Tag: outlook

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Health

Ceremony Assist plummets; CEO Heyward Donigan cites Covid for cautious outlook

Rite Aid plummets; CEO Heyward Donigan cites Covid for cautious outlook

Rite Aid CEO Heyward Donigan told CNBC on Thursday she’s “cautiously optimistic” the U.S. would avoid another round of strict Covid restrictions despite the presence of the delta variant.

“We all hope that enough people get vaccinated that we don’t have the variant become so significant that our markets shut down again,” Donigan said on “Squawk Box.”

Even so, the chief executive said the drug store chain was being judicious with its financial projections due, in part, to how unpredictable the coronavirus pandemic’s impact on business has been.

Shares of Rite Aid sank roughly 14% on Thursday, sending the company’s stock market value under $1 billion, as Wall Street digested mixed first-quarter results and weaker earnings guidance.

Rite Aid’s forecast for adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — came in at $440 million and $480 million in fiscal year 2022, below estimates of $524 million, according to FactSet.

“We’re being very cautious because we had a miss last quarter due to the complete meltdown, I’ll call it, of cough, cold, flu — both in the pharmacy and in the front end because there just was no cough, cold, flu,” Donigan said, alluding to the recent surprisingly calm flu season in the U.S. and its impact on Rite Aid.

“We just didn’t realize how far down, how evaporated that business would actually be. So as we look forward, we think we need to be very cautious and prudent in our guidance,” said Donigan, who has been CEO of Pennsylvania-based Rite Aid since August 2019.

“We are expecting some improvement. We’re not expecting full improvement,” Donigan added.

She also acknowledged, “It’s very hard, it remains very hard to predict, a full-year result in a retail pharmacy in the middle of a pandemic because we are … still in the throes of this to some degree.”

The company projected full-year revenue of between $25.1 billion and $25.5 billion, which exceeded Wall Street’s expectations of $24.66 billion, according to FactSet.

Rite Aid’s outlook is not factoring in potential Covid vaccine boosters or vaccinations for children under the age of 12, Donigan noted. Trials examining the vaccine in kids under age 12 are currently ongoing.

The Food and Drug Administration cleared Pfizer’s Covid vaccine for use in kids ages 12 to 15 a little more than a month ago. Moderna, which also makes a two-dose vaccine, has asked the FDA to expand its emergency use authorization to cover adolescents from 12 to 17.

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World News

Outlook for April-June quarter GDP amid Covid

Outlook for April-June quarter GDP amid Covid

Crowds of people are seen shopping during a weekly market at Kandivali.

SOPA Images | LightRocket | Getty Images

India is expected to see double-digit expansion in the three months ending in June — but economists warn that the data won’t be painting the full picture of the country’s growth trajectory.

South Asia’s largest economy released fourth quarter GDP data Monday that showed an expansion of 1.6% from the same period a year ago, driven mostly by state spending and manufacturing sector growth. Full year GDP is estimated to have contracted 7.3% compared to a 4% growth in the previous year.

Since February, India has been battling a devastating second wave of coronavirus that accelerated in April and peaked in early May. The infection forced most of India’s industrial states to implement localized lockdown measures to slow the spread of the virus.

“With the lockdowns which are there, we think that going ahead, the economy will tend to slow down,” Madan Sabnavis, chief economist at Care Ratings, said Tuesday on CNBC’s “Street Signs Asia.”

“The numbers which we get for the first quarter of fiscal 2022 — that is for the quarter ending in June — may be very much misleading,” he said. India’s fiscal year begins in April and ends in March the following year.

On (a) sequential basis, we are going to see a double digit contraction when we do a seasonally adjusted data, but on the year-on-year comparison, you are going to see a strong double-digit growth.

For the April-June quarter last year, the economy contracted 23.9% as a months-long national lockdown hammered the country. Economists argue that while the reported year-on-year figure for the current quarter will likely show a double-digit growth, the strong number will be due to the low base from last year’s negative print.

“On (a) sequential basis, we are going to see a double digit contraction when we do a seasonally adjusted data, but on the year-on-year comparison, you are going to see a strong double-digit growth,” Radhika Rao, an economist with Singapore’s DBS Group, said Tuesday on CNBC’s “Squawk Box Asia.”

“That’s because it’s coming on the back of a 24% drop the same time last year,” she added.

Still, experts agree that the economic impact of the second wave may not be as severe as the one seen last year. India has, thus far, avoided another national lockdown, allowing states to implement localized shutdowns instead. Economists agree that the country is generally on track to revive its growth but at a delayed pace.

Data is likely to show that consumption lost momentum this quarter on a sequential basis due to the second wave as households had to prioritize more of their spending on hospitalization and medical expenses, Rao explained.

