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Business

Netflix, Lululemon, DocuSign and more

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Check out the companies making the biggest moves midday:

Lululemon — Shares of Lululemon fell 12% after the athletic apparel company gave a weaker-than-expected fourth-quarter outlook. In the third quarter, the company beat Wall Street’s expectations on the top and bottom lines.

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Beyond Meat — Beyond Meat’s stock dropped more than 8% after being downgraded by Argus to sell from hold. The firm’s analyst cited falling demand amid weaker economic conditions.

Broadcom — Broadcom gained 3.1% after giving an upbeat revenue forecast and reporting better-than-expected quarterly results after the bell Thursday. The chipmaker also increased its dividend by 12.2% and said it would resume stock buybacks.

Tesla — Tesla’s stock was up more than 4%, paring some of the losses it suffered this week. Reuters reported on Friday the electric-vehicle maker will suspend Model Y assembly at its Shanghai plant between Dec. 25 and Jan. 1. Inventory levels at the plant had risen sharply over the summer.

Carvana — Shares of Carvana rose 2% after lenders told The Wall Street Journal that they don’t anticipate the online car seller will file for bankruptcy soon. These debtholders are joining together amid reports earlier this week that the company is looking to restructure its debt, the paper said. Carvana had seen success during the pandemic, but rising interest rates and weaker car demand have hurt its performance.

Netflix — Netflix gained 5% after being named a “best idea” for 2023 by Cowen and being upgraded by Wells Fargo to overweight from equal weight. Cowen said it sees free-cash flow ramping up next year, while Wells Fargo said content growth would lessen customer churn.

RH — RH, formerly known as Restoration Hardware, rose 4.5% after reporting third-quarter earnings-per-share and revenue that beat expectations. However, the retailer also said it expected business trends to deteriorate.

Coinbase — Shares of the crypto services firm fell 2.6% after Mizuho downgraded Coinbase and said its price could fall another 30%. Crypto equities such as Coinbase have been under pressure with cryptocurrency prices, as investors digest the macro picture and the latest developments on FTX.

DocuSign — Shares of DocuSign jumped 16% after the electronic signature company posted upbeat quarterly results. It also reported better-than-expected billings, subscription renewals and additional sales to existing customers.

Costco — The wholesaler gained 1.6% after Cowen named the stock a “best idea” heading into 2023, noting the company’s focus on value could be a winning strategy as consumers get more price conscious.

AmerisourceBergen — AmerisourceBergen fell 2.7% after Walgreens sold about $1 billion shares of the drug distributor. Walgreens remains its largest shareholder, with its stake now down to 17% from 20%.

Vale — The Brazil-based mining company gained 3.5% after Morgan Stanley upgraded the stock to overweight from equal weight, citing a “cocktail” of positive catalysts such as price momentum for iron ore and China exiting its Covid-zero policy.

Bath & Body Works — Shares of Bath & Body Works gained rose 2.1% after activist investor Dan Loeb boosted his stake in the retailer. Loeb said he might push for board charge to improve governance issues at the company.

— CNBC’s Carmen Reinicke, Alexander Harring, Tanaya Macheel and Christina Cheddar-Berk contributed reporting.

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Business

Kohl’s terminates sale talks with Vitamin Shoppe owner Franchise Group: Sources

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A Kohl’s store in San Rafael, Calif.

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Kohl’s is terminating talks to sell its business to The Vitamin Shoppe owner Franchise Group, two people familiar with the matter told CNBC on Thursday.

The people requested anonymity because a decision from Kohl’s has not been publicly announced.

Representatives from Kohl’s and Franchise Group didn’t immediately respond to CNBC’s requests for comment.

This decision from Kohl’s comes as its stock price slumps and its sales decline. It has faced months of pressure from activist investors to pursue a sale and shake up the business with a new slate of board directors. It wasn’t immediately clear what path Kohl’s would take next.

