Dec 22 (Reuters) – Used-car retailer CarMax Inc (KMX.N) said on Thursday it was pausing some hiring, halting share buybacks and cutting expenses after reporting an 86% drop in third-quarter profit as the industry struggles to offload inventory amid waning demand.
The company’s shares fell as much as 12% to $52.10 and were at more than a two-and-a-half year low, dragging other auto retailers down with it.
The used-car industry, which minted money during the pandemic, is now struggling to sell cars at or above the prices it bought them as consistent rate hikes and decades-high inflation take a toll on demand.
“CarMax is battling a used-vehicle recession,” Evercore ISI analyst Michael Montani said, adding that pressure on wholesale sales intensified from the second quarter.
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In response to challenging industry conditions, CarMax said it slowed car buying in the third quarter and cut marketing and capital expenditures.
CarMax is also lowering its staffing “from an attrition basis” and paused hiring in its corporate office to cut costs, Chief Financial Officer Enrique Mayor-Mora said during an investor call, adding that some actions may carry into the next year.
The company also halted share buybacks, CarMax said but added it remains committed to returning capital back to shareholders over time.
“Given third-quarter performance and continued market uncertainties, we are taking a conservative approach to our capital structure,” CarMax said.
CarMax reported retail and wholesale used-vehicle unit sales were 298,807 in the quarter through November, down 28% from a year earlier. It also bought about 40% fewer vehicles in the third quarter.
The company reported net income of 24 cents per share, compared with estimates of 70 cents, according to Refinitiv data.
CarMax’s revenue fell about 24% to $6.51 billion, below estimates of $7.29 billion.
Shares of other car retailers such as AutoNation Inc (AN.N) and Carvana Co (CVNA.N) were down between 1% and 2%.
Reporting by Priyamvada C and Kannaki Deka in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel
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Walmart jumps on strong forecast, other retailers rise
Indexes up: Dow 0.03%, S&P 0.74%, Nasdaq 1.4%
Nov 15 (Reuters) – The S&P 500 and Nasdaq were higher on Tuesday, but gains were cut after a report that Russian missiles crossed into Poland and killed two people, somewhat undermining hopes that cooling inflation would lead to a pullback in rate hikes by the U.S. Federal Reserve.
Two people were killed in an explosion in Przewodow, a village in eastern Poland near the border with Ukraine, firefighters told Reuters.
The Associated Press cited a senior U.S. intelligence official as saying the blast was due to Russian missiles crossing into Poland. However, the Pentagon said on Tuesday it could not confirm reports that Russian missiles had crossed into Poland.
Russia has been pounding cities across Ukraine with missiles, in attacks that Kyiv said were the heaviest wave of missile strikes in nearly nine months of war, while Poland’s prime minister called an urgent meeting of a government committee for national security and defense affairs.
“The decline was triggered by reports of a Russian missile landing in Poland,” said Steve Sosnick, chief strategist at Interactive Brokers. “This could develop into something far worse, but right now markets are nervous, not panicked.”
Stocks pulled back around mid-day, after jumping higher earlier in the session after data showed U.S. producer prices increased less than expected.
“You still are seeing volatile trading across markets,” said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management.
“We are not out of the woods yet as it relates to the Russia-Ukraine war. We did get incrementally better data on inflation but there are also still growth concerns.”
The Dow Jones Industrial Average (.DJI) rose 9.73 points, or 0.03%, to 33,546.43, the S&P 500 (.SPX) gained 29.4 points, or 0.74%, to 3,986.65 and the Nasdaq Composite (.IXIC) added 156.76 points, or 1.4%, to 11,352.98.
Tuesday’s inflation report showed producer prices rising 8% in the 12 months through October against an estimated 8.3% rise.
Tuesday’s equity gains built on a rally kicked off late last week by a cooler-than-expected report on consumer prices.
Shares of Walmart Inc (WMT.N) jumped 7% after the top U.S. retailer lifted its annual sales and profit forecasts, benefiting from a steady demand for groceries despite higher prices.
Shares of other retailers, including Target Corp (TGT.N) and Costco (COST.O), also rose following Walmart’s report.
Reporting by Lewis Krauskopf and Carolina Mandl in New York, Shubham Batra, Sruthi Shankar, Amruta Khandekar and Ankika Biswas; Additional reporting by Devik Jain;
Editing by Shounak Dasgupta and Arun Koyyur
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Sept 4 (Reuters) – Bed Bath & Beyond Inc’s (BBBY.O) chief financial officer fell to his death from New York’s Tribeca skyscraper known as the “Jenga” tower on Friday afternoon, police said on Sunday, days after the struggling retailer announced it was closing stores and laying off workers.
