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Walmart earnings top expectations as customers’ new shopping habits send e-commerce sales soaring 79%

Walmart’s U.S. e-commerce sales soared by 79% in the third quarter, as customers continued to shop online during the coronavirus pandemic.

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Customers shop at a Walmart store in Chicago, Illinois.

Scott Olson | Getty Images

Walmart reported third-quarter earnings on Tuesday that topped Wall Street’s expectations as customers continued to shop online and sent U.S. e-commerce sales soaring by 79%.

The discounter said customers are embracing the new ways of shopping they adopted during the global coronavirus health crisis. As the holiday shopping season begins, instead of browsing store aisles, more of them are shipping purchases to their homes, getting groceries dropped off at their doors or picking up online purchases by the curbside.

Walmart did not provide an outlook, but the company’s CEO, Doug McMillon, said the popularity of the online shopping services will not fade away.

“We’re convinced that most of the behavior change will persist beyond the pandemic and that our combination of strong stores and emerging digital capabilities will be a winning formula,” he told investors on an earnings call. “Customers will want to be served in a variety of ways and we’re positioned to save them money, provide the variety of product choices they’re looking for, and deliver the experience they choose in the moment.”

And, he added, the retailer had a strong quarter, despite “an unusual and softer back-to-school season and less benefit from government stimulus spending versus the first half of the year.”

He said the rising number of Covid-19 cases across the country “reminds us we must be vigilant” and urged elected officials to work together to help small businesses.

Walmart shares closed Tuesday down 2% to $149.37. Its stock has gained nearly 26% so far this year, bringing Walmart’s market value to $423.3 billion. Shares touched an all-time high of $153.40 on Monday.

Here’s what the company reported for the fiscal third quarter ended Oct. 31:

  • Earnings per share: $1.34, adjusted vs. $1.18 expected, according to Refinitiv’s consensus estimates
  • Revenue: $134.7 billion vs. $132.2 billion expected by Refinitiv estimates
  • U.S. same-store sales: up 6.4% vs. gain of 3.9% expected by StreetAccount survey

In the quarter, Walmart reported net income rose to $5.14 billion, or $1.80 per share, from $3.29 billion, or $1.15 a share, a year earlier. Excluding items, the company earned $1.34 per share. Analysts were expecting Walmart would earn $1.18 per share, according to Refinitiv.

Total revenue grew by 5.2% to $134.7 billion from $128.0 billion a year earlier, exceeding Wall Street’s expectations of $132.2 billion.

Walmart’s same-store sales in the U.S. grew by 6.4%, higher than the increase of 3.9% expected by StreetAccount survey.

Walmart subsidiary, Sam’s Club, had a strong quarter, too. The membership warehouse club’s same-store sales increased about 11%, excluding fuel, and its e-commerce sales jumped 41%.

The retailer’s international business grew, but at a slower rate. Net sales in the third quarter were $29.6 billion, an increase of 1.3%. Excluding changes in currency rates, net sales would have been $30.6 billion, or a rise of 5%. Flipkart, an Indian e-commerce retailer that Walmart acquired two years ago, had a record number of monthly active customers.

The company said Covid-19 added about $600 million in incremental expenses in the third quarter, but were partially offset by a noncash impairment charge in the third quarter of last year.

‘Three to five years’ e-commerce growth

Walmart has been one of the beneficiaries of stay-at-home trends during the pandemic — a trend that continued in the most recent quarter, even without a boost from government stimulus dollars. Since the spring, Americans have turned to its stores and website for groceries, cleaning supplies and items to pass the time, from puzzles to bicycles.

The company has hired over half a million new employees this year.

Walmart Chief Financial Officer Brett Biggs said the shift in purchasing patterns at the start of the pandemic amounted to “three to five years of acceleration in e-commerce, really in a period of weeks and months.”

But, he added, “people are still going to want to stop and shop at stores longer term so we like the combination of those assets.”

In the coming months, Walmart will face new challenges. Coronavirus cases and hospitalizations are rising across the country during the holiday shopping season. Starting Saturday, Walmart said it would resume counting and restricting the number of customers in the store to make sure they don’t exceed capacity limits. Some grocers, including Kroger, Wegmans and Publix, have reinstated purchasing limits on toilet paper, disinfecting spray and hand sanitizer.

Spreading out Black Friday sales

Walmart’s stores will be closed on Thanksgiving, a day that’s been the kickoff to the holiday shopping season in previous years. Like other retailers, the discounter began holiday sales early because of the pandemic and has spread out its deals. It split up Black Friday into multiple store and online events instead of having a day of doorbusters.

“It just gives people more of an opportunity to shop throughout the season,” Biggs said. “It’s not so focused on one day.”

He said that helps spread out orders for Walmart, which must pick, pack and ship many of those purchases.

“Think about how you supply stores. It certainly takes pressure off of a system that’s typically geared toward a few days or a Black Friday weekend. All of that I think is a positive for us and for customers.”

Customers may celebrate differently, but McMillon said he expects they will still be enthusiastic about the holidays.

