Latest news with #Gorillasof
Yahoo
29-05-2025
- Business
- Yahoo
Kohl's (NYSE:KSS) Exceeds Q1 Expectations
Department store chain Kohl's (NYSE:KSS) reported Q1 CY2025 results exceeding the market's revenue expectations , but sales fell by 4.4% year on year to $3.23 billion. Its GAAP loss of $0.13 per share was 41.1% above analysts' consensus estimates. Is now the time to buy Kohl's? Find out in our full research report. Revenue: $3.23 billion vs analyst estimates of $3.2 billion (4.4% year-on-year decline, 1% beat) EPS (GAAP): -$0.13 vs analyst estimates of -$0.22 (41.1% beat) Adjusted EBITDA: $235 million vs analyst estimates of $221.6 million (7.3% margin, 6.1% beat) EPS (GAAP) guidance for the full year is $0.35 at the midpoint, missing analyst estimates by 47.4% Operating Margin: 1.9%, in line with the same quarter last year Free Cash Flow was -$202 million compared to -$133 million in the same quarter last year Same-Store Sales fell 3.9% year on year, in line with the same quarter last year Market Capitalization: $901.7 million Michael Bender, Kohl's Interim Chief Executive Officer, said, 'I am honored to assume the role of Interim CEO at such an important time for our company. Kohl's has a tremendous opportunity to build on our strong foundation of over 1,100 conveniently located stores and a large and loyal customer base.' Founded as a corner grocery store in Milwaukee, Wisconsin, Kohl's (NYSE:KSS) is a department store chain that sells clothing, cosmetics, electronics, and home goods. A company's long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. With $16.07 billion in revenue over the past 12 months, Kohl's is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there is only so much real estate to build new stores, placing a ceiling on its growth. For Kohl's to boost its sales, it likely needs to adjust its prices or lean into foreign markets. As you can see below, Kohl's demand was weak over the last six years (we compare to 2019 to normalize for COVID-19 impacts). Its sales fell by 3.7% annually as it didn't open many new stores and observed lower sales at existing, established locations. This quarter, Kohl's revenue fell by 4.4% year on year to $3.23 billion but beat Wall Street's estimates by 1%. Looking ahead, sell-side analysts expect revenue to decline by 5.6% over the next 12 months, a slight deceleration versus the last six years. This projection is underwhelming and implies its products will face some demand challenges. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. A retailer's store count often determines how much revenue it can generate. Over the last two years, Kohl's has kept its store count flat while other consumer retail businesses have opted for growth. When a retailer keeps its store footprint steady, it usually means demand is stable and it's focusing on operational efficiency to increase profitability. Note that Kohl's reports its store count intermittently, so some data points are missing in the chart below. The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing stores and is driven by customer visits (often called traffic) and the average spending per customer (ticket). Kohl's demand has been shrinking over the last two years as its same-store sales have averaged 5.5% annual declines. This performance isn't ideal, and we'd be concerned if Kohl's starts opening new stores to artificially boost revenue growth. In the latest quarter, Kohl's same-store sales fell by 3.9% year on year. This decrease represents a further deceleration from its historical levels. We hope the business can get back on track. We were impressed by how significantly Kohl's blew past analysts' gross margin, EPS, and EBITDA expectations this quarter. We were also excited its revenue outperformed Wall Street's estimates. On the other hand, its full-year EPS guidance missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 3.4% to $8.40 immediately after reporting. Sure, Kohl's had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
08-05-2025
- Business
- Yahoo
Vital Farms's (NASDAQ:VITL) Q1 Earnings Results: Revenue In Line With Expectations
Egg and butter company Vital Farms (NASDAQ:VITL) met Wall Street's revenue expectations in Q1 CY2025, with sales up 9.6% year on year to $162.2 million. The company's outlook for the full year was close to analysts' estimates with revenue guided to $740 million at the midpoint. Its GAAP profit of $0.37 per share was 45.1% above analysts' consensus estimates. Is now the time to buy Vital Farms? Find out in our full research report. Revenue: $162.2 million vs analyst estimates of $162.6 million (9.6% year-on-year growth, in line) EPS (GAAP): $0.37 vs analyst estimates of $0.26 (45.1% beat) Adjusted EBITDA: $27.48 million vs analyst estimates of $21.33 million (16.9% margin, 28.8% beat) The company reconfirmed its revenue guidance for the full year of $740 million at the midpoint EBITDA guidance for the full year is $100 million at the midpoint, below analyst estimates of $100.9 million Operating Margin: 13.4%, down from 16.3% in the same quarter last year Free Cash Flow Margin: 1.3%, down from 15.3% in the same quarter last year Market Capitalization: $1.6 billion 'We delivered first quarter results that were in-line with our overall expectations and made good progress on our key 2025 strategic initiatives", said Russell Diez-Canseco, Vital Farms' President and Chief Executive Officer. 'We demonstrated solid execution, ongoing business momentum, and our continued focus on bringing ethical food to the table." With an emphasis on ethically produced products, Vital Farms (NASDAQ:VITL) specializes in pasture-raised eggs and butter. A company's long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. With $620.6 million in revenue over the past 12 months, Vital Farms is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers. On the bright side, it can grow faster because it has a longer list of untapped store chains to sell into. As you can see below, Vital Farms grew its sales at an incredible 30.5% compounded annual growth rate over the last three years as consumers bought more of its products. This quarter, Vital Farms grew its revenue by 9.6% year on year, and its $162.2 million of revenue was in line with Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 25% over the next 12 months, a deceleration versus the last three years. Still, this projection is noteworthy and indicates the market sees success for its products. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can't use accounting profits to pay the bills. Vital Farms has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company's free cash flow margin averaged 6.6% over the last two years, slightly better than the broader consumer staples sector. Taking a step back, we can see that Vital Farms's margin dropped by 9.1 percentage points over the last year. If its declines continue, it could signal increasing investment needs and capital intensity. Vital Farms's free cash flow clocked in at $2.15 million in Q1, equivalent to a 1.3% margin. The company's cash profitability regressed as it was 14 percentage points lower than in the same quarter last year, which isn't ideal considering its longer-term trend. We were impressed by how significantly Vital Farms blew past analysts' EPS and EBITDA expectations this quarter. On the other hand, its full-year EBITDA guidance slightly missed. Overall, we think this was still a solid quarter. The stock remained flat at $36.01 immediately following the results. Sure, Vital Farms had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
13-02-2025
- Business
- Yahoo
DistributionNOW (NYSE:DNOW) Reports Bullish Q4, Stock Soars
Energy and industrial distributor DistributionNOW (NYSE:DNOW) announced better-than-expected revenue in Q4 CY2024, with sales up 2.9% year on year to $571 million. Its non-GAAP profit of $0.25 per share was 92.3% above analysts' consensus estimates. Is now the time to buy DistributionNOW? Find out in our full research report. Revenue: $571 million vs analyst estimates of $552.2 million (2.9% year-on-year growth, 3.4% beat) Adjusted EPS: $0.25 vs analyst estimates of $0.13 ($0.12 beat) Adjusted EBITDA: $45 million vs analyst estimates of $30.98 million (7.9% margin, large beat) Operating Margin: 5.1%, in line with the same quarter last year Free Cash Flow Margin: 20.8%, up from 18.6% in the same quarter last year Market Capitalization: $1.50 billion Spun off from National Oilwell Varco, DistributionNOW (NYSE:DNOW) provides distribution and supply chain solutions for the energy and industrial end markets. Focusing on narrow product categories that can lead to economies of scale, infrastructure distributors sell essential goods that often enjoy more predictable revenue streams. For example, the ongoing inspection, maintenance, and replacement of pipes and water pumps are critical to a functioning society, rendering them non-discretionary. Lately, innovation to address trends like water conservation has driven incremental sales. But like the broader industrials sector, infrastructure distributors are also at the whim of economic cycles as external factors like interest rates can greatly impact commercial and residential construction projects that drive demand for infrastructure products. Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, DistributionNOW's demand was weak and its revenue declined by 4.3% per year. This fell short of our benchmarks and is a sign of poor business quality. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. DistributionNOW's annualized revenue growth of 5.4% over the last two years is above its five-year trend, but we were still disappointed by the results. This quarter, DistributionNOW reported modest year-on-year revenue growth of 2.9% but beat Wall Street's estimates by 3.4%. Looking ahead, sell-side analysts expect revenue to decline by 1.1% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development. DistributionNOW was roughly breakeven when averaging the last five years of quarterly operating profits, one of the worst outcomes in the industrials sector. This result isn't too surprising given its low gross margin as a starting point. On the plus side, DistributionNOW's operating margin rose by 30.7 percentage points over the last five years. In Q4, DistributionNOW generated an operating profit margin of 5.1%, in line with the same quarter last year. This indicates the company's cost structure has recently been stable. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. DistributionNOW's EPS grew at an astounding 31.3% compounded annual growth rate over the last five years, higher than its 4.3% annualized revenue declines. This tells us management adapted its cost structure in response to a challenging demand environment. Diving into the nuances of DistributionNOW's earnings can give us a better understanding of its performance. As we mentioned earlier, DistributionNOW's operating margin was flat this quarter but expanded by 30.7 percentage points over the last five years. On top of that, its share count shrank by 1.8%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For DistributionNOW, its two-year annual EPS declines of 1.8% mark a reversal from its (seemingly) healthy five-year trend. We hope DistributionNOW can return to earnings growth in the future. In Q4, DistributionNOW reported EPS at $0.25, up from $0.22 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects DistributionNOW's full-year EPS of $0.93 to shrink by 15%. We were impressed by how significantly DistributionNOW blew past analysts' EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street's estimates by a wide margin. Zooming out, we think this was a good quarter with some key areas of upside. The stock traded up 6.2% to $15.01 immediately after reporting. Sure, DistributionNOW had a solid quarter, but if we look at the bigger picture, is this stock a buy? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
