Showing posts with label Retail. Show all posts
Showing posts with label Retail. Show all posts

Views +1:Full 360-Degree Preview of Amazon.com Earnings (AMZN, BBY, AAPL, NFLX)

Amazon.com Inc. (NASDAQ: AMZN) is set to report earnings after the close of trading on Tuesday.  What makes Amazon so different from many peers in technology, internet and virtual companies is that it is only recently off of its highs and not really by that much.  Even after a 2.5% drop so far on Tuesday, the $231.50 area compares to a closing price yesterday of $237.61 and to a 52-week range of $156.77 to $246.71.

Here are the targets.  Amazon.com continues to be a thorn in the side of Best Buy Co. Inc. (NYSE: BBY) for consumer electronics.  The big question is whether or not it can take away iPad sales from Apple Inc. (NASDAQ: AAPL) with the new souped up Kindle models and whether or not it can suddenly challenge NetFlix, Inc. (NASDAQ: NFLX) now that Reed Hastings seems to be messing up on every turn.

Thomson Reuters has estimates for its third quarter of $0.24 EPS and $10.93 billion in sales.  For the current fourth quarter we are already in, those estimates are $0.86 EPS and $18.05 billion in revenues. Keep in mind that the fourth quarter is “the money quarter” as it includes Christmas and the holiday season sales and the estimates compare to the readings a year ago of $0.91 EPS and $12.95 billion in sales.

What is amazing is that Amazon.com still trades at more than 100-times expected 2011 earnings.  The company has rapidly been building its cloud efforts and building its infrastructure.  This has all come at the expense of margins, and trying to factor in the new Kindle sales will be no easy task. 

If you just use the weekly options, then it looks as though options traders are braced for a move of up to about $9.50 to $11 in either direction.  If we use the monthly expiration November options, then it seems that options traders are braced for a move of $14.00 or more in either direction.

You can take a look at the chart from stockcharts.com below if you want.  The stock is looking tired, but honestly we would have said the exact same thing a month ago right before we saw a false-breakdown of the chart.  We would point that the 50-day moving average was tested and held for the most part a month ago.  That 50-day moving average is now down at $219.28 and the 200-day moving average is $197.20.

The analyst community has a consensus price target just above $243.50.  At some point, Wall Street is going to demand higher margins.  When that is can be anyone’s guess.  We stopped trying to harp on it because no one seems to care.
JON C. OGG........
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Views +1:Valuation, Timing & Margins Catch Up To Amazon.com (AMZN)

Amazon.com Inc. (NASDAQ: AMZN) has turned in earnings for its third quarter, and we will be paying extra attention to its fourth quarter.  The seller of everything online reported earnings of $0.14 EPS on sales of $10.88 billion, which compares to the Thomson Reuters targets of $0.24 EPS and $10.93 billion in sales.  Operating income was $79 million.

Amazon also guided the fourth quarter to come in at %16.45 to $18.65 billion in sales and it put the range for operating earnings at -$200 million to a profit of $250 million.  The Thomson Reuters estimates are $0.86 EPS and $18.05 billion in revenues.  As noted in the preview, the fourth quarter is Amazon’s “money quarter” as it includes Christmas and the holiday season sales.

We have been concerned each quarter about Amazon’s margins and its operating margins came in at 0.7%.  North American sales are currently about 20% larger than its international sales.  Even before the guidance, Amazon traded at more than 100-times expected 2011 earnings.   The big outlier was the new Kindle sales. 
The news may finally be catching up to Jeff Bezos and friends today.  Shares closed down 4.4% at $227.15 versus a recent all-time high of $246.71, but shares are down sharply and just under $194.00 as of about 4:17 PM EST.

We will hold off before tallying up all of the post-conference call judgment.  Bezos has had similar quarters before where the reception went from bad to good.  We do not believe that can happen forever and we believe that at some point investors will start to demand better margins and higher profits.  It is not exactly as if Amazon is an emerging online retailer....
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Views +1:FedEx Adds to Seasonal Hiring Boost (FDX, BBY, JCP) Read more: FedEx Adds to Seasonal Hiring Boost (FDX, BBY, JCP)


FedEx Corp. (NYSE: FDX) expects to handle more than 260 million packages during the coming holiday season. That’s a 12% increase from a year ago, and to cope with the flood the company plans to hire 20,000 temporary workers. That’s more than we noted from either Best Buy Co. Inc. (NYSE: BBY) or J.C. Penney Co. (NYSE: JCP) in our recent look at the retailers expected to do the most seasonal hiring this year.

That’s good news for employment, but not altogether a boost for FedEx. The company noted that most of the volume increase this year is coming from its low-profit SmartPost residential service where the US Post Office completes the package delivery. The SmartPost service includes mostly light-weight, unspecified delivery date packages from on-line sales that do not generate a lot of revenue for FedEx.

The company still expects retail sales to rise 2.5%-3% this holiday season. However, if FedEx is right about where its revenues are coming from, local retailers could be be in for a tough holiday shopping season. Large retail chains, though, could get a somewhat bigger boost from an increase in on-line sales................
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Views +1: CROCS Earnings: Now Back To Ugly Shoes (CROX) Read more: CROCS Earnings: Now Back To Ugly Shoes (CROX)


CROCS Inc. (NASDAQ: CROX) is one of the few retail apparel stocks which was up 100% from its 52-week low.  It had been a miraculous recovery stock earlier this year.  Call it the flame-out momentum apparel stock death of years past that witnessed a massive resurrection.  The emblem could have been a Phoenix rather than an alligator if you just look at the lows in January to the highs in July.
That was then, this is now…  Wall Street lives by a “what have you done for me lately and what will you do for me tomorrow” creed.  That creed is causing major pain in CROCS after the close.
The shoe (and apparel) maker reported that earnings were going to come in at $0.31 to $0.33 EPS on $273 to $275 million in sales.  The company had previously offered guidance of $0.40 EPS and $280 million in sales (by and large the consensus estimates.
CROCS went on record by saying that direct channel sales in outlets and kiosks were soft after having been strong in the spring and summer. That in turn drove down margins.
After a big move up and in the “what will you do for me tomorrow” scenario, CROCS has gone back from a hot stock trying to regain some glory to a company that makes ugly gardening and comfort shoes.
The after-hours is just as ugly as those garden shoes.  Shares are down a whopping 36% at $16.89 after closing down 1.2% at $26.64.  The 52-week trading range is $13.20 to $32.47.......
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