“So, domestic demand, which is the main component for growth, is not going to look that good. Plus you have got contact-intensive services, most of which had been shut down,” she said, adding, “Only into June now, some of the states are starting to talk about reopening. But, certainly, it’s a very staggered and a very unpredictable path, in terms of the unwinding of restrictions.”

Many economists have trimmed their full fiscal 2022 growth predictions for India. Goldman Sachs, for example, lowered its full-year real GDP growth forecast from 11.1% to 9.9%.

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World News

South Africa races to halt third Covid wave as its financial outlook improves

South Africa races to halt third Covid wave as its economic outlook improves

A healthcare worker holds a vile containing Pfizer vaccine to be administered on elderly persons at the Bertha Gxowa Hospital in Germiston, on May 17, 2021.

Michele Spatari | AFP | Getty Images

South African economic activity has rebounded quicker than expected in recent months and the rand is the strongest-performing emerging market currency this year, but the country is racing to roll out Covid-19 vaccines as a third wave looms.

In its Financial Stability Review on Thursday, the South African Reserve Bank said the economy was continuing to rebound from a 2020 recession that saw gross domestic product contract by 7%, its steepest decline for over a century.

“Positive data releases, an uptick in global economic activity, robust international trade, elevated commodity prices and improved mobility” led NKC African Economics to upgrade its first-quarter GDP forecast to a 1.4% quarterly expansion, up from a previous forecast of a 3.3% contraction. NKC analysts now expect GDP to grow by 3.1% in 2021.

The industrial sector, particularly mining and manufacturing, has demonstrated positive growth rates on the back of increased global demand and high commodity prices 

“Google Mobility data, which has proven to be a good indicator of economic activity, has improved to its best levels since the coronavirus shock occurred,” NKC senior economist Pieter du Preez highlighted in a note Wednesday.

Third wave risks

The major ratings agencies have all reaffirmed their ratings for South Africa over the past week, but Fitch noted that although the fiscal accounts surprised to the upside on both the fourth quarter of 2020 and first quarter of 2021, the country still faces “substantial risks to debt stabilization.”

S&P also highlighted structural complaints, a lack of economic reforms and a sluggish vaccination drive as hindrances to medium-term growth potential.

Despite the positive surprises thus far, the SARB warned the outlook remains highly dependent on the pace of the vaccine rollout and possible resurgence of the virus, suggesting that the pandemic could last into 2022.

To date, the country has reported a total of over 1.6 million Covid cases, and more than 56,000 deaths, according to data compiled by Johns Hopkins University.

Now, South Africa’s seven-day rolling average of new daily cases is rising, up from its nadir of around 780 in early April to over 3,700 at the end of last week.

Given the scale of the previous hit to economic activity, the government appears reluctant to reimpose stringent virus restrictions, though President Cyril Ramaphosa met with the country’s coronavirus taskforce this week to discuss possible strategies.

South African President Cyril Ramaphosa visits the coronavirus disease (COVID-19) treatment facilities at the NASREC Expo Centre in Johannesburg, South Africa April 24, 2020.

Jerome Delay | Reuters

South Africa has begun working toward its goal to vaccinate 5 million senior citizens by the end of June and 67% of its 60 million population by February. The country has purchased 30 million doses of the Pfizer-BioNTech inoculation and ordered 31 million doses of Johnson & Johnson’s vaccine, both of which have proven effective against the dominant variant circulating in the country.

The central bank also noted the risks posed by an abrupt shift in global financial conditions and the consistently “high and rising level of public debt” in South Africa.

NKC’s du Preez said the impending third wave of Covid-19 will disrupt the economic recovery process. Meanwhile, the government is embroiled in protracted negotiations with unions over its commitment to freezing public sector wages, which du Preez said is also negative for the economic outlook.

“The National Treasury would either be forced to reprioritize expenditure or over-spend on an already large fiscal deficit,” he said. 

“Reprioritizing expenditure would entail reducing funding for critically important sectors in the economy or reducing very much needed infrastructure upgrades.”

The Treasury therefore finds itself “between a rock and a hard place,” du Preez added, since overspending could send out a signal that authorities are not serious about fiscal consolidation.

Roaring rand

Any sign of fading commitment to this austerity drive would exert pressure on the rand, Capital Economics senior emerging markets economist Jason Tuvey highlighted in a recent note.

The rand has soared on the back of higher metals prices, and was trading up at around 13.76 to the dollar by Monday morning. 

However, Capital Economics analysts said in a note Thursday that “the star performance of the rand is unlikely to last as we expect most commodity prices to fall back, and that U.S. long-term yields will begin to rise again, putting renewed pressure on EM currencies.”