Gustavo Arnal, 52, joined Bed Bath & Beyond (BBBY.O) in 2020. He previously worked as CFO for cosmetics brand Avon in London and had a 20-year stint with Procter & Gamble (PG.N), according to his LinkedIn profile.
On Friday at 12:30 p.m. ET (1630 GMT), police responded to a 911 call and found a 52-year-old man dead near the building who suffered injuries from a fall. Police identified the man as Gustavo Arnal.
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The police statement did not provide further details on the circumstances leading to Arnal’s death and said the New York City Medical Examiner’s Office would determine the cause of death. Bed Bath & Beyond confirmed his death in a press statement on Sunday but gave no details.
The big-box chain – once considered a so-called “category killer” in home and bath goods – has seen its fortunes falter after an attempt to sell more of its own brand, or private-label goods.
Last week, Bed Bath & Beyond said it would close 150 stores, cut jobs and overhaul its merchandising strategy in an attempt to turn around its money-losing business.
It forecast a bigger-than-expected 26% slump in same-store sales for the second quarter and said it would retain its buybuy Baby business, which it had put up for sale. read more
Signage is seen at a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo
Arnal sold 55,013 shares in Bed Bath & Beyond in multiple transactions on Aug. 16-17, Reuters’ calculations showed based on SEC filings. The sales amounted to about $1.4 million, and Arnal still had almost 255,400 shares remaining.
On Aug. 23, the company, Arnal and major shareholder Ryan Cohen were sued over accusations of artificially inflating the firm’s stock price in a “pump and dump” scheme, with the lawsuit alleging Arnal sold off his shares at a higher price after the scheme.
The class action lawsuit listed Arnal as one of the defendants and was brought by a group of shareholders who claimed they lost around $1.2 billion.
The filing in the U.S. District Court for the District of Columbia alleged that Arnal “agreed to regulate all insider sales by BBBY’s officers and directors to ensure that the market would not be inundated with a large number of BBBY shares at a given time.”
The lawsuit also alleged that he issued materially misleading statements to investors.
The company said it was “in the early stages of evaluating the complaint, but based on current knowledge the company believes the claims are without merit.”
Shares in Bed Bath & Beyond have been highly volatile in recent months, being viewed as a so-called “meme” stock, which trade more on social media sentiment than economic fundamentals.
Cohen, a billionaire investor, disclosed a stake of nearly 10% in early March. Cohen’s RC Ventures disclosed plans to sell its stake on Aug. 17. read more
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Reporting by Kanishka Singh in Washington and Akriti Sharma in Bengaluru; additional reporting by Chuck Mikolajczak; Editing by Lisa Shumaker and Deepa Babington
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Aug 31 (Reuters) – Bed Bath & Beyond Inc (BBBY.O) on Wednesday said it inked deals for more than $500 million in new financing and that it would close 150 stores, cut jobs and overhaul its merchandising strategy in an attempt to turn around its money-losing business.
Investors, however, remain concerned that the retailer’s plan, announced in a strategic update, will do little to improve Bed Bath & Beyond’s business as shares fell 25%. The retailer also announced a plan to raise money by issuing new shares.
The big-box chain – once considered a so-called “category killer” in home and bath goods – has seen its fortunes falter after an attempt to sell more of its own brand, or private label, goods. The COVID-19 pandemic, supply chain crunch and consumer pullback on shopping due to sky-high inflation also hit the chain’s sales.
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Bed Bath & Beyond forecast a bigger-than-expected 26% slump in same-store sales for the second quarter and said it would retain its buybuy Baby business, which it had put up for sale.
The efforts to sell buybuy Baby had been encouraged by GameStop Corp (GME.N) Chairman Ryan Cohen, the company’s biggest investor until this month when he sold out of his 9.8% stake, sending shares plummeting.
Once known for providing many shoppers with 20%-off coupons, Bed Bath & Beyond revamped its merchandise in recent years to focus on private-label products including its Our Table brand cookware. read more
The chain is now ditching that strategy, nixing three of its private label brands, and reprioritizing national brands with labels including Calphalon, Ugg, Dyson and Cuisinart underpinning that strategy, executives said on a conference call.
Executives said Bed Bath & Beyond is cutting about 20% of its corporate and supply chain workforce, and eliminating its chief operating officer and chief stores officer roles. The company has about 32,000 employees.
