{"id":61506,"date":"2022-05-24T08:54:59","date_gmt":"2022-05-24T12:54:59","guid":{"rendered":"https:\/\/www.t3live.com\/blog\/?p=61506"},"modified":"2022-05-24T09:01:56","modified_gmt":"2022-05-24T13:01:56","slug":"coffee-with-greta-more-retailers-rocked-by-inflation","status":"publish","type":"post","link":"https:\/\/blog.t3live.com\/2022\/05\/24\/coffee-with-greta-more-retailers-rocked-by-inflation\/","title":{"rendered":"Coffee With Greta: Snap Collapses on Awful Guidance"},"content":{"rendered":"

Editor's Note:<\/strong> Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here<\/span><\/a><\/strong>.<\/p>\n

********<\/p>\n

DJIA Futures: <\/b>-203 (-0.6%)<\/span><\/p>\n

SPX Futures: <\/b>-42 (-1.1%)<\/span><\/p>\n

NASDAQ Futures: <\/b>-204 (-1.7%)<\/span><\/p>\n

Good morning friends!<\/span><\/p>\n

Futures are lower as traders digest a sales warning from a major social media company plus more disappointing retail earnings.<\/span><\/p>\n

Let\u2019s get right to it!<\/span><\/p>\n

Snap Tanks On Q2 Sales Warning<\/strong><\/h2>\n

Snap <\/b>(SNAP) shares are plummeting 33.2% ahead of the open after warning it will miss its own revenue and EPS expectations in the current quarter.\u00a0<\/span><\/p>\n

The company filed an <\/span>8-K<\/span><\/a> with the SEC, saying \u201cthe macroeconomic environment has deteriorated further and faster than anticipated\u201d since releasing guidance on April 21.\u00a0<\/span><\/p>\n

The filing said, \u201cwe believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range.\u201d<\/span><\/p>\n

In a letter to employees, CEO Evan Spiegel also said Snap will slow hiring as they work to lower costs. <\/span>
\n<\/span>
\n<\/span>Spiegel said the company will still recruit new employees and he expects to hire 500 more before the end of the year.<\/span><\/p>\n

That\u2019s a slowdown from the 2,000 employees Snap has hired over the past 12 months.\u00a0<\/span><\/p>\n

The Snapchat parent company is the latest tech company to slow hiring this year, following the lead of giants like <\/span>Meta Platforms <\/b>(FB) and <\/span>Twitter <\/b>(TWTR).<\/span><\/p>\n

In a letter to employees, CEO Evan Speigel said the social media company will also slow hiring through the end of 2022.\u00a0<\/span><\/p>\n

Best Buy Slips On Earnings Miss, Downgraded Outlook<\/strong><\/h2>\n

Best Buy <\/b>(BBY) shares are slipping 2.5% ahead of the open after missing Q1 profit expectations.\u00a0<\/span><\/p>\n

The retailer reported adjusted earnings of $1.57 per share vs expectations for $1.61.\u00a0<\/span><\/p>\n

$10.65 billion in revenue was better than expectations for $10.41 billion.\u00a0<\/span><\/p>\n

Best Buy\u2019s same-store sales fell 8% year-over-year, better than analysts\u2019 expectations for an 8.6% decline.\u00a0<\/span><\/p>\n

The CEO said the economic backdrop has worsened since its investor day and \u201cas a result, we are revising our sales and profitability expectations for the year.\u201d<\/span><\/p>\n

The company forecast full-year revenue between $48.3 billion and $49.9 billion, down from its previous outlook from $49.3 billion to $50.8 billion.<\/span><\/p>\n

Best Buy expects same-store sales to drop between 3% and 6% vs the previous forecast for 1% to 4%.\u00a0<\/span><\/p>\n

Full-year adjusted earnings are now expected to range between $8.40 and $9.00 per share compared to the prior outlook for $8.85 to $9.15.<\/span><\/p>\n

