Connect with us

CNBC

Jobless claims better than expected last week and lowest in two months

New jobless claims totaled 779,000 last week, the lowest since late November and below the Dow Jones estimate for 830,000.

Published

on

New claims for jobless benefits came in a bit less than expected last week though U.S. employment gains remain sluggish.

First-time claims for unemployment insurance totaled 779,000 for the week ended Jan. 30, the Labor Department reported Thursday. That was below the 830,000 estimate from economists surveyed by Dow Jones.

The reading was the lowest since Nov. 28 as the U.S. economy continues its slow recovery from the Covid-19 pandemic.

The total represented a drop of 33,000 from the previous week’s downwardly revised count of 812,000.

Continuing claims also continued to drift lower, falling 193,000 from the previous reporting week to 4.6 million. The pandemic-era peak for continuing claims was 24.9 million in early May. Continuing claims data runs a week behind first-time claims.

In addition, the total of those receiving benefits fell sharply, dropping by nearly half a million to 17.8 million. That reflects a continuing decline of those getting benefits under pandemic-related programs that were slightly offset by those on extended benefits.

With unemployment still elevated, the Biden administration is working on a plan to push through additional stimulus checks to Americans as well as enhanced compensation.

Last week’s drop in claims came largely due to a decline of more than 55,000 in Illinois, though much of that drop was offset by a gain of more than 46,000 in California, according to unadjusted numbers.

The report comes ahead of Friday’s Labor Department release of the nonfarm payrolls count for January. The Dow Jones estimate for that total is 50,000, with the unemployment rate holding steady at 6.7%.

Though the labor recovery has a long way to go, there have been some encouraging signs lately. ISM reports on manufacturing and services indicated that companies are adding workers, while ADP’s private payrolls count released Wednesday showed a better-than-expected growth of 174,000.

In other economic news Thursday, fourth-quarter productivity fell 4.8% at an annualized rate, worse than the estimate for a 2.8% drop, while unit labor costs rose 6.8%, above the 5% estimate.

The total represented a drop of 33,000 from the previous week’s downwardly revised count of 812,000.

Source: https://www.cnbc.com/2021/02/04/us-weekly-jobless-claims.html

CNBC

Lululemon first-quarter sales rise 88%, topping estimates, as store traffic rebounds

Lululemon on Thursday reported fiscal first-quarter revenue that soared 88%, topping analysts’ estimates, as shopper traffic steadily rebounded to its stores.

Published

on

Pedestrians wearing protective masks walk past a Lululemon store in San Francisco, California, on Monday, March 29, 2021.

David Paul Morris | Bloomberg | Getty Images

Lululemon Athletica said Thursday its fiscal first-quarter revenue soared 88%, topping analysts’ estimates, as shopper traffic steadily rebounded to its stores.

The athletic apparel maker also issued a strong forecast for its fiscal second quarter and raised full-year estimates, saying momentum for its brand is growing across all geographies.

Its stock rose less than 1% on the news in extended trading.

Here’s how Lululemon did for the period ended May 2, compared with what analysts were anticipating, based on a Refinitiv survey:

  • Earnings per share: $1.16 adjusted vs. 91 cents expected
  • Revenue: $1.23 billion vs. $1.13 billion expected

Net income grew to $145 million, or $1.11 per share, from $28.6 million, or 22 cents per share, a year earlier. Excluding one-time charges, Lululemon earned $1.16 a share, better than the 91 cents per shares that analysts estimated.

Revenue rose to $1.23 billion from $652 million a year earlier, when its stores were temporarily shut. That came in ahead of expectations for $1.13 billion.

On a two-year basis, sales grew 57%. Lululemon also said its men’s business grew faster from 2019 levels than its women’s.

The Covid pandemic has fueled shopper demand for fitness gear to wear around the house and to dress for at-home workouts such as running and spin biking. The trend, which hasn’t appeared to slow down, has benefited companies including Lululemon, Nike and Under Armour. It has also boosted more traditional retailers such as Gap, which recently said activewear sales continue to drive sales at both its Athleta and Old Navy banners.

Lululemon’s direct-to-consumer revenue climbed 55% to $545.1 million year over year. Sales in North America were up 82% and increased 125% internationally.

CEO Calvin McDonald told analysts Thursday that Lululemon still expects its international business will grow in size to be equal to its North American operations in the near future. At the end of 2020, international sales represented only 14% of Lululemon’s total business.

The company also owns the at-home fitness platform Mirror, a rival to Peloton. Lululemon expects Mirror to drive between $250 million and $275 million in revenue this year.

CFO Meghan Frank said momentum has remained strong in recent weeks. The company continues to invest in innovative merchandise to drum up excitement. It recently launched a line of products that use lower-impact dyes, and it is piloting a trade-in and resale program.