Financing such a deal has also become more difficult due to volatility in the stock market and broader economy, as the Federal Reserve jacks up interest rates to counter surging inflation. Walgreens Boots Alliance earlier this week scrapped its plan to sell its U.K. pharmacy chain, Boots, saying no third party was able to make an adequate offer due to turmoil in the global financial markets.

Franchise Group had been weighing lowering its bid for Kohl’s to closer to $50 per share from about $60, CNBC reported last week, citing a person familiar with the matter. The shift in thinking came as the outlook for the retail industry grew increasingly grim, the person said, as fears of a recession mounted.

Franchise Group in early June proposed a bid of $60 per share to acquire Kohl’s at a roughly $8 billion valuation. The two companies then entered an exclusive three-week window during which they can firm up any due diligence and final financing arrangements. That ran its course this past weekend.

Kohl’s shares closed Thursday at $35.69. At one point during the day the stock touched a 52-week low of $34.33. Kohl’s ended the day with a market valuation of roughly $4.6 billion, its shares down about 28% so far this year.

Kohl’s earlier this year received a per-share offer of $64 from Starboard-backed Acacia Research, but it deemed the bid to be too low.

Activist firm Macellum Advisors has been pushing for Kohl’s to consider a sale or consider other strategic alternatives since January. Macellum was also arguing for Kohl’s to revamp its slate of directors, arguing the retailer, under Chief Executive Officer Michelle Gass, has underperformed in recent years compared with its peers.

Macellum didn’t immediately respond to a request for comment.

In mid-May, however, Kohl’s shareholders voted to reelect the company’s current slate of 13 board directors, thereby defeating Macellum’s proposal.

In recent weeks, the outlook for the retail industry has grown bleaker as consumers pull back their spending on certain discretionary categories, such as home goods and apparel, amid inflation and the threat of an economic slowdown.

High-end furniture chain RH on Wednesday cut its forecast for revenue in fiscal 2022, anticipating softer consumed demand for its products in the back half of the year. Bed Bath & Beyond saw its sales plummet in its most recent quarter and ousted its CEO.

Companies are also seeing inventories pile up as shipments of goods arrive later than planned, due to supply chain snags. Big-box retailer Target in early June warned investors that its profits will take a short-term hit, as it marks down unwanted items, cancels orders and takes aggressive steps to get rid of extra inventory.

Kohl’s sales for the three-month period ended April 30 fell to $3.72 billion from $3.89 billion in 2021. When it reported these figures in mid-May, the retailer also slashed its profit and revenue forecasts for the full fiscal year, further muddying the picture for a potential deal.

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Business

Turning Point Therapeutics, Lululemon, RH and others

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Check out the companies making headlines before the bell:

Turning Point Therapeutics (TPTX) – The biopharmaceutical company’s shares more than doubled in premarket trading after agreeing to be acquired by Bristol Myers Squibb (BMY) for $76 per share in cash, or $4.1 billion. Turning Point specializes in cancer treatments.

Lululemon (LULU) – Lululemon shares rose 1% in premarket trading after the athletic apparel and leisurewear maker reported a better-than-expected quarter and raised its full-year forecast. Lululemon beat estimates by 5 cents with a quarterly profit of $1.48 per share, amid continued strong demand for premium sportswear.

RH (RH) – RH slipped 4% in the premarket after the luxury home goods company issued a weaker-than-expected revenue outlook for the full year. RH reported better-than-expected profit and sales for its latest quarter and announced a $2 billion expansion of its stock buyback program.

CrowdStrike (CRWD) – CrowdStrike fell 4.3% in premarket action even though the cybersecurity company posted better-than-expected results for its latest quarter and issued an upbeat outlook. CrowdStrike stock had surged 7.8% Thursday ahead of the earnings report.

Kohl’s (KSS) – Kohl’s shares rallied 7.3% in premarket trading after the Wall Street Journal reported that the retailer received takeover bids from private equity firm Sycamore Partners and retail holding company Franchise Group. Sycamore’s bid is said to value Kohl’s in the mid-$50s per share, while Franchise Group is offering about $60. Kohl’s had closed Thursday at $41.18.