“In addition, we think the SARB will not tighten policy as quickly as investors now discount, and that concerns about South Africa’s fiscal situation will eventually resurface.”

Capital Economics anticipates that the rand will weaken to around 15.5 to the dollar by the end of the year.

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Business

Electrical Automobile Begin-Up Cuts Outlook as Funding Runs Low: Dwell Updates

Lordstown’s biggest selling point to investors was that it had thousands of pre-orders for its truck, the Endurance.

Here’s what you need to know:

Credit…Megan Jelinger/Agence France-Presse — Getty Images

Shares of Lordstown Motors, a start-up aiming to make electric pickup trucks, dropped 13 percent in premarket trading on Tuesday after the company said that it would “at best” make just 50 percent of the vehicles it had previously hoped to this year, unless it is able to raise additional capital.

“What we are saying is that if we don’t get any funding, we might only make half of what we thought,” Lordstown’s chief executive, Steve Burns, said Monday during a conference call.

Mr. Burns said the company was still on track to begin making trucks by September.

Lordstown has had discussions with some strategic investors who could pump money into the company, he said, and it has looked into borrowing money by using its plant or other assets as collateral.

He also said the company was looking into borrowing from a federal government program meant to support the development of electric vehicles, but it was unclear if it had any funds left.

Lordstown would be able to make as many as 2,200 trucks by the end of the year if it gets funding, Mr. Burns said. Without additional capital, it would probably make fewer than 1,000.

Mr. Burns has been hoping Lordstown would be the first to produce an electric pickup truck aimed at commercial fleets such as large construction and mining companies, but it will soon face some formidable competition. Ford Motor last week unveiled an electric version of its F-150 pickup that is supposed to go on sale next spring.

Lordstown gained attention because it bought an auto plant in Lordstown, Ohio, that General Motors had closed. It was also once hailed by former President Donald J. Trump for saving manufacturing jobs.

It became a publicly traded company last year by merging with a special purpose acquisition vehicle, a company set up with cash from investors and a stock listing. Several other electric vehicle and related businesses have gone public through similar mergers in recent months, taking advantage of investors’ desire to find the next Tesla.

Lordstown, which is being investigated by the Securities and Exchange Commission, said it lost $125 million in the first quarter of 2021, but ended the period with $587 million in cash.

Commuters inside a Berlin subway station earlier this month. A survey found rising confidence in the German economy.Credit…Emile Ducke for The New York Times

  • Stocks continued an upswing on Tuesday, pushed higher by strength in Asian markets and growing confidence in a European economic recovery. And Bitcoin steadied.

  • The S&P 500 index was set to open 0.4 percent higher when markets begin trading in the United States. It gained 1 percent on Monday.

  • The Stoxx Europe 600 index rose 0.4 percent, the fourth-straight day of increases. The Hang Seng in Hong Kong closed 1.8 percent higher and the CSI 300 in China rose 3.2 percent, the biggest one-day increase since July. Overseas investors bought a record amount of Chinese shares on Tuesday, Bloomberg reported, amid a crackdown on rising commodity prices by Chinese officials.

  • Oil prices fell. Futures on West Texas Intermediate, the U.S. benchmark, dropped 0.7 percent to $65.61 a barrel.

  • After a turbulent weekend, the price of a Bitcoin was above $37,000 on Tuesday morning. The cryptocurrency had dropped as low as about $31,000. Ray Dalio, the founder of hedge fund Bridgewater Associates, said Bitcoin’s “greatest risk is its success.” Speaking at a CoinDesk conference in a video released on Monday, Mr. Dalio said that as Bitcoin becomes a “bigger deal and more of a threat,” it could become an existential risk to other financial markets and governments unable to control it. He added he’d rather own Bitcoin than government bonds.

  • Lordstown Motors, the start-up aiming to make electric pickup trucks, dropped more than 12 percent in premarket trading after it said on Monday that it would “at best” make half of the vehicles it had hoped to this year, unless it is able to raise additional capital.

  • An improving outlook for the German economy is taking hold. A survey of German business managers on their expectations for the economy over the next six months showed increasing optimism in May, with the ifo Institute’s index rising to 102.9 points, the highest since 2011. Separately, the national statistics office confirmed that gross domestic product fell 1.8 percent in the first quarter, a period during which Germany was in different degrees of lockdown, compared with the previous quarter.

Credit…Shira Inbar

After years of hype, billions of dollars of investments and promises that people would be commuting to work in self-driving cars by now, the pursuit of autonomous cars is undergoing a reset.

