Daily Newsletter | November 21, 2023

November 21, 2023

TLDR

MARKET RECAP → The S&P 500 (VOO) and Nasdaq (QQQ) break their 5-day winning streak as Fed minutes invoked a more cautious outlook. The recent rally has been fueled by the narrative that inflation has cooled and that the Fed will cut rates next year… Well, inflation has cooled, but not enough, and the Fed is still concerned that inflation may remain stubbornly above its 2% target rate. Sound familiar?

DICK’S SCORES A COMEBACK → ? Dick’s Sporting Goods (DKS) bounces back with a $3.04 billion revenue in Q3, outperforming Wall Street forecasts and raising its full-year outlook, despite earlier theft woes and a cautious holiday market stance.

BEST BUY’S HOLIDAY HURDLE → ? Best Buy (BBY) trims its full-year sales outlook amid inflation woes, despite beating earnings estimates, as it braces for a holiday season marked by budget-conscious consumers and declining online sales.

Sean Horgan

Head of Investor Relations @ MoneyLion

$shorgan

Today’s S&P 500 Heatmap

Source: finviz.com

Today’s Top News

DICK’S SCORES A COMEBACK

? Dick’s Sporting Goods (DKS) rebounded in its fiscal third quarter, surpassing Wall Street’s expectations with a $3.04 billion revenue, up 2.8% from last year. The retailer’s net income hit $201 million, with adjusted earnings per share at $2.85, beating the $2.44 forecast. This performance led to a 9% jump in shares at the open and an optimistic outlook for the holiday season.

? The company raised its full-year earnings guidance to between $11.45 and $12.05 per share, slightly above analyst expectations. Despite this increase, the new projection still falls short of the original forecast set earlier this year. Dick’s also adjusted its comparable sales outlook, now expecting a rise of 0.5% to 2%.

? Following a challenging second quarter marked by theft issues and profit drops, Dick’s Sporting Goods experienced a strong back-to-school season. CEO Lauren Hobart attributed this success to the company’s differentiated assortment and market share gains, expressing confidence in their strategies amidst an uncertain macroeconomic environment.

Source: shutterstock

BEST BUY’S HOLIDAY HURDLE

? Shares of Best Buy (BBY) fell after the company cut its full-year sales forecast, preparing for a holiday season with cost-conscious shoppers. The company now expects revenue to range from $43.1 billion to $43.7 billion, down from the previous $43.8 billion to $44.5 billion estimate. Comparable sales are projected to decline by 6% to 7.5%, a steeper drop than the earlier 4.5% to 6% prediction.

? Despite the revenue shortfall, Best Buy beat Wall Street’s quarterly earnings expectations with $1.29 adjusted per share, against the expected $1.18. However, the retailer’s revenue of $9.76 billion fell short of the anticipated $9.90 billion. CEO Corie Barry attributed the softer sales to uneven consumer demand, exacerbated by inflation and interest rate hikes.

? The consumer electronics retailer, still reeling from post-pandemic demand moderation, saw a 6.9% year-over-year decline in comparable sales. This downturn was reflected across various product categories, including appliances, computers, and mobile phones, though gaming saw growth. Best Buy’s online sales in the U.S. also dipped by 9.3%.