“While many family gatherings may be smaller, we do believe families want to decorate, celebrate, and enjoy food and gifts,” he said on the earnings call. “They want a sense of normalcy, and our traditions help bring some joy and comfort to this difficult year.”

Read the complete release here.

Walmart did not provide an outlook, but the company’s CEO, Doug McMillon, said the popularity of the online shopping services will not fade away.

Source: https://www.cnbc.com/2020/11/17/walmart-wmt-q3-2021-earnings-.html

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Oracle guidance misses expectations, stock drops

Oracle reported better-than-expected results and showed accelerating growth compared with the immediate impact of the coronavirus last year.

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Safra Catz, co-chief executive officer of Oracle Corp.

David Paul Morris | Bloomberg | Getty Images

Oracle shares fell 5% in extended trading on Tuesday after the company offered lower quarterly revenue guidance than expected as it plans to increase capital expenditures to support cloud computing workloads. The guidance came on Oracle’s earnings call after the enterprise software maker issued better-than-expected earnings and faster revenue growth than last quarter.

Here’s how the company did:

  • Earnings: $1.54 per share, adjusted, vs. $1.31 per share as expected by analysts, according to Refinitiv.
  • Revenue: $11.23 billion, vs. $11.04 billion as expected by analysts, according to Refinitiv.

With respect to guidance, Oracle CEO Safra Catz called for 94 cents to 98 cents in adjusted earnings per share and 3% to 5% revenue growth in the fiscal first quarter. Analysts polled by Refinitiv are expecting fiscal first-quarter adjusted earnings of $1.03 per share and the equivalent of 3% revenue growth.

“We expect to roughly double our cloud capex spend in FY 2022 to nearly $4 billion,” Catz said. “We are confident that the increased return in the cloud business more than justifies this increased investment, and our margins will expand over time.”

Revenue rose 8% year over year in Oracle’s fiscal fourth quarter, which ended on May 31, according to a statement. In the prior quarter revenue grew 3%. The accelerating growth benefited from a comparison against the quarter last year when the coronavirus arrived in the U.S. and Oracle’s revenue fell some 6%.

Oracle’s top segment by revenue, cloud services and license support, generated $7.39 billion, which was up 8% and above the FactSet consensus estimate of $7.32 billion in revenue. The company said revenue from its second-generation cloud infrastructure doubled in the quarter, but it did not provide the figure in dollars.

The cloud license and on-premises license segment contributed $2.14 billion in revenue, up 9% and more than the $2.05 billion consensus.

The company’s hardware revenue, at $882 million, was exactly in line with analysts’ estimates, declining 2%.

During the quarter Oracle announced new public-cloud computing options that draw on Arm-based chips, and the U.S. Supreme Court ruled on a longstanding case between Oracle and Google, declaring that Google’s copying of Java code was fair use.

Notwithstanding the after-hours move, Oracle stock is up 26% since the start of the year, while the S&P 500 index is up 13% over the same period.

In May, Barclays analysts lowered their rating on the stock to the equivalent of hold from the equivalent of buy after the price had moved upward as investors rotated out of growth and into value. “To see further relative outperformance a growth acceleration at Oracle is needed, and we don’t have enough tangible data points for this yet,” the analysts wrote.

WATCH: The great tech tug-o-war

Here’s how the company did:

Source: https://www.cnbc.com/2021/06/15/oracle-orcl-earnings-q4-2021.html

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RH beats earnings, hikes outlook as retail rebound boosts high-end home goods; shares jump

Shares of the high-end furniture retailer surged Wednesday after the company beat analysts’ profit and sales estimates for the fiscal first quarter.

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Jason Kempin | Getty Images Entertainment | Getty Images

Shares of the high-end furniture retailer RH surged in extended trading Wednesday after the company beat analysts’ profit and sales estimates for the fiscal first quarter.

RH also hiked its full-year outlook, building on the momentum it’s seeing in the luxury home category, and gave a stronger-than-expected sales forecast for the second quarter.

In a letter to shareholders, Chief Executive Officer Gary Friedman said the remainder of this year “will surely be a tale of two halves” for the retail industry. But he said that “the un-masking of the general public could lead to a Roaring Twenties type of consumer exuberance.”

The company’s stock was last up more than 7%.

Here’s how RH did in the quarter ended May 1 compared with what analysts were anticipating, using Refinitiv estimates:

  • Earnings per share: $4.89 adjusted vs. $4.10 expected
  • Revenue: $861 million vs. $758 million expected

RH’s net income for the fiscal first quarter grew to $130.7 million, or $4.19 per share, compared with a loss of $3.2 million, or 17 cents per share, a year earlier. Excluding one-time adjustments, it earned $4.89 per share, topping expectations for $4.10.

Revenue surged 78% to $861 million from $483 million a year earlier. That also beat expectations for $758 million.

Friedman said that a strong housing and renovation market, a record stock market, low interest rates, and the reopening of the U.S. economy all bode well for the company in the quarters ahead.

