectations on revenue and gave full-year forecasting for 2024 that failed to impress market participants. Also, it looks like the majority of the company's revenue is consolidated with the relationship they have with two giant partners in helping them design AI chips. These two companies they work with have not been named publicly, but "analysts widely believe that they are Google and Meta.". The company also did not update its annual revenue forecast of $50B, another probable reason for the decline in share prices. Company President & CEO, Hock Tan, said in a statement regarding the company's earnings release, "We are pleased to have two strong drivers of revenue growth for Broadcom in the first quarter and fiscal year 2024. First, our acquisition of VMware is accelerating revenue growth in our infrastructure software segment, as customers deploy VMware Cloud Foundation. Second, strong demand for our networking products in AI data centers, as well as custom AI accelerators from hyperscalers, are driving growth in our semiconductor segment.".
CrowdStrike Holdings, Inc. ($CRWD):
Shares of $CRWD jumped more than 18% during the morning session on Wednesday after the release of the company's latest earnings report during the post-market session the previous day. CrowdStrike provides cloud-delivered protection across endpoints and cloud workloads, identity, and data. It offers corporate workload security, vulnerability management, IT operations management, threat intelligence services, identity protection, and log management. The company primarily sells subscriptions to its Falcon platform and cloud modules, and is headquartered in Austin, TX. The company reported an earnings increase of 102% for Q4, increasing to $0.95 per share on an adjusted basis. Revenue, including acquisitions, rose 33%, to $845.3 million. When evaluating subscription-based business models, annual recurring revenue (ARR) is a key metric for health. AAR increased 34% to $3.44B, beating analyst expectations of $3.39B. Company CEO, George Kurtz, said in a post-earnings call, "The cloud is today's battleground for cyber attacks and generative AI is an adversary force multiplier.".
DocuSign, Inc. ($DOCU):
Shares of $DOCU rose by more than 5% during the morning session on Friday after the release of the company's latest earnings report during the post-market session from the previous day. The company topped analyst expectations for the quarter and issued optimistic guidance for the current quarter and the full-year sales outlook as customers continued to increase spend on IT services. The company reported adjusted earnings of $0.76 per share vs. analyst expectations of $0.65 per share. The company also reported revenue of $712.4 million vs. analyst expectations of $698.3 million. The company is projecting revenue for the current quarter to come in between $704 million and $708 million, both figures beating analyst expectations of $701 million. DocuSign CEO, Allan Thygesen attributed the better-than-expected quarterly results to growth from both enterprise and small-business customers, as well as the company being added to Microsoft's Azure marketplace, connecting the software provider with larger customers. Regarding the latest earnings report, company CEO, Allan Thygesen went on to state, "DocuSign ended fiscal 2024 with momentum in product innovation, customer growth, and financial performance, including more than doubling free cash flow year-over-year...The agreement management opportunity is massive, and we're excited to deliver category-defining innovation to our 1.5 million customers in fiscal 2025 and beyond."
Airship AI Holdings Inc. ($AISP):
Kicking off the small-cap highlights of the week, we'll discuss Airship AI Holdings ($AISP). Shares of $AISP soared more than 50% during the morning session on Wednesday after news broke the previous day that the company, a leader in AI-driven video, sensor, and data management surveillance solutions headquartered in Redmond, WA, has been awarded a large contract to an agency housed within the Department of Justice (DOJ) for the company's Acropolis Enterprise Sensor Management video and data management platform. The platform supports emerging public safety and investigative requirements. President of Airship AI said, "This award represents an expansion of a pilot program started with the agency in 2023, validating our ability to meet demanding agency operational and security requirements. Equally as exciting is this project represents the second U.S. Government agency to deploy our Acropolis platform in a FedRAMP certified cloud environment, a government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services.". Built on the NVIDIA Jetson platform, Outpost AI provides advanced analytic processing at the edge, along with highly efficient video and metadata encoding and encryption over various RF and network backhauls back to the cloud. Shares of $AISP were trading closer to $5.60 per share during the market session on Friday.
Lytus Technologies Holdings ($LYT):
Concluding our small-cap highlights of the week we'll discuss the mover of the week, Lytus Technologies ($LYT). Shares of $LYT soared more than 500% during the morning session on Thursday after news that the company has officially launched Lytus Cloud, and will enter the $326B data center market. Lytus Cloud is a cutting-edge suite of cloud infrastructure services that is designed to meet the escalating demands of enterprise computing. The services include public cloud, private deployments, managed private clouds, build-operate-transfer (BOT) data centers, co-location, cloud consulting, and VPS and hosting services. Company CEO, Dharmesh Pandya, said about the launch, "Lytus Cloud will serve as the foundational backbone for all of our technology-driven ventures, presenting us with a remarkable opportunity to build a cutting-edge platform that drives growth and revenue on a global scale." The company expects the expansion to primarily focus on serving U.S. clients, while also expand in key international markets. The company closed at $2.31 per share on Wednesday and soared to more than $18 per shar during the market session on Thursday, a more than 700% increase. Shares of $LYT were trading closer to $8.55 per share during the market session on Friday.
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Resources:
$TGT:
$COST:
https://www.cnbc.com/2024/03/07/costco-cost-q2-2024-earnings.html
$FL:
https://www.cnbc.com/2024/03/06/foot-locker-fl-earnings-q4-2023.html
$VSCO:
https://www.investopedia.com/victorias-secret-stock-sinks-after-issuing-soft-sales-outlook-8605462
$JWN:
https://www.cnbc.com/2024/03/05/nordstrom-jwn-earnings-q4-2023.html
$AEO:
https://www.cnbc.com/2024/03/07/american-eagle-aeo-earnings-q4-2023.html
$ANF:
https://www.cnbc.com/2024/03/06/abercrombie-fitch-anf-earnings-q4-2023.html
$PLTR:
$AVGO:
https://finance.yahoo.com/quote/AVGO/profile/
https://finance.yahoo.com/video/broadcom-earnings-theres-more-room-220532600.html
https://www.reuters.com/technology/broadcoms-first-quarter-revenue-beats-estimates-2024-03-07/
https://www.broadcom.com/company/news/financial-releases/61901
$CRWD:
https://finance.yahoo.com/quote/CRWD/profile/
https://www.investors.com/news/technology/crowdstrike-earnings-crwd-stock-news-q42023/
$DOCU:
https://www.investopedia.com/docusign-stock-jumps-on-strong-earnings-upbeat-sales-outlook-8606156
$AISP:
https://finance.yahoo.com/news/airship-ai-announces-significant-sole-133100455.html
$LYT:
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