Tesla (TSLA) – Tesla shares slid 4.7% in the premarket following a report that CEO Elon Musk ordered an immediate hiring freeze and a 10% reduction in staff. The order came in a memo seen by Reuters, which quoted Musk as saying he feels “super bad” about the economy.

Coinbase (COIN) – Coinbase is extending a hiring freeze and rescinding some job offers that had been accepted. The cryptocurrency exchange operator said in a blog post that it would pause hiring for “as long as this macro environment requires.” Coinbase fell 3.7% in premarket trading.

Alaska Air (ALK) – The airline boosted its current-quarter revenue outlook, saying it is experienced sustained strong demand. Alaska Air also said stronger revenue is offsetting higher costs for fuel. The stock added 1% in the premarket.

Okta (OKTA) – The identity management software company’s stock surged 15.6% in the premarket after it reported better-than-expected results for its fiscal first quarter. Okta said it is not seeing any impact from the security breach of its systems in March, nor from macroeconomic conditions. The premarket surge in Okta shares follows a nearly 11% gain in Thursday’s trading.

Chegg (CHGG) – The education technology company’s shares rallied 6.3% in premarket trading after it announced a $1 billion increase in its share repurchase program.

PagerDuty (PD) – The cloud computing company reported better-than-expected revenue for its latest quarter and a smaller-than-expected loss. The company also anticipates it will report an annual profit next year. PagerDuty added 3.2% in the premarket.

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Business

Micron, Lululemon, RH and more

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The headquarters building of Micron Technology Inc. stands in Boise, Idaho, U.S.

Matthew Staver | Bloomberg | Getty Images

Check out the companies making headlines in extended trading.

Micron — Shares of the chip maker advanced more than 4% after hours, after the company reported financial results for its most recent quarter. Micron beat Wall Street estimates on both quarterly earnings and revenue. It also gave positive revenue and adjusted earnings guidance for its third quarter.

Lululemon — The athleisure apparel maker’s share jumped about 7% following the company’s quarterly earnings report. Lululemon reported earnings that were about 9 cents higher than analysts estimated, although it reported a revenue miss. It also announced a $1 billion stock buyback program.

RH — The home furnishings retailer saw shares decline by more than 5% following its quarterly results. While RH reported an earnings beat for the most recent quarter, it also reported revenue of $901.5 million, compared to estimates of $931.8 million. The company also announced a 3-for-1 stock split that will take place in the spring.

Chewy — The pet supply company tumbled after hours after reporting a wider than expected quarterly loss of 15 cents per share, versus the estimate of 8 cents, and a revenue miss. It also issued weak revenue guidance for the first quarter and the full year.

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Business

Stock futures are flat ahead of consumer confidence data

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Stock futures were flat in overnight trading ahead of Tuesday’s consumer confidence data and a big week for economic data.

Futures on the Dow Jones Industrial Average and S&P 500 were flat, while Nasdaq 100 futures inched 0.1% lower.

During Monday’s regular trading session, the Dow Jones Industrial Average rose 94.65 points or 0.27%. The S&P 500 climbed 0.7%, while the Nasdaq Composite gained 1.31%.

The gains came amid a tech-heavy market rally during regular trading led by shares of Tesla, which rose 8% on news that it will ask shareholders to split its stock to pay dividends to investors.

“I think anyone has to be impressed with the resiliency of the market and I go back to there is no alternative,” Erin Browne, PIMCO’s managing director and portfolio manager, told CNBC’s “Closing Bell: Overtime” on Monday. “Do you want to invest in bonds when you know that the Fed is raising rates or do you want to invest in equities where you can get some type of dividend return, you can get real earnings growth and it’s gonna give you a comfortable return in your portfolios?”

Meanwhile, the 5-year Treasury note rose above the 30-year on Monday, marking the first inversion since 2006. The shift stoked some recession fears, although economists typically watch the spread between the 2-year and 10-year rate, which remains positive.