Expectations are that tech and auto giants could still toil for years on their projects. Each will spend an additional $6 billion to $10 billion before the technology becomes commonplace — sometime around the end of the decade, according to estimates from Pitchbook, a research firm that tracks financial activity. But even that prediction might be overly optimistic, The New York Times’s Cade Metz reports.

So what went wrong? Some researchers would say nothing — that’s how science works. You can’t entirely predict what will happen in an experiment. The self-driving car project just happened to be one of the most hyped technology experiments of this century, occurring on streets all over the country and run by some of its most prominent companies.

Companies like Uber and Lyft, worried about blowing through their cash in pursuit of autonomous technology, have tapped out. Only the most deep pocketed outfits like Waymo, which is a subsidiary of Google’s parent company, Alphabet; auto industry giants; and a handful of start-ups are managing to stay in the game

Late last month, Lyft sold its autonomous vehicle unit to a Toyota subsidiary called Woven Planet in a deal valued at $550 million. Uber offloaded its autonomous vehicle unit to another competitor in December. And three prominent self-driving start-ups have sold themselves to companies with much bigger budgets over the past year.

President Biden is under pressure to redirect assistance for state, local and tribal governments to instead pay for parts of a potential bipartisan agreement on upgrading the United States’ infrastructure.Credit…Stefani Reynolds for The New York Times

President Biden and congressional Democrats went to the mat this winter to secure $350 billion in assistance for state and local governments in their $1.9 trillion stimulus package. The aid was meant to help them rehire laid off government workers, invest in infrastructure projects and repair balance sheets damaged by the pandemic.

But it increasingly looks like many states — especially ones run by Democrats, with relatively high taxes on high earners — don’t need the money. California officials expect a $15 billion surplus this fiscal year. Virginia has seen nearly $2 billion in unanticipated revenues. In Oregon, economists recently upgraded the state’s revenue forecasts, moving the state from projected deficits to surplus.

The tax revenues are coming from a rebounding economy and soaring stock market, and raising pressure on Mr. Biden to repurpose hundreds of billions of dollars of federal spending approved earlier this year, The New York Times’s Jim Tankersley and Alan Rappeport report.

Republicans in Congress have urged Mr. Biden to redirect assistance for state, local and tribal governments to instead pay for roads, bridges and other portions of a potential bipartisan agreement on upgrading America’s infrastructure. Some economists and budget experts support that push. White House officials haven’t said whether they would be willing to redirect that spending, mindful that some states, like tourism-dependent Hawaii, still face large budget shortfalls.

“Popular products run out and prices are still higher than we’d like to see them,” said Jeff Brown, executive director of New Jersey’s Cannabis Regulatory Commission.Credit…Mohamed Sadek for The New York Times

The advent of legalized adult-use marijuana in New York and New Jersey is an entrepreneur’s dream, with some estimating that the potential market in the densely populated region will soar to more than $6 billion within five years.

But the rush to get plants into soil in factory-style production facilities underscores another fundamental reality in the New York metropolitan region: There are already shortages of legal marijuana, The New York Times’s Tracey Tully reports.

Within New Jersey’s decade-old medical marijuana market, the supply of dried cannabis flower, the most potent part of a female plant, has rarely met the demand, according to industry lobbyists and state officials. At the start of the pandemic, as demand exploded, it grew even more scarce, patients and business owners said.

The supply gap has narrowed as the statewide inventory of flower and products made from a plant’s extracted oils more than doubled between March of last year and this spring. Still, patients and owners say dispensaries often sell out of popular strains.

Because marijuana is illegal under federal law and cannot be transported across state lines, marijuana products sold in each state must also be grown and manufactured there.

Federal banking law also makes it nearly impossible for cannabis-related businesses to obtain conventional financing, creating a high hurdle for small start-ups and a built-in advantage for multistate and international companies with deep pockets.

Oregon, which issued thousands of cultivation licenses after legalizing marijuana six years ago, has an overabundance of cannabis. But many of the other 16 states where nonmedical marijuana is now legal have faced supply constraints similar to those in New York and New Jersey as production slowly scaled up to meet demand.

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Business

Fed Initiatives Persistence Whilst Financial Outlook Brightens

Fed Projects Patience Even as Economic Outlook Brightens

Federal Reserve officials on Wednesday signaled that they are in no hurry to recall support for a pandemic-damaged economy and released new forecasts showing the central bank’s key interest rate will be held near zero for years to come – even if it does. The outlook is improving rapidly.

After a painful 2020 in which the Fed pledged to do everything possible to prevent permanent virus-induced economic damage, the decision underscored that the political response has entered a new phase: while it lasts.

Fed officials, who cut their key interest rate to near zero last March, maintained that setting on Wednesday, as was widely expected. If you hold the bottom, it will lower the cost of borrowing, fuel demand, and fuel growth across the economy.