For its fiscal second quarter, Lululemon expects adjusted earnings per share to be in a range of $1.10 to $1.15, on sales of $1.3 billion to $1.33 billion. Analysts had been looking for earnings of $1.01 per share on revenue of $1.20 billion, according to a Refinitiv survey.

For the year, it’s calling for adjusted earnings of $6.73 to $6.86 per share, on sales of $5.83 billion to $5.91 billion. Analysts expected it to earn $6.48 per share on sales of $5.68 billion.

Previously, Lululemon had been calling for fiscal 2021 revenue to be in a range of $5.55 billion to $5.65 billion.

“We were performing well before the pandemic, I think we led the peer group during the pandemic, and we’re excited about … our ability to continue to perform post-pandemic,” McDonald said.

Lululemon shares are down about 9% year to date. It has a market cap of $41.4 billion.

Find the full earnings press release from Lululemon here.

Here’s how Lululemon did for the period ended May 2, compared with what analysts were anticipating, based on a Refinitiv survey:

Source: https://www.cnbc.com/2021/06/03/lululemon-lulu-reports-q1-2021-earnings.html

Continue Reading

CNBC

Stitch Fix shares soar as sales top estimates, styling service raises full-year outlook

Stitch Fix’s sales topped analysts’ estimates, driven by consumers refreshing their wardrobes and looking for styles in new sizes.

Published

on

The Stitch Fix application for download in the Apple App Store on a smartphone arranged in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Stitch Fix Inc. is scheduled to release earning on June 7.

Tiffany Hagler-Geard | Bloomberg | Getty Images

Stitch Fix shares soared Monday after the online shopping and styling service reported a narrower-than-expected loss in its fiscal third quarter.

Sales topped analysts’ estimates, driven by consumers refreshing their wardrobes for summer vacations and the office and looking for styles in new sizes.

The stock was recently up around 15% in extended trading.

Stitch Fix also raised its revenue outlook for the full year, after previously lowering it due to the uncertainty stemming from the Covid pandemic. It offered a better-than-expected sales outlook for its fiscal fourth quarter.

President and incoming CEO Elizabeth Spaulding noted that as the apparel retail backdrop improves across the country, the company is building momentum. In its men’s business, for example, button-down shirts are trending and suit requests are back up. Stitch Fix said its tailored shop is outperforming its lounge selection.

Here’s how Stitch Fix did during the period ended May 1 compared with what analysts were anticipating, using Refinitiv estimates:

  • Loss per share: 18 cents vs. 27 cents expected
  • Revenue: $535.6 million vs. $511 million expected

Stitch Fix’s loss narrowed to $18.8 million, or 18 cents per share, compared with a loss of $33.9 million, or 33 cents per share, a year earlier. That was better than the 27 cent loss expected by analysts.

Revenue grew 44% to $535.6 million from $371.7 million a year earlier, topping estimates for $511 million.

Its active client count grew 20% year over year to 4.1 million and was up 234,000 from the previous quarter. Stitch Fix defines active clients as people who have bought an item directly from its website in the preceding 52 weeks from the last day of the quarter.

Revenue per active client came in at $481, down 3% from a year earlier but up 3% from the prior quarter.

For fiscal 2021, Stitch Fix is now calling for revenue to be in the range of $2.07 billion to $2.08 billion, which would imply year-over-year growth of 20.9% to 21.5%. Earlier this year, it had lowered its annual sales forecast for growth of 18% to 20%. Analysts have been looking for year-over-year revenue growth of 19.1%.

For the fourth quarter, it expects sales to be up 21.8% to 24% from a year earlier. Analysts had been looking for a 20.6% increase.

The company is still working to improve the window of time it takes for it to receive orders of merchandise to its warehouses, which were elongated over the holiday season and have weighed on recent results. CFO Dan Jedda said Monday that the shipping windows have come back down to pre-holiday levels, but remain heightened compared with a year earlier.

Before the end of its fiscal year, Stitch Fix is set to launch its direct-buy service, which allows customers to purchase items individually from its app, to the public. Currently, only subscribers can use the direct-buy service. Stitch Fix has said the offering is an evolution of its business that should help it to continue to grow sales and reach new users.

Spaulding is set to succeed founder and CEO Katrina Lake on Aug. 1.

As of market close Monday, Stitch Fix shares are down about 1% year to date. The company’s market cap is $6.2 billion.

Find the full financial press release from Stitch Fix here.

Sales topped analysts’ estimates, driven by consumers refreshing their wardrobes for summer vacations and the office and looking for styles in new sizes.

Source: https://www.cnbc.com/2021/06/07/stitch-fix-sfix-reports-q3-2021-results.html

Continue Reading

CNBC

GM, Ford are all-in on EVs. Here’s how their dealers feel about it

As automakers including Ford and GM invest heavily in electric vehicles to catch Tesla, dealerships enter the EV future, and business models being tested.

