30 Mins Ago
Cost controls driving better-than-expected retail profits
Plenty of retail earnings beats in the past day. But thank good cost management, rather than robust sales for the strong performance.
Sales from many retailers haven’t blown Wall Street away. Although Foot Locker, Best Buy, Dollar General, Burlington Stores and American Eagle Outfitters easily topped earnings estimates, they all saw revenues that were either essentially in line or below analyst expectations.
A big reason for better-than-expected retail profits – effective cost controls and shifts in expense timing are significantly helping. American Eagle touted its “actions to optimize our operations and drive efficiencies across the organization.” Best Buy alluded to “strong execution” and its ability to “manage our profitability.” Foot Locker praised its efforts in “disciplined expense management,” but also said some expenses shifted into the next quarter. Burlington Stores echoed that saying profit margin improvements were driven by expense timing.
Lower markdowns are helping profit margins too. Foot Locker noticed markdowns moderated. Burlington Stores said gross margin improvement was “primarily driven by lower markdowns.” American Eagle cited “a more profitable clear strategy.” And earlier in the week, Abercrombie & Fitch noted it was “able to pull back on some promotions and then reduce that clearance selling,” while Dick’s Sporting Goods “didn’t see an unusually promotional environment.”
— Robert Hum
An Hour Ago
Stocks open lower
The three major indexes kicked off Thursday’s session down.
The Dow slid more than 300 points, or around 0.8%, shortly after 9:30 a.m. ET. The S&P 500 and Nasdaq Composite each slipped 0.3%.
— Alex Harring
An Hour Ago
Metals take a hit, copper enters correction territory
Metal prices took a hit as investors around the world fretted over persistent inflation and the possibility that the Federal Reserve may not be able to cut interest rates this year, as was widely expected when 2024 began.
Copper futures, an industrial metal often seen as a gauge on the global economy, dropped 3% and entered correction territory, down 10% from their 52-week high. Silver and palladium also lost 2.3% and 2.6%, respectively.
See Chart…
Copper futures in past year
An Hour Ago
GDP grew less than initially thought in first quarter; inflation reading eases
Economic growth in the first three months of the year was lower than initially estimated, but so was a key inflation indicator, according to a Commerce Department report Thursday.
Real gross domestic product accelerated at a 1.3% annualized rate in the first quarter, down from the initial 1.6% estimate but a bit bitter than the 1.2% Dow Jones forecast. A reduction on consumption, from 2.5% growth to 2%, accounted for much of the downward revision.
On inflation, the chain-weighted price index, which accounts for adjustments in consumer behavior, rose 3% for the period, 0.1 percentage point lower than the first estimate. Economists had been looking for 3.1%.
In other economic news, the Labor Department reported that initial unemployment claims totaled 219,000 for the week that ended May 25, up 3,000 from the previous period but close to the forecast for 218,000. Continuing claims nudged higher to 1.791 million.
— Jeff Cox
An Hour Ago
Stocks making the biggest moves before the bell: Salesforce, Kohl’s and more
These are the stocks moving the most in premarket trading:
- Salesforce — Shares of the cloud software vendor plunged 16% after the company reported weaker-than-expected revenue and issued guidance that trailed Wall Street’s expectations.
- Kohl’s — Shares plunged 20% after the department store chain posted a first-quarter loss of 24 cents per share, whereas analysts had expected a gain of 4 cents, according to LSEG.
- Foot Locker — Shares rallied more than 12% in the premarket after the apparel and sneaker retailer reported first-quarter earnings that beat expectations.
Read the full list of stocks moving here.
— Lisa Kailai Han
An Hour Ago
Retailers continue to bet on a solid second half of the year
Better-than-expected earnings from Dollar General, Best Buy and Foot Locker this morning, along with American Eagle Outfitters yesterday afternoon.
But despite all those earnings beats, those retailers only reaffirmed their full year guidance. Over the past few weeks, several retailers have hinted at an expected lull in second quarter performance that will offset strong first quarter results. That has also given the implication that retailers are counting on solid results in the back half of the year.
Yet, there’s still a sense of cautious optimism for the rest of the year. Even though it raised earnings guidance largely on the heels of strong first quarter results, Burlington Stores this morning only reaffirmed its same-store sales outlook for the year saying that “it makes sense to be cautious” given all the macro uncertainty.
— Robert Hum
2 Hours Ago
Kohl’s plunges on soft earnings and guidance
Kohl’s dropped around 20% before the bell on Thursday in the wake of weak earnings and guidance.
The retailer posted an unexpected loss of 24 cents per share in its first quarter, while analysts polled by LSEG anticipated 4 cents earned a share. Revenue came in at $3.18 billion, less than the $3.34 billion consensus estimate on Wall Street.
Kohl’s also said that full-year sales should slide more than the Street expected. Meanwhile, the Wisconsin-based department store chain offered a lighter-than-expected outlook for per-share earnings in the year.
Shares have slid around 5% so far in 2024.
— Alex Harring
3 Hours Ago
Foot Locker rallies after earnings beat
Foot Locker shares rallied more than 12% in the premarket after the apparel and sneaker retailer reported first-quarter earnings that beat expectations. The company posted an adjusted profit of 22 cents per share, while analysts polled by LSEG expected earnings of 12 cents per share.
“We had a solid start to the year in the first quarter, which demonstrates that our ‘Lace Up Plan’ is working,” CEO Mary Dillon told CNBC in an interview.
— Fred Imbert
4 Hours Ago
Nelson Peltz sells entire Disney stake
Nelson Peltz sold his entire stake in Disney, a person familiar with the matter told CNBC, just weeks after Trian Partners lost a proxy battle against the media giant. Peltz sold his stock at about $120 per share, making about $1 billion on the position.