Top brass tried to reassure analysts that vendors were still supporting the company, a key indication of its long-term financial prospects. Suppliers will ask for more money up front or stop shipping goods if they believe retailers can no longer pay them.
Signage is seen at a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo
“As we have managed through our cash burn, we have seen changes in vendors we manage,” said Chief Financial Officer Gustavo Arnal, adding that the company is managing the situation “one by one.”
First-quarter sales plunged 25% and it lost $358 million, leading to the firing of its Chief Executive Officer Mark Tritton in June. The company hired Sue Gove, an independent board director, to replace him on an interim basis.
On Wednesday, Gove said the retailer was “continuing to see significant positive momentum” and intended to build its “deep heritage as a retailer.”
“While there is much work ahead, our road map is clear and we’re confident that the significant changes we’ve announced today will have a positive impact on our performance'” she said on a conference call.
The retailer also said it expanded an existing loan and received a new $375 million “first-in-last-out” loan, and would launch a stock offering of up to 12 million shares.
Arnal said that 50 to 60 stores will be closed in a “first wave” heading into the balance of Bed Bath & Beyond’s fiscal year, which ends in February. The company has about 900 stores.
“They are running out of cash and desperately need to raise cash just to keep the business going,” said Jim Dixon, equity sales trader at Mirabaud.
To improve its finances, the retailer said it would cut back on selling, general and administrative expenses by $250 million this year versus last year and rein in capital spending.
The company also estimates that comparable-store sales will drop 20% this year as it works through its transformation.
“We are broadly satisfied that the measures announced today … will ease the pressure on the company, allowing it to continue trading,” said Neil Saunders, GlobalData’s managing director.
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Reporting by Uday Sampath and Deborah Sophia and Bansari Kamdar in Bengaluru; Additional reporting by Siddharth Cavale, Jessica DiNapoli and Arriana Mclymore in New York;
Editing by Arun Koyyur and Jonathan Oatis
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A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 29, 2022. REUTERS/Brendan McDermid
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Best Buy sales beat estimates as discounts spur demand
Jobs openings in July rise sharply
Dow down 1.02%, S&P 500 down 1.22%, Nasdaq down 1.45%
Aug 30 (Reuters) – U.S. stocks slumped for the third straight session on Tuesday as a rise in job openings fueled concerns that the U.S. Federal Reserve has another reason to maintain its aggressive path of interest rate hikes to combat inflation.
The benchmark S&P 500 index (.SPX) has tumbled more than 5% since Fed Chair Jerome Powell on Friday reaffirmed the central bank’s determination to raise interest rates even in the face of a slowing economy. read more
Labor demand showed no signs of cooling as U.S. job openings rose to 11.239 million in July and the prior month was revised sharply higher. A separate report showed consumer confidence rebounded strongly in August after three straight monthly declines. read more
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“It feeds into a strong labor market, it is also pointing to no apparent concern by consumers and that plays counter to what the market is really looking for,” said Andre Bakhos, managing member at Ingenium Analytics LLC in Plainsboro, New Jersey.
“One would construe this normally as good news, however, we have the inflation part that is the concern and these types of numbers do not play well with trying to bring down inflation, at least that is the market’s perception.”
The data heightens the focus on the August non-farm payrolls data due on Friday.
The Dow Jones Industrial Average (.DJI) fell 327.54 points, or 1.02%, to 31,771.45, the S&P 500 (.SPX) lost 49.12 points, or 1.22%, to 3,981.49 and the Nasdaq Composite (.IXIC) dropped 173.88 points, or 1.45%, to 11,843.79.
New York Fed President John Williams said on Tuesday the central bank will likely need to get its policy rate about 3.5% and is unlikely to cut interest rates at all next year as it fights inflation.
However, Atlanta Fed President Raphael Bostic said in an essay published on Tuesday the Fed could “dial back” from its recent string of 75 basis point hikes if new data shows inflation is “clearly” slowing while Richmond Fed President Thomas Barkin said the Fed’s pledge to bring inflation down to its 2% goal will not necessarily result in a severe recession. read more
Traders are pricing in a 74.5% chance of a third straight 75-basis point rate hike at the Fed’s September meeting.
Each of the 11 S&P 500 sectors were in negative territory, with the energy sector (.SPNY) down 3.27% as oil prices slid more than 5% on concerns that slowing of global economies could sap demand. read more
The benchmark 10-year Treasury yield erased early morning losses to trade higher at 3.119%.