Published

on

A sign is unveiled at General Motors Detroit-Hamtramck Assembly on Oct. 16, 2020, introducing the facility’s new name: Factory Zero, Detroit-Hamtramck Assembly Center.

GM

After years of come-and-gone predictions that battery-powered sedans, pickups and SUVs would replace gas-guzzling, emissions-spewing models, the shift to electric vehicles is revving up. Beyond EV pioneer and market leader Tesla, virtually every major auto manufacturer is lining up to flip the e-switch and it is not just a big deal for consumers, but the thousands of auto dealerships across the country that will need to embrace the electric future.

General Motors has said it’s aiming to produce only EVs by 2035, with 30 new plug-in models arriving by 2025, marking a $27-billion investment. Ford, which previously committed $22 billion to EV development, just announced that 40% of its vehicles will be electrified by 2030. Toyota, Volkswagen, Daimler, Hyundai, Fiat Chrysler, Honda and other automakers are making similar pledges.

In preparation for this onslaught of new models, franchise car dealers in the U.S. — many of them longtime small businesses located in suburban and rural communities — are gearing up. Salespeople are getting ready to put you in an EV today. And because EVs have fewer moving parts, service technicians are being trained to maintain them.

“EVs are the big issue right now,” said Mark Paladino, general manager of Colonial Ford in Danbury, Connecticut, and a 40-year veteran in the business. He was still excited about Ford’s debut of the F-150 Lightning pickup, an all-electric version of the best-selling vehicle line in the nation for four decades running.

Ford F-150 Lightning ‘beyond expectations’

Paladino’s excitement is warranted, considering that Ford.com tallied 70,000 reservations for the Lightning within the first week of its official release on May 19, with $500 deposits plunked down for each, reported Jason Mase, Ford’s cross vehicle marketing manager. “Nearly 70% of those customers were new to Ford, 90% ordered the highest trim level and 80% ordered the extended-range battery,” he reported. “It was beyond our expectations.”

Colonial is one of 2,300 Ford dealers, among a total of roughly 3,000, that have volunteered to become EV-certified, an investment that entails training sales and service personnel, upgrading battery-charging stations and purchasing special equipment, parts and tools. The remaining third have thus far opted out of spending nearly $50,000 for the certification. Other manufacturers are asking for upwards of $300,000 for the designation.

“We were all in right away,” Paladino said, adding that the family-owned dealership was previously trained on several gas-electric hybrid models, as well as Ford’s first-ever EV, the 2021 Mustang Mach-E SUV, introduced in December. “We see EVs as a part of our business that will only get larger, and we want to be in that world.”

EVs comprise less than 3% of overall new-car sales in the U.S. Tesla has dominated the market, making up about about 55% of it, according to Credit Suisse — though that’s down from 72% a few months ago, reflecting the growth in competition.

Although EVs now represent only a fraction of the U.S. automotive fleet, they “are eventually going to become a significant part of a car retailer’s business,” said Chris Sutton, vice president of automotive retail for market research firm J.D. Power.

A Bloomberg New Energy Finance report estimated that by 2040, EVs will account for 58% of worldwide passenger vehicle sales, with China, Europe and the U.S., respectively, leading the pack.

“By providing their sales and service expertise, and as an education resource for customers, they add value to automakers,” Sutton said of dealerships. Though he added that because EV sales to date have been concentrated in coastal states, Michigan and Texas, many dealers elsewhere remain in wait-and-see mode.

Two-thirds of car consumers interested in EVs

In addition to manufacturers’ ambitious targets, the Biden administration has proposed spending nearly $42 billion to build out the nation’s EV battery-charging infrastructure, gas prices have inched up and ExxonMobil’s shareholders elected three climate-friendly directors supported by an activist investing group to its board. Support for Biden’s infrastructure spending plan, however, to which EV infrastructure spending is tied, remains uncertain.

Car dealers are focused on the here and now. They should be heartened, then, by a Cars.com survey that reveals two-thirds of Americans are interested in buying an EV, despite barriers such as higher sticker prices than internal combustion engine (ICE) models and the paucity of charging stations. Plus, some EVs still qualify for a $7,500 federal tax credit, while states such as California, New Jersey and New York offer additional rebates up to $5,000.

These data help explain why the 17,000 members of the National Automobile Dealers Association (NADA) “can’t wait for EV products to get here,” said NADA President and CEO Mike Stanton. “Dealers are in the business of selling cars and making customers happy, so why wouldn’t they want to sell EVs?” he said, dismissing reports of lackluster enthusiasm among dealers.

Political support for climate change policies vary across the nation, and in the past year support has been dropping among Republicans for the federal government making action on clean energy a top priority, according to a recent survey conducted by the Yale Program on Climate Change Communication and George Mason Center for Climate Change Communication. But considerable support remains among conservatives for providing tax rebates to people who purchase energy-efficient vehicles or solar panels: 78% of moderate Republicans and 60% of conservative Republicans. It was the only “climate-friendly energy policy” in the survey which a majority of both moderate Republican and conservative Republican registered voters support.