Abercrombie & Fitch Plunges On Unexpected Q1 Loss<\/strong><\/h2>\n

Abercrombie & Fitch <\/b>(ANF) shares are plunging 27.8% in premarket tradea after reporting an unexpected loss in fiscal Q1.\u00a0<\/span><\/p>\n

The clothing retailer reported an adjusted loss of $0.27 per share vs analysts\u2019 expectations for earnings of $0.08 per share.\u00a0<\/span><\/p>\n

The company\u2019s $813 million in revenue beat estimates of $799 million.<\/span><\/p>\n

Sales rose 4% year-over-year.<\/span><\/p>\n

The company blamed the profit loss on higher freight and product costs in the quarter.\u00a0<\/span><\/p>\n

Abercrombie slashed its full-year sales outlook, now expecting year-over-year growth to be flat to up to 2%.\u00a0<\/span><\/p>\n

The company previously forecast sales growth between 2% and 4% this year and analysts\u2019 were expecting 3.5% growth.<\/span><\/p>\n

Zoom Jumps on Earnings Beat, Strong Guidance<\/strong><\/h2>\n

Zoom <\/b>(ZM) shares are up 3.4% in premarket trade after beating Q1 earnings expectations and issuing strong Q2 guidance.<\/span><\/p>\n

The video chat company reported adjusted earnings of $1.03 per share on $1.07 billion in revenue.\u00a0<\/span><\/p>\n

That was better than analysts\u2019 expectations for $0.87 in EPS and in-line with revenue estimates.\u00a0<\/span><\/p>\n

Revenue jumped 12% annually last quarter.\u00a0<\/span><\/p>\n

Zoom forecast Q2 revenue between $1.115 billion and $1.12 billion, which would be up 9.2% year-over-year.\u00a0<\/span><\/p>\n

Analysts were estimating 8.7% growth to $1.1 billion.\u00a0<\/span><\/p>\n

The company forecast Q2 EPS between $0.90 to $0.92 vs analysts\u2019 expectations of $0.87.<\/span><\/p>\n

For fiscal 2022, Zoom is expecting revenue between $4.53 billion and $4.55 billion, in-line with expectations.\u00a0<\/span><\/p>\n

The company sees full-year earnings ranging between $3.70 and $3.77 per share, better than estimates for $3.53.<\/span><\/p>\n

Oil Prices Flat Amid Recession Fea<\/strong>rs<\/span><\/h2>\n

Oil prices are slightly higher amid concerns about a recession and Covid restrictions in China.<\/span><\/p>\n

West Texas Intermediate crude futures are up just 0.1% to over $110 bbl while Brent crude futures are rising 0.2% to over $113 bbl.<\/span><\/p>\n

Beijing is ramping up quarantine restrictions while Shanghai\u2019s lockdown is due to be lifted soon.<\/span><\/p>\n

Although energy traders are worried a recession in the U.S. will cause a decrease in demand, fuel demand remains high now ahead of Memorial Day weekend.<\/span><\/p>\n

Gas Prices Hit 15th Straight Record-High<\/strong><\/h2>\n

U.S. gas prices hit a new record high for the 15th straight day today.<\/span><\/p>\n

AAA<\/span><\/a> shows the national average for regular rose to $4.598\/gal overnight.\u00a0<\/span><\/p>\n

Diesel prices are continuing to cool, slipping to $5.549\/gal today.\u00a0<\/span><\/p>\n

The national average for a gallon of regular has not fallen for nearly a month.<\/span><\/p>\n

The price has either risen or remained flat every single day since April 24.<\/span><\/p>\n

The average is over $4\/gal in every single U.S. state.<\/span><\/p>\n

U.S. Business Activity Expected To Slow<\/strong><\/h2>\n

S&P Global releases its May purchase managers index for both the services and manufacturing sectors at 9:45 a.m. ET.\u00a0<\/span><\/p>\n

The manufacturing PMI is expected to fall to 58 this month from 59.2 in April.\u00a0<\/span><\/p>\n

While the services PMI is expected to drop to 55.4 from 55.6.\u00a0<\/span><\/p>\n

