Latest news with #RichardDickson
Yahoo
2 days ago
- Business
- Yahoo
What Wall Street might be missing on Nvidia
Decoding a public company's earnings report in the 24 hours after its release could be maddening. Here's why. A company that beats on sales and earnings estimates could see its stock pounded after one slip of the tongue from a CEO or CFO on the earnings call (which you can now listen in on with Yahoo Finance). Look at the 20% plunge Gap's (GAP) stock took on Friday after the company reported across-the-board beats but issued a tariff warning many should have seen coming. Gap CEO Richard Dickson made a compelling case on the state of the business on Yahoo Finance. A company that misses on sales and earnings estimates could see its stock price skyrocket as analysts and investors reason 'bad news' like this was 'priced into the stock' months ago. What was not priced in? The positive hype about future growth on the earnings call. Maddening. I have generally been on the side of the fence that says companies don't deserve passes for missed numbers or bad quarters that weren't properly guided. The numbers are the numbers. You assess them, crunch them, ponder them further, repeat this process 75 more times, and make a decision on the stock. It's not rocket science. To that end, I don't believe AI chip darling Nvidia (NVDA) fully deserves the free pass it got this week for a confusing quarter that was un-Nvidia-like. It reported adjusted earnings per share of $0.81, compared to estimates of $0.93, though the company posted a second (adjusted) EPS figure of $0.96 after excluding "H20 charge and related tax impact." In other words, the $0.96 figure represents what Nvidia would've made had its China business not gone poof courtesy of Trump's chip export control — a reality that does not exist. Nvidia has earned a legion of fans on Wall Street through years of strong execution and fundamentals. Analysts have been quick to 'exclude' the fall of its once lucrative China business. Every single research note after the results was chock-full of "let's blow more smoke for the Nvidia bulls." Price targets were hiked. All the Nvidia positives were bolded in the PDF docs. Sure, CEO Jensen Huang made a point to mention on the earnings call that demand for its AI chips remains strong. Profit margins will likely trend back to historically normal levels later this year, CFO Colette Kress said. But in my view, the earnings still fell far short of a consensus figure — and one that investors have little visibility into this round. The uncertainty of the China impact led analysts to estimate figures that included and didn't include the H20 loss. What made up the final consensus estimate? It's anybody's guess. And how do you ignore a giant chunk of Nvidia's sales in China simply vanishing? How do you completely wipe that out of your forecast model and think earnings power will still be the same? That loss will put pressure on all other areas of the operation to accelerate in the near term, medium term, and long term. I dig what Jensen said about the potential for robotics. I'm just not sure it's going to drastically drive Nvidia's business in the next eight quarters like the China business would have. Am I off the mark here? Should one only look at the many positives of Nvidia all the time? I am curious. Get at me on X @BrianSozzi. I always enjoy hearing new perspectives. I want to conclude by saying I don't hate Nvidia. It's more of a challenge to you to always question the "consensus" view on a stock. Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
What Wall Street might be missing on Nvidia
Decoding a public company's earnings report in the 24 hours after its release could be maddening. Here's why. A company that beats on sales and earnings estimates could see its stock pounded after one slip of the tongue from a CEO or CFO on the earnings call (which you can now listen in on with Yahoo Finance). Look at the 20% plunge Gap's (GAP) stock took on Friday after the company reported across-the-board beats but issued a tariff warning many should have seen coming. Gap CEO Richard Dickson made a compelling case on the state of the business on Yahoo Finance. A company that misses on sales and earnings estimates could see its stock price skyrocket as analysts and investors reason 'bad news' like this was 'priced into the stock' months ago. What was not priced in? The positive hype about future growth on the earnings call. Maddening. I have generally been on the side of the fence that says companies don't deserve passes for missed numbers or bad quarters that weren't properly guided. The numbers are the numbers. You assess them, crunch them, ponder them further, repeat this process 75 more times, and make a decision on the stock. It's not rocket science. To that end, I don't believe AI chip darling Nvidia (NVDA) fully deserves the free pass it got this week for a confusing quarter that