Rate-sensitive megacap growth and technology stocks such as Microsoft Corp (MSFT.O), down 1.32%, and Apple Inc (AAPL.O), offf 1.69%, were the biggest drags on the benchmark index.
Both the S&P 500 and the Nasdaq have broken below their 50-day moving average. The S&P 500 also briefly fell below the 50% Fibonacci retracement level from its June low to August high, another key technical indicator watched by analysts as support.
SPX technical
The CBOE Volatility index, also known as Wall Street’s fear gauge, rose for the third straight session and was last trading at 26.92 points.
Adding to worries, Taiwan’s military fired warning shots at a Chinese drone which buzzed an islet controlled by Taiwan near the Chinese coast. read more
Best Buy Co (BBY.N), however, rose 2.25%, the biggest gainer on the S&P 500 after it reported a smaller-than-expected drop in quarterly comparable sales thanks to steep discounts. read more
Declining issues outnumbered advancing ones on the NYSE by a 4.83-to-1 ratio; on Nasdaq, a 2.92-to-1 ratio favored decliners.
The S&P 500 posted no new 52-week highs and 18 new lows; the Nasdaq Composite recorded 7 new highs and 196 new lows.
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Reporting by Chuck Mikolajczak; Editing by David Gregorio
Our Standards: The Thomson Reuters Trust Principles.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 21, 2022. REUTERS/Brendan McDermid
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Walmart cuts profit forecast; news hits retailers
McDonald’s up as sales, profit top estimates
Coca-Cola up on forecast raise
Indexes down: Dow 0.8%, S&P 500 1.3%, Nasdaq 2%
NEW YORK, July 26 (Reuters) – U.S. stocks were sharply lower on Tuesday afternoon, with Nasdaq down more than 2%, as a profit warning by Walmart dragged down retail shares and fueled fears about consumer spending.
Walmart (WMT.N) shares fell 8% after the retailer cut its full-year profit forecast late on Monday. Walmart blamed surging prices for food and fuel, and said it needed to cut prices to pare inventories. read more
Shares of Target Corp (TGT.N) declined 3.8% and Amazon.com Inc (AMZN.O) dropped 5.1%. read more
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Also, Amazon said it would raise fees for delivery and streaming service Prime in Europe by up to 43% a year. read more
Amazon was among the biggest drags on the Nasdaq and S&P 500, while consumer discretionary (.SPLRCD) fell more than 3% and led declines among S&P 500 sectors.
“The majority of companies that reported today beat earnings, and that’s been the case. But of course there have been some warnings, and that’s what the market is focusing on,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“Walmart basically pulled the plug, and most retailers are lower across the board.”
Meanwhile, Coca-Cola Co (KO.N) gained 1.9% after the company raised its full-year revenue forecast. McDonald’s Corp (MCD.N) rose 3% after beating quarterly expectations. read more
A busy week for earnings includes reports from Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O) after the bell. Microsoft was down 3.4% and Alphabet was down 2.9%.
The Dow Jones Industrial Average (.DJI) fell 239.66 points, or 0.75%, to 31,750.38, the S&P 500 (.SPX) lost 52.28 points, or 1.32%, to 3,914.56 and the Nasdaq Composite (.IXIC) dropped 239.38 points, or 2.03%, to 11,543.29.
The Federal Reserve started a two-day meeting and on Wednesday, it is expected to announce a 0.75 percentage point interest rate hike to fight inflation. read more Investors have worried that aggressive interest rate hikes by the Fed could tip the economy into recession.
Earnings from S&P 500 companies are expected to have risen 6.2% for the second quarter from the year-ago period, according to Refinitiv data.
Among the week’s heavy slate of economic news, data Tuesday showed U.S. consumer confidence dropped to nearly a 1-1/2-year low in July, pointing to slower economic growth at the start of the third quarter. read more
Advance second-quarter GDP data on Thursday is likely to be negative after the U.S. economy contracted in the first three months of the year.
Declining issues outnumbered advancing ones on the NYSE by a 1.82-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored decliners.
The S&P 500 posted 1 new 52-week highs and 30 new lows; the Nasdaq Composite recorded 32 new highs and 123 new lows.
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Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur, Anil D’Silva and David Gregorio
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June 29 (Reuters) – Bed Bath & Beyond Inc (BBBY.O) on Wednesday replaced Chief Executive Officer Mark Tritton as part of a management shake-up to reverse a slump in its business, the home goods retailer said.
Shares fell 13% in premarket trading as the company’s first-quarter net sales slumped 25%, rounding off a year of sales slipping below market expectations.