Any reading above 50 still signals an expansion in business activity.\u00a0<\/span><\/p>\n

But both manufacturers and service providers have struggled in recent months with rising costs as inflation remains elevated.<\/span><\/p>\n

New Home Sales Expected To Fall<\/strong><\/h2>\n

The Census Bureau reports new home sales for April at 10:00 a.m. ET.<\/span><\/p>\n

That report is expected to show sales fell to a seasonally adjusted annual rate of 750,000 units last month vs 763,000 in March.\u00a0<\/span><\/p>\n

Last week, the government reported an unexpected slowdown in housing starts in April.\u00a0<\/span><\/p>\n

Builders say they\u2019re seeing a drop in demand as rising mortgage rates pile on top of high costs.\u00a0<\/span><\/p>\n

In Case You Missed It<\/span><\/h2>\n
    \n
  • The Fed\u2019s 2021 Survey of Household Economics and Decisionmaking found Americans were already worried about the economy before inflation surged this year. Just 24% of respondents to the survey said the U.S. economy was in \u201cgood or excellent\u201d condition, down from 26% in 2020. The survey was conducted in October and November 2021. The CPI was at 6.8% in November before surging to 8.5% in March.<\/span><\/li>\n<\/ul>\n
      \n
    • The Biden Administration announced a new economic agreement with 12 Indo-Pacific countries on Monday. The Indo-Pacific Economic Framework is meant to counter China\u2019s influence in the region through cooperation on issues like the supply chain and clean energy. The nations in the agreement are the U.S., Japan, South Korea, Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, India, Australia, and New Zealand.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

      Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -203 (-0.6%) SPX Futures: -42 (-1.1%) NASDAQ Futures: -204 (-1.7%) Good morning friends! Futures are lower as traders digest a sales warning from a major social media company plus more disappointing retail earnings. Let\u2019s get right to it! Snap Tanks On Q2 Sales Warning Snap (SNAP) shares are plummeting 33.2% ahead of the open after warning it will miss its own revenue and EPS expectations in the current quarter.\u00a0 The company filed an 8-K with the SEC, saying \u201cthe macroeconomic environment has deteriorated further and faster than anticipated\u201d since releasing guidance on April 21.\u00a0 The filing said, \u201cwe believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range.\u201d In a letter to employees, CEO Evan Spiegel also said Snap will slow hiring as they work to lower costs. Spiegel said the company will still recruit new employees and he expects to hire 500 more before the end of the year. That\u2019s a slowdown from the 2,000 employees Snap has hired over the past 12 months.\u00a0 The Snapchat parent company is the latest tech company to slow hiring this year, following the lead of giants like Meta Platforms (FB) and Twitter (TWTR). In a letter to employees, CEO Evan Speigel said the social media company will also slow hiring through the end of 2022.\u00a0 Best Buy Slips On Earnings Miss, Downgraded Outlook Best Buy (BBY) shares are slipping 2.5% ahead of the open after missing Q1 profit expectations.\u00a0 The retailer reported adjusted earnings of $1.57 per share vs expectations for $1.61.\u00a0 $10.65 billion in revenue was better than expectations for $10.41 billion.\u00a0 Best Buy\u2019s same-store sales fell 8% year-over-year, better than analysts\u2019 expectations for an 8.6% decline.\u00a0 The CEO said the economic backdrop has worsened since its investor day and \u201cas a result, we are revising our sales and profitability expectations for the year.\u201d The company forecast full-year revenue between $48.3 billion and $49.9 billion, down from its previous outlook from $49.3 billion to $50.8 billion. Best Buy expects same-store sales to drop between 3% and 6% vs the previous forecast for 1% to 4%.\u00a0 Full-year adjusted earnings are now expected to range between $8.40 and $9.00 per share compared to the prior outlook for $8.85 to $9.15. Abercrombie & Fitch Plunges On Unexpected Q1 Loss Abercrombie & Fitch (ANF) shares are plunging 27.8% in premarket tradea after reporting an unexpected loss in fiscal Q1.\u00a0 The clothing retailer reported an adjusted loss of $0.27 per share vs analysts\u2019 expectations for earnings of $0.08 per share.\u00a0 The company\u2019s $813 million in revenue beat estimates of $799 million. Sales rose 4% year-over-year. The company blamed the profit loss on higher freight and product costs in the quarter.\u00a0 Abercrombie slashed its full-year sales outlook, now expecting year-over-year growth to be flat to up to 2%.\u00a0 The company previously forecast sales growth between 2% and 4% this year and analysts\u2019 were expecting 3.5% growth. Zoom Jumps on Earnings Beat, Strong Guidance Zoom (ZM) shares are up 3.4% in premarket trade after beating Q1 earnings expectations and issuing strong Q2 guidance. The video chat company reported adjusted earnings of $1.03 per share on $1.07 billion in revenue.\u00a0 That was better than analysts\u2019 expectations for $0.87 in EPS and in-line with revenue estimates.\u00a0 Revenue jumped 12% annually last quarter.\u00a0 Zoom forecast Q2 revenue between $1.115 billion and $1.12 billion, which would be up 9.2% year-over-year.\u00a0 Analysts were estimating 8.7% growth to $1.1 billion.\u00a0 The company forecast Q2 EPS between $0.90 to $0.92 vs analysts\u2019 expectations of $0.87. For fiscal 2022, Zoom is expecting revenue between $4.53 billion and $4.55 billion, in-line with expectations.\u00a0 The company sees full-year earnings ranging between $3.70 and $3.77 per share, better than estimates for $3.53. Oil Prices Flat Amid Recession Fears Oil prices are slightly higher amid concerns about a recession and Covid restrictions in China. West Texas Intermediate crude futures are up just 0.1% to over $110 bbl while Brent crude futures are rising 0.2% to over $113 bbl. Beijing is ramping up quarantine restrictions while Shanghai\u2019s lockdown is due to be lifted soon. Although energy traders are worried a recession in the U.S. will cause a decrease in demand, fuel demand remains high now ahead of Memorial Day weekend. Gas Prices Hit 15th Straight Record-High U.S. gas prices hit a new record high for the 15th straight day today. AAA shows the national average for regular rose to $4.598\/gal overnight.\u00a0 Diesel prices are continuing to cool, slipping to $5.549\/gal today.\u00a0 The national average for a gallon of regular has not fallen for nearly a month. The price has either risen or remained flat every single day since April 24. The average is over $4\/gal in every single U.S. state. U.S. Business Activity Expected To Slow S&P Global releases its May purchase managers index for both the services and manufacturing sectors at 9:45 a.m. ET.\u00a0 The manufacturing PMI is expected to fall to 58 this month from 59.2 in April.\u00a0 While the services PMI is expected to drop to 55.4 from 55.6.\u00a0 Any reading above 50 still signals an expansion in business activity.\u00a0 But both manufacturers and service providers have struggled in recent months with rising costs as inflation remains elevated. New Home Sales Expected To Fall The Census Bureau reports new home sales for April at 10:00 a.m. ET. That report is expected to show sales fell to a seasonally adjusted annual rate of 750,000 units last month vs 763,000 in March.\u00a0 Last week, the government reported an unexpected slowdown in housing starts in April.\u00a0 Builders say they\u2019re seeing a drop in demand as rising mortgage rates pile on top of high costs.\u00a0 In Case You Missed It The Fed\u2019s 2021 Survey of Household Economics and Decisionmaking found Americans were already worried about the economy before inflation surged<\/p>\n","protected":false},"author":41,"featured_media":61508,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[739],"tags":[],"class_list":["post-61506","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-coffee-with-greta"],"_links":{"self":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/61506","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/users\/41"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/comments?post=61506"}],"version-history":[{"count":5,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/61506\/revisions"}],"predecessor-version":[{"id":61512,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/61506\/revisions\/61512"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media\/61508"}],"wp:attachment":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media?parent=61506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/categories?post=61506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/tags?post=61506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}