But their new predictions sent a remarkably patient message about the road ahead. Most policymakers expected interest rates to stay close to zero through 2023, despite targeting faster growth, rapidly falling unemployment, and inflation rising above 2 percent.

By continuing to promise aid in the face of the brightening prospects, the central bank underscored its top priorities, which are to bring the labor market back to full health and to sustainably raise prices, which have been sluggish for years. And it became clear that it’s more about holding up to the recent boom than warnings that inflation could get out of hand.

“We are determined to give the economy the support it needs to return as quickly as possible to a state of maximum employment and price stability,” said Jerome H. Powell, chairman of the Fed, during a news conference Wednesday. This help will continue “as long as possible”.

Fed officials in their post-meeting statement noted that some parts of the economy were improving, and Powell said Covid-19 vaccines and fiscal incentives had been driving his colleagues’ sunnier economic expectations. But he also pointed out that the unemployment rate remained high and that 9.5 million jobs that had disappeared during the pandemic were still missing in the economy.

“It’s just a lot of people going back to work, and it’s not going to happen overnight – it’s going to take time,” Powell said. “The faster the better. We’d like to see it sooner rather than later.”

Fed officials now expect unemployment to fall to 4.5 percent this year as growth rises, a faster decline than previously thought, and inflation to fall to 2.4 percent by 2021 before it subsides. You can see that it is 2.1 percent by the end of 2023.

Their willingness to allow higher inflation without reacting to it confirms the central bank’s new monetary policy approach. The Fed said last year that it would stop preemptively hike rates to curb upcoming inflation and aim for 2 percent as the average target – meaning it welcomes periods of slightly faster price gains.

“You look at their economic forecasts, they are all better,” said Priya Misra, director of global interest rate strategy at TD Securities. “They’re telling the market they’re going to let inflation rise above 2 percent.”

The publication of economic forecasts on Wednesday was closely watched on Wall Street, partly because the central bank had to digest a lot of new information and incorporate it into its political guidelines.

Since the Fed last updated its economic forecast three months ago, Congress and the White House have passed two major spending packages – a $ 900 billion bill in December and a $ 1.9 trillion measure in this month. This huge infusion of government money will put money in consumers’ bank accounts and could help avert economic damage that Fed officials were concerned about, such as bankruptcies and evictions.

The Treasury Department announced Wednesday that 90 million direct checks have been paid to individuals totaling more than $ 242 billion.

Americans are also getting vaccinations at a steady pace, which raises hopes that the pandemic will subside to the point that hard-hit service-industry companies can reopen fully at some point this year.

To add to these positive developments, coronavirus cases have eased and the unemployment rate suggests the economy continues to heal slowly. Unemployment fell to 6.2 percent in February, according to the latest data from the Labor Department, from a high of 14.8 percent in April.

But there is still a long way to go – a broader level of unemployment that Fed officials often cite is 9.5 percent – and Mr Powell has repeatedly pointed out that uncertainty remains high.

“The path of the virus remains very important,” he said, noting that new and virulent strains have emerged. “We’re not done yet and I would hate it if we lost sight of the ball before we actually finish the job.”

Congress has tasked the Fed with bringing the economy back to full employment and stable prices. Mr. Powell and his colleagues realized they wanted to see both a healthy labor market and inflation that rose slightly above 2 percent and is expected to stay there for some time before interest rates hike.

The March economic forecast showed that officials broadly expect the economy to take years to overcome these hurdles. Only seven officials have announced rate hikes by the end of 2023, while eleven have put rate hikes on hold.

The Fed also buys $ 120 billion in bonds every month. The criteria for slowing these purchases have been less clear as “substantial” further progress is needed.

Mr Powell stated on Wednesday that the Fed was not even ready to talk about when to reduce this support. If so, he said, it will signal “well before any decision to actually rejuvenate”.

The markets have been on the verge in the past few weeks. The improving economic outlook and the prospect of slightly higher inflation have pushed interest rates higher on longer-term Treasury bills. This has at times resulted in stocks swooning – stock prices tend to fall as interest rates rise – although key indices remain near record highs.

Part of that discomfort is directly related to Mr. Powell’s central bank. Investors have expected the Fed to be less patient than previously thought as the backdrop improves, bringing forward estimates of when the Fed might hike rates.

In fact, some prominent economists and commentators have warned that the heavy government spending that dwarfed the 2008 crisis response could drive prices much higher by pumping so many dollars into an already healing economy. That could force the Fed to hike rates sharply to control them.

However, the Fed has consistently downplayed these concerns, pointing out that the problem in modern times has been weak prices, which could pose the risk of prices falling completely and which hamper the Fed’s ability to cut inflation rates during troubled times. When prices go up, officials often say they have the means to deal with them.