Disney shares were little changed in the premarket Thursday.
— Fred Imbert
7 Hours Ago
Europe stocks open slightly lower
European stock markets opened lower Thursday, though they moved just below the flatline in early deals as sectors spread between losses and gains.
France’s CAC 40 moved 0.14% higher while Germany’s DAX and the U.K.’s FTSE 100 fell by 0.24% and 0.1%, respectively.
See Chart…
Stoxx 600 index.
9 Hours Ago
China reportedly weighing record fine against PwC for Evergrande audit
China is thinking of imposing a record 1 billion yuan ($137.94 million) fine against accounting firm PricewaterhouseCoopers for its role in auditing embattled property developer China Evergrande, according to Bloomberg.
The report adds that some of PwC’s local operations could be suspended.
China’s Ministry of Finance may announce the penalties on PwC as soon as this week, Bloomberg reported, citing people familiar with the matter.
The reported fine is set to exceed the previous record of 212 million yuan for an accounting firm, given to Deloitte Touche Tohmatsu in 2023.
— Lim Hui Jie
12 Hours Ago
Australian miners slip as BHP walks away from Anglo American takeover plan
Shares of Australian miners fell after mining giant BHP walked away from its £38.6 billion ($49 billion) plan to take over rival Anglo American.
In a regulatory filing, BHP said that while it believed that its takeover bid was “a compelling opportunity to effectively grow the pie of value for both sets of shareholders,” it was unable to reach agreement with Anglo American, specifically in respect of South African regulatory risk and cost.
BHP had made two earlier offers at £31.1 billion in April, and a £34 billion offer on May 14.
Shares of BHP lost 1.73%, while counterparts Rio Tinto and Fortescue Group dropped 1.34% and 2.27% respectively.
13 Hours Ago
Nikkei falls more than 2% on open, dragged by consumer cyclical and industrial stocks
Japan’s Nikkei 225 fell more than 2% on its open on Thursday, dragged lower by health-care, consumer cyclical and industrial stocks.
The largest loser on the index was semiconductor equipment firm Advantest, which fell 5.8%.
Mitsubishi Electric, the electrical manufacturing subsidiary of heavyweight trading house Mitsubishi, fell by nearly 5%. Other top losers include Tokyo Electric Power Company which fell 4.7% and medical device maker Terumo, which lost 4.25%.
15 Hours Ago
Salesforce by itself is poised to slice 281 points off the Dow Industrials at Thursday’s open
Salesforce Inc. is poised to chop 281 points off the Dow Jones Industrial Average at Thursday’s market open, based on its postmarket decline of almost $43 in after-hours trading Wednesday.
Salesforce is slumping after its second-quarter forecasts for revenue and earnings per share fell short of analysts’ consensus estimates, according to FactSet data.
Because the Dow is weighted by price, every dollar change in any component stock moves the average up or down by about 6.6 points. Meaning Salesforce’s $42.60 loss would equal a 281-point decline come Thursday morning.
— Scott Schnipper
15 Hours Ago
Nelson Peltz sells entire Disney stake following proxy battle defeat
Activist investor Nelson Peltz sold his entire stake in Disney, a person familiar with the matter tells CNBC.
Peltz sold all of his Disney stock at around $120 a share, making around $1 billion on the position.
The exit comes weeks after Peltz’s Trian Partners lost a proxy battle at Disney in early April as shareholders reelected the company’s full slate of board nominees. Peltz had been seeking to elect himself and former Disney Chief Financial Officer Jay Rasulo to the company’s board.
Disney shares slipped 0.2% Thursday during post market trading.
The full list can be found here.
— Hakyung Kim, Sara Salinas, Scott Wapner
16 Hours Ago
Salesforce’s super rare revenue miss & poor guidance send shares plunging
Although earnings from Salesforce beat analyst estimates by 6 cents, first quarter revenues fell short of expectations. That’s sending shockwaves through Wall Street as it’s the tech giant first revenue miss since February 2006, using information from earnings data firm LSEG.
Compounding the disappointing top line results is weak second quarter revenue and earnings guidance. Shares of the blue chip stock are plunging 17% on the news. That move alone would push the Dow Industrials down 315 points if Salesforce stock’s current losses hold at Thursday’s market open.
— Robert Hum
16 Hours Ago
Stocks making the biggest moves after hours
Check out the companies making headlines in extended trading:
Salesforce — Shares plunged more than 14% after first-quarter revenue of $9.13 billion missed consensus estimates of $9.17 billion, according to LSEG. Adjusted earnings of $2.44 per share beat a consensus estimate of $2.38, but current-quarter guidance fell below estimates on both top and bottom lines.
UiPath — The software company tanked 30% after saying its CEO Rob Enslin will resign, effective June 1. He will also be stepping down from the board of directors. Daniel Dines, former CEO of UiPath and current chief innovation officer, will return to the helm.
HP Inc. — The manufacturer of personal computers rose 3%. HP posted adjusted earnings of 82 cents per share on revenue of $12.8 billion in its fiscal second quarter, above analysts’ estimates of 81 cents a share and revenue of $12.6 billion, according to LSEG.
The full list can be found here.
— Hakyung Kim
16 Hours Ago
Stock futures open lower Wednesday
U.S. stock futures opened negative Wednesday evening.
Futures tied to the Dow Jones Industrial Average declined 258 points, or 0.7%.
S&P 500 and Nasdaq-100 futures fell 0.2% each.
— Hakyung Kim
Source: Dow loses 300 points as Salesforce shares drop: Live updates