was un-Nvidia-like. It reported adjusted earnings per share of $0.81, compared to estimates of $0.93, though the company posted a second (adjusted) EPS figure of $0.96 after excluding "H20 charge and related tax impact." In other words, the $0.96 figure represents what Nvidia would've made had its China business not gone poof courtesy of Trump's chip export control — a reality that does not exist. Nvidia has earned a legion of fans on Wall Street through years of strong execution and fundamentals. Analysts have been quick to 'exclude' the fall of its once lucrative China business. Every single research note after the results was chock-full of "let's blow more smoke for the Nvidia bulls." Price targets were hiked. All the Nvidia positives were bolded in the PDF docs. Sure, CEO Jensen Huang made a point to mention on the earnings call that demand for its AI chips remains strong. Profit margins will likely trend back to historically normal levels later this year, CFO Colette Kress said. But in my view, the earnings still fell far short of a consensus figure — and one that investors have little visibility into this round. The uncertainty of the China impact led analysts to estimate figures that included and didn't include the H20 loss. What made up the final consensus estimate? It's anybody's guess. And how do you ignore a giant chunk of Nvidia's sales in China simply vanishing? How do you completely wipe that out of your forecast model and think earnings power will still be the same? That loss will put pressure on all other areas of the operation to accelerate in the near term, medium term, and long term. I dig what Jensen said about the potential for robotics. I'm just not sure it's going to drastically drive Nvidia's business in the next eight quarters like the China business would have. Am I off the mark here? Should one only look at the many positives of Nvidia all the time? I am curious. Get at me on X @BrianSozzi. I always enjoy hearing new perspectives. I want to conclude by saying I don't hate Nvidia. It's more of a challenge to you to always question the "consensus" view on a stock. Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Sign in to access your portfolio
Time of India
3 days ago
- Business
- Time of India
Gap shares slide as tariffs loom large over apparel maker's turnaround plans
HighlightsGap Inc. shares fell 20% in early trading after the company warned that U.S. tariffs would impact this year's profit, estimating tariff-related costs between $250 million and $300 million. Under the leadership of Chief Executive Officer Richard Dickson, Gap Inc. plans to double the use of U.S.-grown cotton by 2026 and aims to diversify its supplier footprint to reduce reliance on any single country. Despite the tariff concerns, Gap Inc. reaffirmed its annual forecasts, excluding tariff-related costs, and reported first-quarter sales and profit that exceeded Wall Street estimates. By Savyata Mishra Gap shares fell 20% in early trading on Friday after the Old Navy owner warned that U.S. tariffs would squeeze this year's profit, even as the apparel maker aims to soften the blow by diversifying its supply chain and investing in U.S. cotton. The company reaffirmed its annual forecasts that did not include tariff-related costs but flagged expenses of up to $300 million, which analysts said would weigh on Gap's margins through the second half of the year and into 2026. Shares of the company, which owns brands such as Banana Republic and ON, were trading at $22.44. The stock has surged 30% so far this month, as investors focused on the firm's efforts to improve product innovation and store operations. At least three brokerages trimmed price targets on the stock, with Jefferies cutting it by the most, to $26 from $29. "Banana Republic and Athleta likely need much reinvestment to drive consistent positive comparable sales and margin expansion, in our view," UBS analyst Jay Sole said. President Donald Trump's trade policy has threatened to upend supply chains and push up prices for everyday essentials. Some retailers including Best Buy have accounted for the tariffs and a few others have pulled their forecasts. However, firms like Gap have excluded the impact from their outlook, citing an ever evolving trade policy. Under the leadership of Richard Dickson, who took helm in 2023, Gap laid out plans to double the use of America-grown cotton by 2026, with executives on a post-earnings call saying that investing in the U.S., its biggest market, remains a key priority. It has been diversifying its supplier footprint for several years, and currently has a less than 10% exposure to China. The region was one of its top manufacturing hubs, followed by Vietnam and Indonesia. It aims for no country to account for more than 25% by the end of 2026. The company topped Wall Street estimates first-quarter sales and profit helped by full-price selling in its namesake and Old Navy brands.