“They want a speedy recovery, even more than usual,” said Diane Swonk, chief economist at Grant Thornton. “The Fed doesn’t want to get in each other’s way because of a temporary surge in inflation.”

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Business

Ulta shares tumble on weaker-than-expected outlook, retailer faucets Dave Kimbell as CEO

Ulta shares tumble on weaker-than-expected outlook, retailer taps Dave Kimbell as CEO

Ulta Beauty said Thursday that fourth quarter sales and earnings were down year-over-year, hurt by weaker cosmetics sales during the pandemic.

Although the decline was less than expected, stocks fell as the beauty retailer issued a disappointing outlook for the coming year. Ulta shares fell more than 8% after the bell.

The company also announced that its CEO, Mary Dillon, is stepping down in June and will be replaced by President Dave Kimbell.

Dillon will also move to the company’s board of directors, where she plans to stay for a year.

Kecia Steelman, Ulta’s chief store operations officer, has been promoted to chief operating officer.

The company reported for the fourth quarter, versus Wall Street analysts’ expectations based on a survey by Refinitiv:

  • Earnings per share: $ 3.41, adjusted versus $ 2.35 expected
  • Revenue: $ 2.2 billion versus $ 2.08 billion expected

“The Ulta Beauty team delivered better than expected results in the fourth quarter. The strong company-wide execution of our plans coupled with improving trends in consumer demand resulted in solid results across multiple metrics including sales, transactions and profitability.” Dillon in a press release.

Ulta reported net income of $ 171.5 million, or $ 3.03 per share, for the fourth quarter, compared to $ 222.7 million or $ 3.89 per share last year.

Excluding items, Ulta earned $ 3.41 per share, beating analysts polled by Refinitiv, which was expected to $ 2.35 per share.

Net sales fell to $ 2.2 billion from $ 2.31 billion last year, beating expectations of $ 2.08 billion.

Sales in stores that have been open for at least 14 months decreased 4.8% over the last period, negatively impacted by fewer transactions. The company said transactions were down 12.2%, but the average purchase per ticket increased 8.3%.

For fiscal 2021, Ulta expects earnings between $ 8.85 and $ 9.30 per share on revenue of $ 7.2 to $ 7.3 billion. The earnings forecast includes the impact of share buybacks of approximately $ 850 million.

According to Refinitiv, analysts had expected Ulta to make $ 10.61 per share on sales of $ 7.32 billion.

Revenue in the same store is expected to be between 15% and 17%, the company said.

Ulta plans to open 40 new Netto stores and remodel around 21 stores in the coming year.

With the ongoing pandemic and slow adoption of vaccines, Ulta executives do not expect a strong rebound this year.

“While we are encouraged by the recent sales momentum, the visibility of when demand will recover remains limited. We anticipate that masking requirements and social distancing will continue to negatively impact much of 2021,” said Scott Settersten, chief financial officer from Ulta, on a conference call.

Although the beauty retailer saw makeup sales decline as more people stayed home, the company remains optimistic about the category’s long-term prospects.

“We’re seeing a renewal [and] How our guests engage with makeup behaviors, fashion, looks and style will continue to evolve, “said Kimbell.

In November, Ulta announced plans to open small cosmetics stores in hundreds of Target stores across the country to increase sales and expand reach.

The cosmetics retailer was injured due to temporary store closings during the pandemic. After reopening stores in July, the company saw a return in demand with a strong comeback for its mobile app and e-commerce website.

Read the full results publication here.

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Business

Analyst on outlook for High Glove, Malaysian glove shares

Analyst on outlook for Top Glove, Malaysian glove stocks

SINGAPORE – The recent fall in prices for Malaysian rubber glove manufacturers is “unjustified,” said an analyst who predicts further uptrend for stocks.

Top Glove, the world’s largest manufacturer of rubber gloves, was down 17.7% this year at the close of trading on Monday. The smaller colleagues Hartalega, Supermax and Kossan fell between 18% and 30%.

In comparison, the benchmark index FTSE Bursa Malaysia KLCI fell 0.9% over the same period.

Employees at Top Glove, the world’s largest glove manufacturer, will test latex glove production in a waterproof test room at one of the company’s factories in Selangor, Malaysia on February 18, 2020.

Samsul said | Bloomberg | Getty Images

“We are maintaining our overweight position in the sector as we believe the recent decline in share prices is not justified,” wrote Ng Chi Hoong, an analyst at Malaysian investment bank Affin Hwang, in a report on Monday.

The decline in Malaysian glove inventories followed a significant jump last year as the Covid-19 pandemic boosted demand for medical gloves.

