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Thursday September 24, 2020

Finances

Finances
 

Best Buy Reports Earnings Report

Best Buy Co., Inc. (BBY) released its latest earnings report on Tuesday, August 25. The company reported increased revenue and profits for the quarter.

Revenue came in at $9.9 billion for the quarter. This was up from $9.5 billion in revenue at the same time last year.

"Today, we are reporting strong quarterly results in the midst of unprecedented times," said Best Buy's CEO Corie Barry. "We are encouraged to see the customer demand for our products and services and are proud of the amazing execution of our teams."

The company posted net earnings of $432 million, or $1.65 per share. This was up from $238 million, or $0.89 per share at this time last year.

Best Buy reported domestic comparable store sales growth of 5% for the quarter. Domestic comparable online sales grew 242% during the quarter, compared to a 17% increase in the prior year's quarter. The monumental growth in online sales reflects the current reality as consumers are more cautious about leaving home and are more likely to shop from the safety of their living rooms during the ongoing pandemic.

Best Buy Co., Inc. (BBY) shares ended the week at $111.23, down 6.0% for the week.

Nordstrom Posts Earnings


Nordstrom, Inc. (JWN) reported its latest quarterly earnings on Tuesday, August 25. The retailer's sales and earnings decreased from the same quarter in the previous year.

Nordstrom's net sales for the quarter reached $1.78 billion. This was down from $3.78 billion at the same time last year.

"At the onset of the pandemic, we focused on protecting and enhancing liquidity, and we successfully executed on these plans," said Nordstrom's CEO, Erik Nordstrom. "Thanks to our team's efforts during the second quarter, we further strengthened our balance sheet with liquidity of $1.3 billion and generated operating cash flow of more than $185 million. We are now pivoting to prioritize market share gains and profitable growth as we advance our strategies."

The company reported a net loss of $255 million during the quarter. This stands in contrast to net earnings of $141 million during the same quarter last year.

The Seattle-based business reported that its numbers were in line with expectations given the impact of COVID-19. The company's Full-Price segment led the way with $1.1 billion in sales, down from $2.5 billion during the previous year. Nordstrom's Off-Price segment, which includes stores such as Nordstrom Rack, reported $712 million in sales, down from $1.2 billion. Digital sales accounted for 61% of the company's total net sales during the quarter.

Nordstrom, Inc. (JWN) shares ended the week at $15.68, up 7.0% for the week.

Tiffany Releases Quarterly Earnings


Tiffany & Co. (TIF) reported its latest quarterly earnings on Thursday, August 27. Revenue and profits decreased from the prior year's quarter.

The jewelry company reported net sales of $747.1 million for the quarter. This was down from $1.0 billion at the same time last year.

"We were excited to see that the encouraging trends we cited for the first quarter, namely, increased sales in Mainland China and global e-commerce, accelerated during the second quarter and propelled our return to quarterly profitability," said Alessandro Bogliolo, CEO of Tiffany & Co. "Importantly, our global sales trends have strengthened in August, with preliminary month-to-date worldwide sales through August 25th being slightly positive as compared to the same month-to-date period in the prior year."

Tiffany reported net earnings of $31.9 million for the quarter. This was down from $136.3 million at the same time last year.

Tiffany's comparable store sales fell 24% worldwide during the quarter. The company's Asia-Pacific segment drew a 17% increase in comparable store sales. Comparable store sales in Japan and Europe each fell 27%. Tiffany's Americas segment posted a decrease in comparable store sales of 44%.

Tiffany & Co. (TIF) shares ended the week at $123.88, down 1.8% for the week.

The Dow started the week at 28,078 and closed at 28,654 on 8/28. The S&P 500 started the week at 3,418 and closed at 3,508. The NASDAQ started the week at 11,449 and closed at 11,696.
 

Treasury Yields Rise as Consumer Spending Rises

Yields on U.S. Treasurys rose this week. The rise followed a drop in initial weekly jobless claims along with a moderate increase in consumer spending.

On Friday, the Commerce Department released the latest Personal Income and Outlays report for July. Personal consumer expenditures (PCE) increased 1.9% during the month. This increase outpaced analysts' expected 1.5% increase. However, it did not to keep pace with June's 6.2% rise.

During trading on Friday, the benchmark 10-year Treasury note yield was at 0.74%, up from the week's opening yield of 0.65%. The 30-year Treasury bond was at 1.52% mid-day on Friday, up from Monday's opening yield of 1.39%.

"The consumer is back spending at the shops and malls in July, but many of their purchases reflect pent-up demand following the pandemic lockdown," said Chris Rupkey, Chief Financial Economist at MUFG. "The expenditures needed to fuel the economy's recovery in August are a big question mark given the hit to personal income nationwide with the loss of those $600 weekly unemployment benefit checks."

On Thursday, the Labor Department released its initial weekly jobless claims for the week ending August 22. Seasonally-adjusted initial claims came in at 1,006,000, down 98,000 from last week.

"Continuing claims for unemployment are gradually falling," said Gus Faucher, Chief Economist at PNC Financial Services. "This indicates that some workers who lost their jobs during the pandemic are being rehired or taking new jobs, but that many others remain jobless. Unemployment in the U.S. economy is slowly declining."

The 10-year Treasury note yield closed at 0.73% on 8/28, while the 30-year Treasury bond yield was 1.51%.
 

Mortgage Rates Decrease

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, August 27. Mortgage rates continue to decline.

The 30-year fixed rate mortgage averaged 2.91% this week, down from last week's average of 2.99%. Last year at this time, the 30-year fixed rate mortgage averaged 3.58%.

This week, the 15-year fixed rate mortgage averaged 2.46%, down from 2.54% last week. At this time last year, the 15-year fixed rate mortgage averaged 3.06%.

"This year has been anything but normal and as the uncertainty lingers, mortgage rates remain near record lows," said Freddie Mac Chief Economist, Sam Khater. "These rates continue to incentivize potential buyers and the home buying season, which shifted from spring to summer, will likely continue into the fall."

Based on published national averages, the savings rate was 0.06% for the week of 8/24. The one-year CD averaged 0.20%.

Published August 28, 2020
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