Yahoo
3 days ago
- Business
- Yahoo
Gap CEO: The trade war has not stalled our turnaround
Gap (GAP) CEO Richard Dickson says his turnaround of the retailer remains intact despite trade war headwinds. "No," Dickson told Yahoo Finance (video above) on whether the trade war has stalled his progress. Dickson added, "Like any business, we're constantly navigating complexity. And there's a lot of complexities in running a business. And in this case tariffs is a focus. But it's our responsibility to do so without ever compromising the long-term integrity of our strategy." Gap shares were pounded by about 20% Friday in the wake of its first quarter results. While the company beat analyst sales and profit forecasts, it warned of a large hit to operating profits this year at the hands of tariffs. Some analysts estimated the impact could be about $0.25 a share for the year. To navigate the volatile trade backdrop, Gap is lowering its sourcing from China from less than 10% in 2024 to less than 3% exiting the year. By the end of 2026, no single country should account for more than 25%. The company is also doubling its vendor sourcing for American-grown cotton in 2026. "Overall, Gap is executing very well, delivering top-line consistency at Old Navy and Gap (and management said 2Q is off to a good start), gross margin upside and showing cost discipline. While we expect Gap to be in the penalty box near-term on the Gap brand falling short of market expectations and tariff guidance, we believe risk/reward is especially attractive [on the stock's decline]," Citi retail analyst Paul Lejuez said in a note. Net sales: +2% year over year to $3.5 billion, vs. $3.42 billion estimate Comparable sales: Old Navy: +3% compared to +3% last year, vs. +1.7% estimate Banana Republic: 0% compared to +1% last year, vs. +1.6% estimate Gap: +5% compared to +3% last year, vs. +3.25% estimate Athleta: -8% compared to +5% last year, vs. -1.94% estimate Gross margin: 41.8% compared to 41.2% last year, vs. 41.6% estimate Diluted earnings per share: $0.51 vs. $0.45 estimate Trade war effects: Inventory levels rose 7% from the prior year. Trend watch: The company's same-store sales have gained for five straight quarters. Flush with cash: The company's total cash position surged 28% year over year to $2.2 billion. Warning: If tariffs stay in place at current levels, it could cost Gap $250 million to $300 million this year. Guidance does not include this impact, Gap says. Gap adds it could mitigate about half of the tariff impact — bringing a $100 million to $150 million potential hit to operating income. Guidance: 2025 Net sales: +1% to +2% (reiteration) Operating income: +8% to +10% (reiteration) Q2 2025 Net sales: Flat (consensus: up slightly) Gross margin: "Similar" to the first quarter rate of 41.8% (consensus: 42.3%) Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Click here for all of the latest retail stock news and events to better inform your investing strategy
Yahoo
3 days ago
- Business
- Yahoo
Gap CEO: The trade war has not stalled our turnaround
Gap (GAP) CEO Richard Dickson says his turnaround of the retailer remains intact despite trade war headwinds. "No," Dickson told Yahoo Finance (video above) on whether the trade war has stalled his progress. Dickson added, "Like any business, we're constantly navigating complexity. And there's a lot of complexities in running a business. And in this case tariffs is a focus. But it's our responsibility to do so without ever compromising the long-term integrity of our strategy." Gap shares were pounded by about 20% Friday in the wake of its first quarter results. While the company beat analyst sales and profit forecasts, it warned of a large hit to operating profits this year at the hands of tariffs. Some analysts estimated the impact could be about $0.25 a share for the year. To navigate the volatile trade backdrop, Gap is lowering its sourcing from China from less than 10% in 2024 to less than 3% exiting the year. By the end of 2026, no single country should account for more than 25%. The company is also doubling its vendor sourcing for American-grown cotton in 2026. "Overall, Gap is executing very well, delivering top-line consistency at Old Navy and Gap (and management said 2Q is off to a good start), gross margin upside and showing cost discipline. While we expect Gap to be in the penalty box near-term on the Gap brand falling short of market expectations and tariff guidance, we believe risk/reward is especially attractive [on the stock's decline]," Citi retail analyst Paul Lejuez said in a note. Net sales: +2% year over year to $3.5 billion, vs. $3.42 billion estimate Comparable sales: Old Navy: +3% compared to +3% last year, vs. +1.7% estimate Banana Republic: 0% compared to +1% last year, vs. +1.6% estimate Gap: +5% compared to +3% last year, vs. +3.25% estimate Athleta: -8% compared to +5% last year, vs. -1.94% estimate Gross margin: 41.8% compared to 41.2% last year, vs. 41.6% estimate Diluted earnings per share: $0.51 vs. $0.45 estimate Trade war effects: Inventory levels rose 7% from the prior year. Trend watch: The company's same-store sales have gained for five straight quarters. Flush with cash: The company's total cash position surged 28% year over year to $2.2 billion. Warning: If tariffs stay in place at current levels, it could cost Gap $250 million to $300 million this year. Guidance does not include this impact, Gap says. Gap adds it could mitigate about half of the tariff impact — bringing a $100 million to $150 million potential hit to operating income. Guidance: 2025 Net sales: +1% to +2% (reiteration) Operating income: +8% to +10% (reiteration) Q2 2025 Net sales: Flat (consensus: up slightly) Gross margin: "Similar" to the first quarter rate of 41.8% (consensus: 42.3%) Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Click here for all of the latest retail stock news and events to better inform your investing strategy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
