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Tech stocks suffer a big sell-off after earnings fail to impress Wall Street

Shares of Twitter, Facebook, Apple and Amazon sunk in trading Friday….

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Shares of Twitter, Facebook, Apple and Amazon traded lower Friday, a day after the companies released quarterly reports that failed to wow Wall Street.

Here’s what happened:

Twitter stock plunged to close down more than 21% Friday after the company reported disappointing user growth but beat analysts’ expectations on profit and revenue. Twitter grew its total monetizable daily active users by just 1 million people from last quarter to 187 million users, falling shy of analysts’ expectations of 195 million mDAUs for the third quarter. The company attributed last quarter’s growth in large part to shelter-in-place orders around the world.

“The good news is we did have a big surge in usage in March,” Chief Financial Officer Ned Segal told CNBC’s “Squawk Box” on Friday. “The great news about that is we’re retaining that group of people better than we have historical groups because of all the product work we’ve done. So, the way it’s flowed through our monetizable daily active usage, we ended up growing our DAU by a million sequentially this quarter, but 42 million year over year.”

Facebook, closing down more than 6%, also spooked investors after the company reported a decrease in users in the U.S. and Canada. The company said its American and Canadian user base fell to 196 million daily active users from 198 million a quarter earlier after some coronavirus lockdowns eased. Facebook said it expects its user base in the U.S. and Canada to remain flat or decrease in the fourth quarter.

“Globally, FB was benefiting from higher usage per day as global lock-downs substituted screen time for in-person social time,” Needham analysts said in a note Friday.

Apple shares dropped more than 5.5%. The company slightly exceeded Wall Street expectations but didn’t offer fourth-quarter guidance and reported a 20% year-over-year decline in iPhone sales. The iPhone decline was due to a launch that was delayed by about a month. New iPhone 12 sales weren’t included during the quarter. Wall Street is more focused on how the iPhone 12 will sell in the coming year, but some remained skeptical.

“The punchline is simple: iPhone revenues have to grow double digits YoY in FY Q1 YoY, or March needs to be dramatically stronger than seasonal for this cycle to have a shot of being the super cycle buyside investors appear to be anticipating,” Bernstein’s Toni Sacconaghi wrote in a note.

Amazon stock closed down nearly 5.5% after the company gave a wide guidance range for the fourth quarter. Amazon said sales in the fourth quarter will range $112 billion to $121 billion, about 28% to 38% growth from a year earlier. Analysts were expecting revenue of $112.3 billion. Still, the consensus on the Street was that the company will continue to grow.

“While we acknowledge the concerns around 4Q20 profitability as investments in the fulfillment network push into 4Q and COVID-19 costs remain elevated, we think these investments should lead to greater share gains going forward as eCommerce adoption accelerates due to COVID-19,” JPMorgan analysts said in a note Friday.

Shares of Alphabet, which crushed expectations, closed up nearly 4%. Its earnings showed a strong rebound in its core advertising business, which was hit hard by customer spending pullbacks due to the Covid-19 pandemic. It follows similarly strong earnings reports by ad-driven online companies Pinterest and Snap earlier this month.

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Source: https://www.cnbc.com/2020/10/30/apple-twitter-facebook-amazon-stock-down-after-earnings.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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Earnings

Corporate Company Earnings, Find Earnings Per Share and Earnings History Online

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Source: https://www.cnbc.com/earnings/

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International: Top News And Analysis

CNBC International is the world leader for news on business, technology, China, trade, oil prices, the Middle East and markets.

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Source: https://www.cnbc.com/us-top-news-and-analysis/

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