Factors affecting investor confidence in the stocks include a potential decline in glove retail prices with lower demand as more people are vaccinated around the world, Ng said.

In addition, Top Glove’s plans to list in Hong Kong – the third public listing after Malaysia and Singapore – also sparked concerns that the company is raising funds in anticipation of a weaker outlook, he said.

But those concerns are likely to subside, Ng said. Here are its target prices for Malaysia’s glove inventory.

Affin Hwang’s target price for Malaysian glove stocks

Stocks Monday is over (Malaysian ringgit) Guide price (Malaysian ringgit) head
Top glove 5.04 10.10 100%
Hartalega 9.70 5 p.m. 75%
Super max 4.21 10.90 159%
Kossan 3.66 9.30 154%

Challenge to stay above pre-covid levels

The analyst said the increase in average glove retail prices was unsustainable and forecast a 30% to 35% price drop in 2022. Still, prices are likely to stay above pre-pandemic levels for at least the next two to three years. he said.

This is partly because the demand for gloves is expected to continue to grow in the coming years as the medical sector makes more personal protective equipment use, Ng said.

He added that he agreed with the report by consultants Frost and Sullivan, commissioned by Top Glove, which said demand for disposable gloves would grow an average of 15% annually for the next five years.

Such demand growth would be accompanied by a 20% annual supply increase over the next few years, Ng said.

Top Glove is planning a listing in Hong Kong

Another development that has fueled recent price moves in Malaysian glove stocks is Top Glove’s planned third listing in Hong Kong.

The company announced last month that it had applied for a “double primary listing” in Hong Kong that could raise up to 7.7 billion ringgit ($ 1.87 billion). It said it will keep its current primary listing in Malaysia and secondary listing in Singapore.

Investors reacted negatively to news that the additional listing would dilute Top Glove’s earnings per share.

Nonetheless, Ng has kept his buy recommendation for Top Glove and his Malaysian colleagues. He said the decline in stock prices had lowered valuations to levels “too cheap to ignore”.

The analyst added that Malaysian glove makers have a higher dividend yield and better return on equity compared to their international counterparts – a measure of financial performance.

Top Glove on Tuesday reported an increase in quarterly earnings to 2.87 billion ringgit ($ 695 million) for the three months ended February from 115.68 million ringgit ($ 28.03 million) a year ago.

The company said global demand for gloves continues to be “strong” as the Covid pandemic has led to an increase in glove use and hygiene awareness.

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Business

Hole (GPS) experiences This fall 2020 earnings, 2021 gross sales outlook

Gap (GPS) reports Q4 2020 earnings, 2021 sales outlook

A man walks past a store in New York City on January 12, 2021.

Angela Weiss | AFP | Getty Images

Gap Inc. on Thursday predicted a rebound in sales growth in 2021, hoping customers will soon return to their stores and spend more money on apparel as they try to resume some social activities.

Shares rose more than 3% in after-hours trading.

The apparel maker reported fourth-quarter sales that fell short of estimates as the ongoing coronavirus pandemic forced stores to close in Europe, parts of Asia and Canada. However, thanks to its efforts to sell more goods at full price and make progress, the company made a profit.

The Old Navy and Athleta brands, which focus on basics and exercise equipment, showed continued strength. However, the Gap brand of the same name and the Banana Republic label recorded a further quarter of the decline in sales.

For the quarter ended Jan. 30, Gap reported net income of $ 234 million, or 61 cents per share, compared to a loss of $ 184 million, or 49 cents per share, last year.

The last period’s earnings included a tax gain of around 45 cents per share and an impairment loss of around 12 cents per share related to Gap’s Intermix business. According to a survey by Refinitiv, analysts had asked for earnings of 18 cents per share. It wasn’t immediately clear whether analysts had considered the impact of these items.

Net sales decreased 5% from $ 4.67 billion a year ago to $ 4.42 billion. That didn’t match analysts’ estimates of $ 4.66 billion.

Gap’s sportswear brand Athleta in the same store grew 26% year-over-year and Old Navy increased 7%. However, Gap’s eponymous brand saw sales drop 6% in the same store, and Banana Republic announced that its key metric is down 22%. In-store sales is an important metric for retailers who track performance online and in stores that have been open for at least a year.

According to Gap, total online sales increased 49%, representing 46% of net sales for the quarter.

For fiscal 2021, the company is calling for an increase in net sales in mid-to-senior teens compared to 2020. This assumes the effects of Covid will continue into the first half of 2021 and the retailer will return to a normalized prior-year level – pandemic sales level in the second half, the company said.

According to Refinitiv, analysts called for sales growth of 14.1% compared to the previous year.