The rejig at the top management comes just a few months after activist investor and billionaire Ryan Cohen criticized the retailer for an “overly ambitious” strategy, overpaying top executives and failing to reverse market share losses.
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Cohen, who is also the chairman of GameStop Corp (GME.N), had disapproved of Tritton’s $27 million compensation over the last two years, saying it was far more than what top bosses earned at bigger retailers including Macy’s (M.N), Kohl’s (KSS.N), and Dollar Tree (DLTR.O).
An exterior view shows a Bed Bath & Beyond store in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin
“Mr. Tritton should recognize that chief executives who are awarded outsized compensation and seek frequent publicity also invite much higher expectations when it comes to growth and shareholder value creation,” Cohen said in March.
The company subsequently reached an agreement with Cohen by appointing three new directors, two of them to the committee exploring options for its baby products unit.
On Wednesday, it named the head of the strategy committee and independent director Sue Gove as Tritton’s replacement on an interim basis.
Tritton was made CEO in 2019 soon after the retailer settled with another set of activist investors who had criticized it for failing to adapt quickly to a shift in consumer preference to shop online.
Bed Bath & Beyond also replaced its chief merchandising officer Joe Hartsig with Mara Sirhal, general manager of its Harmon health and beauty stores, as it looks to overcome supply chain issues that have plagued it for most of the pandemic.
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Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur
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May 4 (Reuters) – Wall Street’s main indexes fell on Wednesday as a rise in U.S. Treasury yields hit growth stocks ahead of a widely expected interest-rate hike that could be the biggest since 2000.
Six of the 11 major S&P sectors rose, with energy (.SPNY) and utilities (.SPLRCU) leading the gains.
Bank stocks were up 0.3% after U.S. Treasury two-year yields, the most sensitive to the Federal Reserve’s interest rate outlook, soared to their highest since Nov 2018. The benchmark 10-year yield topped 3% for a third consecutive day.
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Strengthening yields continued to haunt megacap growth stocks. Microsoft Corp (MSFT.O), Google-parent Alphabet Inc (GOOGL.O), Meta Platforms (FB.O), Tesla (TSLA.O), Amazon.com (AMZN.O) and Nvidia (NVDA.O) fell between 1.5% and 4.1% and weighed on the S&P 500 and the Nasdaq.
“There is this expectation that the Fed is going to be raising (rates) by 50 basis points and that they’re going to start providing more color on winding down their balance sheet,” said Michelle Cluver, portfolio strategist at Global X ETFs.
“This is all leading to more pressure on growth equities and putting upward pressure on your 10-year treasury yields.”
Fed policymakers have widely telegraphed a double-barreled decision that would lift the Fed’s short-term target policy rate to a range between 0.75% and 1%, and set in motion a plan to trim its $9 trillion balance sheet. read more
The policy statement is due at 2 p.m. EDT (1800 GMT).
The spotlight will be on Fed Chair Jerome Powell’s news conference for fresh clues on how far and how fast the central bank is prepared to go in an effort to bring down decades-high inflation.
Concerns about a hit to economic growth due to a hawkish Fed, mixed earnings from some big growth companies, the conflict in Ukraine and pandemic-related lockdowns in China have hammered Wall Street recently, with richly valued growth stocks bearing the brunt of the sell-off.
“There’s still a lot of uncertainty in the economy, and you’re also seeing slowing economic growth and headwinds globally that could adversely affect earnings and stocks going forward. I’m not yet willing to say it’s the bottom, but we have come down quite a lot,” Cluver said.
Two separate sets of data showed private employers hired the fewest workers in two years last month, while expansion in the services sector unexpectedly lost some momentum in April. read more
At 11:38 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 86.54 points, or 0.26%, at 33,042.25, the S&P 500 (.SPX) was down 23.62 points, or 0.57%, at 4,151.86, and the Nasdaq Composite (.IXIC) was down 184.93 points, or 1.47%, at 12,378.83.
Starbucks Corp (SBUX.O) gained 5.5% after the coffee chain saw quarterly comparable sales grow 12% in North America. read more
Livent Corp (LTHM.N) surged 21.2% after it posted a better-than-expected quarterly profit and bolstered its 2022 revenue outlook on higher demand for lithium used in electric vehicle batteries. read more
Declining issues outnumbered advancers for a 2.03-to-1 ratio on the NYSE and for a 2.46-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 37 new lows, while the Nasdaq recorded 22 new highs and 297 new lows.
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Reporting by Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Anil D’Silva
Our Standards: The Thomson Reuters Trust Principles.