EV service will definitely evolve and won’t be exactly the same. … No one is panicking about it, but we know it’s going to change over time, so we’re working with our dealers on that.

Travis Hester, GM’s chief electric vehicle officer

One genuine concern for dealers, however, is the fact that EVs don’t require oil changes, transmission repairs and other service owners of ICE vehicles routinely bear — and that account for 50% of dealers’ gross profits. A 2019 report from AlixPartners estimates that dealers could see $1,300 less revenue in service and parts over the life of each EV they sell.

Even though 70% of aftermarket service of ICE vehicles is handled by independent shops, franchise dealers don’t want to cede EVs to them, especially as consumers familiarize themselves with battery charging and other peculiarities. “The EV owner might trust the dealers more to perform service than the aftermarket shops earlier in their ownership period,” Sutton said.

The service element doesn’t necessarily worry Rita Case, CEO of Rick Case Automotive Group in Ft. Lauderdale, which represents VW, Hyundai, Honda, Audi, Mazda and other brands at its dealerships in south Florida and Atlanta. “EVs need tires, brakes, batteries, lights and some steering and drivetrain maintenance,” she stated. Rick Case Auto is already selling and servicing a limited number of EVs and hybrids, but “within the last six months we’ve ramped up EV training for our salespeople and technicians and purchased new charging equipment” in anticipation of increased consumer demand for new electric models, Case said.

The 2024 GMC Hummer EV SUV and 2022 GMC Hummer EV sport utility truck, or SUT.

GM

GM has been readying its 4,100 franchise dealers over the past year, not only for the refreshed Chevrolet Bolt — an early EV entrant that has gone through a recent design — but also the upcoming electric GMC Hummer and the Cadillac Lyriq. “Service is critical to what our dealers do today and will be in the future,” said Travis Hester, GM’s chief electric vehicle officer. “EV service will definitely evolve and won’t be exactly the same” compared to that for ICE vehicles, he said, noting that some EV parts may last 10 to 15 years. “No one is panicking about it, but we know it’s going to change over time, so we’re working with our dealers on that.”

Meanwhile, Paladino can’t keep up with Colonial Ford’s conventional service demands. “We’re booking and servicing every vehicle we can,” he said. “Right now, I’m three weeks out in servicing your car.”

Online auto sales threat

Another issue on dealers’ minds is direct-to-consumer (D2C) sales, the business model that’s fueled Tesla’s marketing of more than 385,000 EVs on U.S. roads to date. Tesla does operate about 130 company-owned showrooms, yet sales are transacted online. At last count, 33 states allowed D2C auto sales, with others’ legislatures debating bills that would bypass the so-called franchise system that has legally connected dealers and manufacturers for more than a century. NADA, states’ dealer groups and traditional automakers have advocated maintaining the franchise system, claiming that it levels the playing field.

Then again, online marketing is nothing new to car manufacturers and dealers. Every brand maintains a website where shoppers can peruse models and pricing, and even custom design a new car. But they’re ultimately referred to a local dealer, who completes the transaction and aims to establish a loyal relationship that includes routine maintenance, service and perhaps a future sale.

Generating foot traffic — the proverbial “kicking the tires” routine — is the lifeblood of dealers’ business models, so to survive they will have to adjust to consumers’ appetite for buying directly online, a routine that only expanded during the pandemic. That means letting manufacturers take reservations and deposits online, as Ford and other manufacturers are doing, and finding ways to attract and foster long-term relationships with a new generation of EV drivers, such as special test-drive events, on-site charging and mobile service techs who make house calls. “The dealer network has been around for a long time because they are able to pivot to where the market is and what customers expect and require,” Sutton said.

The auto industry is at an inflection point in the transition to EVs, and dealers large and small will have to pivot once again. “If you’re going to play in the EV sector, you’ve got embrace it now — the charging infrastructure, the parts, the equipment, the labor,” Paladino said.

While Case is waiting for greater demand for EVs, she’s “super positive” about the future. “I’m in the business of selling cars, and one thing I know for sure is people are going to want cars.”

General Motors has said it’s aiming to produce only EVs by 2035, with 30 new plug-in models arriving by 2025, marking a $27-billion investment. Ford, which previously committed $22 billion to EV development, just announced that 40% of its vehicles will be electrified by 2030. Toyota, Volkswagen, Daimler, Hyundai, Fiat Chrysler, Honda and other automakers are making similar pledges.

Source: https://www.cnbc.com/2021/06/13/gm-ford-are-all-in-on-evs-heres-how-dealers-feel-about-it-.html

Continue Reading

Trending