Earnings are expected to be between $ 1.20 and $ 1.35 per share. Analysts had expected earnings of $ 1.28 per share.

One limitation, however, is still overcrowded US ports, which results in inventory staying in transit for long periods of time. Gap said the port’s congestion is expected to continue into the first half of the year. As a result, inventory levels are expected to continue growing in the second quarter compared to last year in the high single digits.

Gap plans to open 30 to 40 Old Navy stores and 20 to 30 Athleta stores this year. And around 100 Gap and Banana Republic stores will be closed worldwide.

Gap stocks are up about 75% in the past 12 months. The company has a market capitalization of $ 9.46 billion.

The full press release from Gap can be found here.

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Business

Azek raises outlook on hopes of continued housing, transforming growth

Azek raises outlook on hopes of continued housing, remodeling boom

Building materials company Azek posted double-digit sales growth in its most recent quarterly report as a glowing real estate market continues to transition into the remodeling industry.

Demand, driven by a combination of low mortgage rates, low home ownership and increased relocation activity amid the coronavirus pandemic, makes Azek CEO Jesse Singh look optimistic over the long term.

“The focus on the home really gives us long-term advantage because we really get the benefit of people investing in their homes,” he told CNBC’s Jim Cramer in an appearance on Mad Money Friday.

Coronavirus lockdowns have spurred domestic consumers to spend more money remodeling their homes, including decks and other outdoor furnishings. The increased spending resulted in a 28% year-over-year increase in the first quarter of the fiscal year ended December 31, compared to pandemics in Azek’s sustainability-focused business.

The company, which sells recycled materials for residential and commercial buildings, had sales of $ 212.3 million compared to $ 166 million last year. The residential real estate business, which accounted for around 87% of total sales, recorded a 37% increase in sales. Azek reported earnings of $ 10 million for the quarter.

The quarterly growth also outperforms the 13% growth reported by Azek in its full year 2020 results, which ended on September 30th. Total revenue for the twelve month period was $ 899.3 million.

The Chicago-based materials maker has also improved its outlook for the current fiscal year. Management is now forecasting sales growth between 14% and 18% for the current financial year, after originally forecasting sales growth from 10% to 14%.

Given that Azek makes products primarily from recycled items, Singh said it has been protected from the surge in raw material prices, including the price of wood, to the company’s benefit. As part of its earnings report, the company also announced a goal of using 1 billion pounds of recycled scrap and waste annually to make its products by 2026.

“For us, this billion pounds is really a mission for the company,” he said. “It allows us and our employees to really focus on making a difference in the environment, and it’s also our way of making a difference in the longer term against climate change.”

Singh, who headed the company in 2016 before going public in June last year, said there are several trends in the real estate market that make him optimistic about the future, including the fact that more millennial homebuyers are entering the market come.

Azek also benefits from home upgrades. It sells products for outdoor living made from low-maintenance materials, Singh said.

Last year, the company embarked on a $ 180 million multi-year investment program to expand manufacturing capacity in the United States, including adding vendors and improving its marketing skills. Acquisitions of other companies are also on the table, said Singh.

“We are still evaluating the acquisition pipeline,” he said. “We believe there is an opportunity there to continue expanding outside of the house, maintaining our margin structure, maintaining our great value proposition, but also introducing some additive products, so we will continue to evaluate that.”

Azek’s shares closed 5% higher at $ 47.19 on Friday. The stock is up 23% so far in 2021, giving it a market valuation of $ 7.3 billion.

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Lululemon sees earnings at prime finish of outlook because of holidays

Lululemon sees earnings at top end of outlook thanks to holidays

Pedestrians seen walking past the Canadian sportswear retailer Lululemon in Shanghai.

Alex Tai | SOPA pictures | LightRocket | Getty Images

Lululemon said Monday that fourth quarter earnings and sales will now be at the high end of the previous outlook thanks to the strong performance during the vacation.

Ahead of virtual meetings with analysts and investors this week at the annual ICR conference, the company called for adjusted earnings per share growth at the high end of its previously announced mid-single-digit growth expectations. Net sales for the quarter ended Jan. 31 are expected to grow at the high end of its expectations for medium to high teens, it said in a statement.

Lululemon stock was down more than 2% on the Monday before trading. The stock is up more than 54% in the past 12 months.

“We are pleased with the momentum during the vacation because our investments in Lululemon and Mirror have enabled us to connect with guests both physically and digitally,” said CEO Calvin McDonald in a statement.

In December, Lululemon posted third-quarter sales of $ 1.1 billion, up 22% year over year.

Lululemon has not given an outlook for the full year due to the ongoing effects of the Covid pandemic.

Read the full version of Lululemon.