RH hiked its fiscal 2021 outlook for revenue growth to a range of 25% to 30%, compared with a prior range of 15% to 20%. Analysts had been looking for a 19.7% increase year over year.

For its fiscal second quarter, RH expects revenue to grow 35% to 37%. Analysts had been looking for a 27.2% jump.

The company is preparing to kick off its global expansion in the spring of 2022, starting with England. To drive future growth, it is also considering expanding into new services, potentially into areas such as landscape architecture. It currently offers interior design consulting.

RH shares are up roughly 37% year to date. The company has a market cap of about $13 billion.

Find the full earnings press release from RH here.

Source: https://www.cnbc.com/2021/06/09/rh-earnings-q1-2021.html

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Blue Origin auctions seat on first spaceflight with Jeff Bezos for $28 million

The winning bidder will fly to the edge of space with the Amazon founder on Blue Origin’s New Shepard rocket scheduled to launch on July 20.

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A New Shepard rocket launches on a test flight.

Blue Origin

Jeff Bezos‘ space venture Blue Origin auctioned off a seat on its upcoming first crewed spaceflight on Saturday for $28 million.

The winning bidder, whose name wasn’t released, will fly to the edge of space with the Amazon founder and his brother Mark on Blue Origin’s New Shepard rocket scheduled to launch on July 20. The company said it will reveal the name of the auction winner in the coming weeks.

Bidding opened at $4.8 million but surpassed $20 million within the first few minutes of the auction. The auction’s proceeds will be donated to Blue Origin’s education-focused nonprofit Club for the Future, which supports kids interested in future STEM careers.

Blue Origin director of astronaut and orbital sales Ariane Cornell said during the auction webcast that New Shepard’s first passenger flight will carry four people, including Bezos, his brother, the auction winner and a fourth person to be announced later.

Autonomous spaceflight

New Shepard, a rocket that carries a capsule to an altitude of over 340,000 feet, has flown more than a dozen successful test flights without passengers, including one in April at the company’s facility in the Texas desert. It’s designed to carry up to six people and flies autonomously — without needing a pilot. The capsule has massive windows to give passengers a view of the earth below during about three minutes in zero gravity, before returning to Earth.

Blue Origin’s system launches vertically, and both the rocket and capsule are reusable. The boosters land vertically on a concrete pad at the company’s facility in Van Horn, Texas, while the capsules land using a set of parachutes.

The interior of the latest New Shepard capsule

Blue Origin

Bezos founded Blue Origin in 2000 and still owns the company, funding it through share sales of his Amazon stock.

July 20 is notable because it also marks the 52nd anniversary of the Apollo 11 moon landing.

Branson and Musk

VSS Unity fires its rocket engine shortly after launching on its third spaceflight on May 22, 2021.

Virgin Galactic

Bezos and fellow billionaires Elon Musk and Sir Richard Branson are in a race to get to space, but each in different ways. Bezos’ Blue Origin and Branson’s Virgin Galactic are competing to take passengers on short flights to the edge of space, a sector known as suborbital tourism, while Musk’s SpaceX is launching private passengers on further, multi-day flights, in what is known as orbital tourism.

Both Blue Origin and Virgin Galactic have been developing rocket-powered spacecraft, but that is where the similarities end. While Blue Origin’s New Shepard rocket launches vertically from the ground, Virgin Galactic’s SpaceShipTwo system is released mid-air and returns to Earth in a glide for a runway landing, like an aircraft.

Virgin Galactic’s system is also flown by two pilots, while Blue Origin’s launches without one. Branson’s company has also flown a test spaceflight with a passenger onboard, although the company has three spaceflight tests remaining before it begins flying commercial customers – which is planned to start in 2022.

SpaceX launches its Crew Dragon spacecraft to orbit atop its reusable Falcon 9 rocket, having sent 10 astronauts to the International Space Station on three missions to date.

In addition to the government flights, Musk’s company is planning to launch multiple private astronaut missions in the year ahead – beginning with the all-civilian Inspiration4 mission that is planned for September. SpaceX is also launching at least four private missions for Axiom Space, starting early next year.

Blue Origin’s auction may have netted $28 million, but a seat on a suborbital spacecraft is typically much less expensive. Virgin Galactic has historically sold reservations between $200,000 and $250,000 per ticket, and more recently charged the Italian Air Force about $500,000 per ticket for a training spaceflight.

Musk’s orbital missions are more costly than the suborbital flights, with NASA paying SpaceX about $55 million per seat for spaceflights to the ISS.

SpaceX’s Crew Dragon spacecraft named “Resilience” is seen docked to the International Space Station.

NASA

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The winning bidder, whose name wasn’t released, will fly to the edge of space with the Amazon founder and his brother Mark on Blue Origin’s New Shepard rocket scheduled to launch on July 20. The company said it will reveal the name of the auction winner in the coming weeks.

Source: https://www.cnbc.com/2021/06/12/jeff-bezos-blue-origin-auctions-spaceflight-seat-for-28-million.html

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