Oil prices, which have fluctuated in recent weeks amid the ongoing geopolitical tensions abroad, fell on Monday. Both U.S. West Texas Intermediate (WTI) crude futures and Brent crude futures slid about 7%, settling at $105.96 and $112.48 per barrel, respectively. The slide led energy stocks such as Chevron to tumble.

Market watchers continue to monitor the ongoing war between Russia and Ukraine as peace talks are set to continue in Turkey. Meanwhile, investors are also watching the Fed, as more Wall Street banks pencil in half-point increases after chair Jerome Powell indicated that more aggressive hikes are possible.

Investors are awaiting consumer confidence and home price data to be released Tuesday, ahead of Friday’s monthly jobs report. Economists expect to see 460,000 jobs added in March and the unemployment rate to fall to 3.7%, according to Dow Jones estimates.

Lululemon Athletica and RH will also report earnings after the bell on Tuesday.

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Business

Moderna, Lululemon, GameStop and more

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Moderna’s sign is seen outside of their headquarters in Cambridge, MA on March 11, 2021.

Boston Globe | Getty Images

Check out the companies making headlines in midday trading.

Moderna — Shares of the drug maker rose more than 7% after announcing it’s developing a two-in-one vaccine booster shot that protects against both Covid-19 and the seasonal flu. The new vaccine, which the company is calling mRNA-1073, combines Moderna’s current Covid vaccine with a flu shot that’s also under development, according to a press release.

Lululemon — The athleisure brand jumped 12% and hit an all-time high after reporting strong second-quarter earnings and said it’s on track to hit a 2023 revenue target ahead of schedule. The company has outperformed other retailers during the pandemic and is poised to continue to even as people return to offices.

GameStop — Shares of the video game retailer fell 2.7% even after the company posted a narrower loss in the second quarter compared with a year prior and rising sales. The retailer was light on providing an outlook for the upcoming quarters and details on its e-commerce transformation, which disappointed Wall Street analysts. The meme stock favored by Reddit traders is still up over 900% this year.

Boston Beer — Shares of the alcoholic beverage lost over 4% after it pulled its earnings guidance late Wednesday amid a slowdown in sales of its hard seltzer brand Truly. That development came just a few weeks after the company blamed weaker-than-expected second-quarter earnings on poor Truly sales, leading it to cut its full-year forecast.

RH — Shares of the furniture retailer popped nearly 8% after beating on the top and bottom lines of its quarterly results. RH earned $8.48 per share, topping estimates of $6.48 per share, according to Refinitiv. Revenue came in at $988.8 million, above expectations of $975.4 million.

Caesars Entertainment — Caesars shares gained 3% after the company announced it will sell the non-U.S. assets of its William Hill sports betting unit to British gambling firm 888 Holdings. The deal is worth about 2.2 billion pounds, or roughly $3 billion.

NetEase — Chinese regulators summoned NetEase and other gaming companies to remind them of restrictions on game time for children. Shares of NetEase retreated 2.7%.

Analog Devices — Analog Devices shares added 2.8% after the company announced its acquisition of rival chip maker Maxim Integrated Products is expected add to adjusted earnings in 12 months after closing, six months sooner than previously expected. Analog Devices said it expects the acquisition to be neutral to adjusted earnings in fiscal 2022.

Macy’s — Shares of the retailer gained 1.5% after Cowen upgraded the stock to an outperform rating, saying the stock can jump almost 30%. The firm pointed to the retailer’s digital push, as well as product innovation and pricing management as factors that will drive upside. Shares of Macy’s have nearly doubled this year.

Ford — Shares of Ford dipped 1.4% after the automaker said it would end vehicle production in India, costing about $2 billion. The company is shutting down two large plants in the country and about 4,000 people are expected to lose their jobs.

Blade Air Mobility — Shares of Blade surged over 15% after JPMorgan said the aerial ride-sharing company could be the Uber of the skies. The firm predicts an 80% rally ahead for Blade and believes the aerial ride-sharing market could be worth tens of billions of dollars within a decade.

