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General Motors shares gain after truck sales deliver big earnings beat in third quarter

GM’s net income surged 74% to $4.05 billion in the third quarter from $2.35 billion during the same three months last year….

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General Motors on Thursday reported third-quarter earnings that beat Wall Street expectations, thanks to its highly profitable trucks and SUVs in North America.

Here are the numbers:

  • Adjusted EPS: $2.83, vs. $1.38 expected, based on average analysts’ estimates compiled by Refinitiv
  • Revenue: $35.48 billion, vs. $35.51 billion expected

GM declined to give new earnings guidance for the year, citing a number of “moving pieces” such as potential stimulus and the coronavirus pandemic. GM CEO Mary Barra said the fourth quarter isn’t expected to be as strong as the third quarter. She downplayed the possibility that the uncertain outcome of the presidential election could hurt sales for the rest of the year.

“When we look at the election, we think the extended length of time to finalize the vote count was anticipated given the unique circumstances coming into this election,” Barra said during a media call Thursday morning. “There are a lot of moving pieces right but we’re hopeful that we’ll continue to have a strong recovery that we’ve seen in the United States and in China.”

Shares of GM jumped more than 7% following the company reporting earnings during premarket trading. The stock closed up 5.4% to $37.14.

GM’s North American operations earned $4.37 billion in the third quarter, up 44% from a year earlier, despite its U.S. sales declining 9.9% during the period. The company reported a 15% pretax profit margin for the quarter. Earnings for its international operations were in the black with pretax earnings of $10 million.

John Stapleton, GM’s interim CFO, said the automaker’s sales in the U.S. and China are “recovering faster than many people expected, and GM is benefiting from robust customer demand for our new vehicles and services, especially our full-size pickups and SUVs.”

Barra said the automaker is working to increase production of its trucks, saying an announcement is expected “very shortly” but declining to elaborate. She told investors later in the morning that the company plans to invest up to around $1 billion in its Canadian operations to increase production.

A General Motors Co. (GM) Chevrolet 2020 Silverado HD High Country edition pickup truck sits on the assembly line during a reveal event at the GM plant in Flint, Michigan, U.S., on Tuesday, Feb. 5, 2019.

Jeff Kowalsky | Bloomberg | Getty Images

“We are always working to eek out every single truck we can possibly produce,” she said. “I’d just ask you to stay tuned. You will hear more about that very shortly.”

Net income rose 74% to $4.05 billion from $2.35 billion during the third quarter of 2019.

GM repaid $5.2 billion of its revolving credit facilities during the third quarter, and an additional $3.9 billion in October. The company said it expects to repay the balance by year-end “while maintaining a strong cash balance.” GM’s automotive liquidity was above its target, ending the third quarter at $37.8 billion.

Then-CFO Dhivya Suryadevara told investors in July that the automaker expected the third quarter to be “slightly stronger” than the fourth quarter.

Suryadevara, who unexpectedly left GM for digital payments company Stripe in August, said if the monthly sales pace during the second half of the year was 14 million, investors should expect a pretax profit of $4 billion to $5 billion through the fourth quarter. In that scenario, GM expected to generate free cash flow of $7 billion to $9 billion. Suryadevara declined to release official guidance at the time, citing fluidity due to the coronavirus pandemic.

Cox Automotive estimated the U.S. sales pace at 15.3 million in the third quarter, which should allow GM to outperform those projections.

GM reported an adjusted pretax profit of $3 billion, or $1.72 earnings per share, in the third quarter of 2019. Revenue was $35.47 billion.

Both Ford Motor and Fiat Chrysler beat Wall Street’s expectations on better-than-expected demand for trucks and SUVs in North America. Those are segments GM has substantial market shares of as well.

Source: https://www.cnbc.com/2020/11/05/general-motors-gm-earnings-q3-2020.html

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Stitch Fix shares surge as online styling service reports surprise profit

Stitch Fix shares jumped after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

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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 jumped 14% in extended trading Tuesday after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Consumers have been splurging on new outfits in recent months, as many head back to school and return to social gatherings. Some have also citied the need for new clothes after either gaining or losing weight during the Covid pandemic.

Here’s how Stitch Fix did compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 19 cents vs. a loss of 13 cents expected
  • Revenue: $571.2 million vs. $548 million expected

Net income attributable to shareholders was $28 million, or 19 cents per share, in the latest period. A year ago, it posted a net loss of $44.5 million, or 44 cents a share. Analysts had been looking for the company to book a loss of 13 cents per share.

Revenue grew to $571.2 million from $443.4 million a year earlier. That was better than analysts’ expectations for $548 million.

Stitch Fix reported nearly 4.2 million active clients, up 18% from a year earlier. The company said net revenue per active client was $505, surpassing the $500 threshold for the first time ever. Customers have been purchasing more items to keep at home, Stitch Fix said, as they have more brands and price points to choose from.

Stitch Fix defines active clients as people who either ordered a “Fix” subscription or bought an item directly from its website in the preceding 52 weeks from the final day of the quarter.

The company also said it had its lowest ever churn rate at the end of the period, meaning its customers are sticking around.

Last month, Stitch Fix finally opened up its direct-buy option, which is now known as “Freestyle,” to the public. This allows people to shop Stitch Fix for individual items of clothing, without needing to sign up for a subscription.

CEO Elizabeth Spaulding said this should help Stitch Fix grow its addressable market in the year ahead. The company’s next initiative will be to market and raise broader awareness around the offering, she said. Stitch Fix is preparing to roll out a national advertising campaign on the debut.

Early indications are that “Freestyle” is meaningfully accretive to the company’s revenue per active client metric, Spaulding told analysts on a conference call.

“Clients have agency, flexibility and choice while also experiencing a highly personalized shopping experience,” Spaulding said.

For its fiscal first quarter, Stitch Fix said it sees sales in a range of $560 million to $575 million. That’s below analysts’ expectations for $588 million.

For the upcoming fiscal year, Stitch Fix anticipates sales rising 15% or more from the prior year. Analysts polled by Refinitiv had been looking for an 18% increase.

While the entire retail industry is working through supply chain complications, Stitch Fix said it is seeing a small impact, but nothing that will hurt the business in the fall and winter months. The company said it is less reliant on Vietnam, where manufacturing has largely come to a standstill due to ongoing pandemic lockdowns in the region.

As of Tuesday’s market close, Stitch Fix shares have fallen nearly 39% this year. The company has a market cap of $3.8 billion.

Find the full press release from Stitch Fix here.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Source: https://www.cnbc.com/2021/09/21/stitch-fix-sfix-q4-2021-earnings.html

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Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

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