Leslie’s — Shares of Leslie’s rose 2.6% after Stifel initiated coverage of the pool stock with a buy rating. The firm said the stock is currently undervalued as Leslie’s is poised to “build upon its leading market share” in the pool and spa market.

— CNBC’s Pippa Stevens, Yun Li, Maggie Fitzgerald and Tanaya Macheel contributed reporting

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Business

Rite Aid, Coherent, RH, Nike & more

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Take a look at some of the biggest movers in the premarket:

Rite Aid (RAD) – Rite Aid expects to report a loss for its just-concluded fiscal year, compared to analysts’ forecasts of a $125 million profit. The drugstore chain was hit by a 37% drop in sales of cold, cough and flu-related products, as people suffered from these maladies far less due to pandemic-related lockdowns. Rite Aid shares plunged 18.6% in premarket action.

Walgreens (WBA) – The drugstore operator’s stock fell 2% in the premarket, possibly in sympathy with Rite Aid. Deutsche Bank also labeled the stock a “catalyst call buy idea,” noting short-term issues but saying the Covid vaccine could provide a positive opportunity for Walgreens in both the near and longer-term.

Darden Restaurants (DRI) – The parent of Olive Garden and other restaurant chains reported quarterly earnings of 98 cents per share, well above the consensus estimate of 69 cents a share. Revenue beat estimates as well, and although same-restaurant sales tumbled 26.7% from a year ago, that was a smaller drop than the 31.2% anticipated by analysts polled by FactSet. Darden shares rose 4.2% in premarket trading.

Coherent (COHR) – Coherent accepted a takeover proposal by optical components maker II-VI (IIVI), ending a long bidding battle between II-VI and optical fiber company Lumentum (LITE). Coherent – a provider of lasers and related technology – approved the bid of $220 per share in cash and 0.91 II-VI shares for each Coherent share, and will pay Lumentum a breakup fee of $217.6 million. II-VI tumbled 8% while Lumentum jumped 7.2% in the premarket.

RH (RH) – RH reported quarterly earnings of $5.07 per share, beating the consensus estimate of $4.76 a share. The Restoration Hardware parent also saw revenue beat analysts’ forecasts. RH reported strong demand for its high-end furniture and other luxury products, and expects current-quarter revenue to grow by at least 50%. RH shares surged 8.4% in premarket action.

KB Home (KBH) – KB Home beat estimates by 10 cents a share, with quarterly profit of $1.02 per share. The home builder’s revenue missed analysts’ projections despite a 23% rise in net orders and a 4% increase in deliveries. KB Home shares dropped 1.9% in premarket trading.

AstraZeneca (AZN) – The drugmaker said an updated analysis of its Covid-19 vaccine’s U.S. trial showed 76% efficacy, compared to 79% in a report earlier this week. The earlier report had not included more recent infections and came under some scrutiny from an independent data monitoring board.

Nike (NKE) – Nike is the target of criticism on Chinese social media for a statement in which the athletic footwear and apparel maker said it was “concerned” about reports of forced labor in Xinjiang. Nike also said it does not source products from the region. The shares fell 4.5% in premarket trading.

H.B. Fuller (FUL) – H.B. Fuller reported quarterly profit of 66 cents per share, 19 cents a share above estimates. Revenue also topped Wall Street forecasts. The maker of adhesives, sealants and other industrial products saw particular strength in health and hygiene-related products, although it saw weakness in construction adhesives. Fuller shares surged 6.2% in premarket action.

Royal Philips (PHG) – The health technology company struck a deal to sell its Domestic Appliances unit to investment firm Hillhouse Capital for about $4.4 billion. The transaction includes the right for Hillhouse to use the Philips brand name for 15 years, with the possibility of renewal. Philips shares added 1.6% in the premarket.

Advanced Micro Devices (AMD) – The chip maker’s stock rose 1% in premarket trading after Northland Capital Markets upgraded the stock to “outperform” from “market perform.” Northland called Intel’s (INTC) move to re-enter the foundry business as a “strategic faux pas” and said AMD stood to benefit as a result.

ViacomCBS (VIAC) – The media company’s stock remains on watch after a more than 30% tumble over the past two sessions. That followed the company’s announcement that it would raise $3 billion through stock sales. It fell another 1.1% in the premarket.

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Business

The bond market is dictating stock trading

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Tech stocks climbed Friday to end the week on a high note, but CNBC’s Jim Cramer expects more downside in the tech cohort as investors continue to rotate out of high-growth names.

“Like it or not, stocks are joined at the hip with the bond market right now,” the “Mad Money” host said.

As bond rates rise amid early signs of an economic recovery, investors are fleeing from riskier growth stocks to cyclical ones, particularly bank and industrial stocks that have underperformed, Cramer said.

The tech-heavy Nasdaq Composite has fallen in recent weeks and remains down 7% from its high about a month ago. The rotation from tech to value stocks, however, won’t last forever, Cramer said.

“Either tech stocks get too low … or long-term interest rates get too high. Until that happens, the rotation will just continue to play out,” he said. “We aren’t there yet, but I’m confident that we’ll get there eventually because that’s what always ends these vicious kinds of rotations.”

Cramer revealed what’s circled on his calendar in the week ahead. Corporate performance projections are based on FactSet estimates:

Tuesday: GameStop, Adobe

GameStop

  • Q4 earnings release: after market; conference call: 5 p.m.
  • Projected EPS: $1.35
  • Projected revenue: $2.21 billion

“The bulls hope to learn on this call more about [Ryan] Cohen’s plan when the company reports, and if there’s anything good at all about these results, well I expect to see a ton of buying the next day,” Cramer said.

Adobe

  • Q1 2021 earnings release: after market; conference call: 5 p.m.
  • Projected EPS: $2.79
  • Projected revenue: $3.76 billion

“Unfortunately, the results are less important than the state of the Wall Street fashion show,” he said. “If Adobe reports a great quarter and rates are soaring that day, with the yield on the 10-year approaching 2%, then the earnings won’t matter at all.”

Wednesday: RH, GrowGeneration, General Mills

RH

  • Q4 earnings release: after market; conference call: 5 p.m.
  • Projected EPS: $4.73
  • Projected revenue: $797 million

GrowGeneration

  • Q4 earnings release: after market; conference call: Thursday, 9 a.m.
  • Projected EPS: 7 cents
  • Projected revenue: $61.5 million

“You rarely hear those two mentioned in the same sentence, but right now they represent the most exciting parts of retail,” Cramer said about RH and GrowGeneration.

“I suspect they’ll both report excellent quarters,” he said. “Home furnishings are the most popular part of retail purchasing right now, as we saw from the incredible quarter Williams-Sonoma just delivered, and the cannabis culture … [has] been an unstoppable force as state after state embraces legalization.”

General Mills

  • Q3 2021 earnings release: before market; conference call: 9 a.m.
  • Projected EPS: 84 cents
  • Projected revenue: $4.45 billion

“I like this one as a way to take the temperature of the pantry stocks,” the host said. “I think the reaction will be tepid, but then again Smucker surprised to the upside and I like Hormel very much. So let’s take a listen.”

Thursday: Darden Restaurants

Darden Restaurants

  • Q3 2021 earnings release: before market; conference call: 8:30 a.m.
  • Projected EPS: 68 cents
  • Projected revenue: $1.61 billion

“Do you know we have 150,000 [restaurants] that have closed? It means that the survivors should be in an incredible position, which is why I expect them to crush numbers,” Cramer said of Darden. “The stock’s had a big run, but I think the scarcity value of the stock and the last-man-standing thesis make it compelling.”

Disclosure: Cramer’s charitable trust owns shares of Facebook, Amazon, Goldman Sachs, JPM organ Chase and Wells Fargo.

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