Tag: Financial Performance

Weekend reads: What to expect now for home prices, stocks and bonds

This week Freddie Mac said the average interest rate on a 30-year mortgage loan in the U.S. had climbed to 6.70% from 6.29% the week before and 6.02% two weeks ago. The average rate a year ago was 3.01%.

Would-be sellers who have low-rate mortgage loans are reluctant if it means they need to take out a new loan to fund their next home. Would-be buyers are forced out of the market, as the monthly principal and interest payment for a new 30-year loan, based on Freddie Mac’s figures, has increased 53% from a year ago.

Home-sale contracts are being canceled at a record pace in some areas.

But these factors could lead to a buyer’s market in 2023 if prices plunge. Here are the areas economists expect to see the largest home price declines.

The strong dollar and the stock market

Khaled Desouki/Agence France-Presse/Getty Images

The dollar has strengthened as the Federal Reserve has taken the lead among central banks in raising interest rates. This is reverberating across the world, making it more costly for countries to make interest payments on dollar-denominated debt and increasing the cost of any commodity traded in dollars.

The rising dollar lowers prices on imported goods for Americans and can also lower their international travel costs. But Michael Wilson, Morgan Stanley’s chief equity strategist, warns that earnings for the S&P 500
SPX,
-1.51%
would decline as a direct result of the strong dollar and called the current foreign-exchange backdrop an “untenable situation” for the stock market.

On the other hand: Companies are trying to blame weak earnings on the strong U.S. dollar, but that’s a lame excuse

This is what happens when bearish sentiment runs high

Michael Brush interviews David Baron, co-manager of the Baron Focused Growth Fund
BFGFX,
-0.76%,
who describes opportunities cropping up as institutional investors dump stocks. He also explains his winning long-term strategy, which has included a very long-term investment in Tesla Inc.
TSLA,
-1.10%.

A a positive sign for the stock market: These 12 stocks have seen strong insider buying

Time to buy bonds?

When interest rates rise, bond prices fall. But it also means that if you have money to put to work, bond yields have become much more attractive.

Khuram Chaudhry, a European equity quantitative strategist at JPMorgan in London, makes the case for buying bonds now.

What about preferred stocks?

Getty Images/iStockphoto

Preferred stocks feature stated dividend yields and prices that move the same way bond prices do. That means prices for many issues are now heavily discounted to face value and that current yields are much higher than they were at the end of 2021. Here’s an in-depth guide on how to research preferred stocks and make your own selections.

Related: 22 dividend stocks screened for quality and safety

The problem with macro market projections

Stanley Druckenmiller predicted a “hard landing” in 2023 for the U.S. economy while speaking at CNBC’s Delivering Alpha Investor Summit on Sept. 28.

Bloomberg

Stanley Druckenmiller predicted a U.S. recession in 2023 as a result of monetary policy tightening by the Federal Reserve. That may not be much of a stretch, considering that the U.S. economy contracted during the first half of 2022, according to revised GDP figures from the Bureau of Economic Analysis.

But investors should be careful — macro forecasts often turn out to be incorrect, Mark Hulbert warns.

More on stocks: It’s the worst September for stocks since 2008. What that means for October.

Recessions and your retirement plans

Getty Images

Alessandra Malito has advice on how retirees and people planning for retirement can prepare for tough economic times.

Also: Reset your retirement calculator now for today’s bleaker stock markets and make sure you’re still on track

Investors tremble and a central bank scrambles

The Bank of England’s headquarters.

Agence France-Presse/Getty Images

After the new U.K. government of Prime Minister Liz Truss announced a massive tax cut along with a new spending program to help counter rising fuel costs and new borrowing, the pound hit a new low against the dollar on Sept. 26 as investors and money managers panicked and sold-off U.K. government bonds. Steve Goldstein explains how and why the Bank of England came tot the rescue.

A closer look at reverse mortgages

Getty Images/iStockphoto

Beth Pinsker digs deeply to explain how to use a reverse mortgage as a financial planning tool.

Poking a little fun at Elon Musk

Getty Images

After Tesla CEO Elon Musk said the upcoming Cybertruck would be sufficiently waterproof to “serve briefly as a boat,” the San Francisco Bay Ferry offered this advice to patrons.

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September 30, 2022
Nike stock drops 10% as execs predict cheaper clothing for at least the rest of the year

Shares of Nike Inc. plunged as much as 10% after hours Thursday, after the athletic-gear giant’s executives said price-cutting efforts to flush off-season clothing from warehouses in North America would dent gross margins for the rest of its fiscal year and warned of a big potential hit from the stronger dollar.

Management also said they expected their rivals to keep cutting prices through at least the end of the calendar year, as they try to clear their own stockpiles. But the Nike executives said inventory levels in North America likely “peaked” in its first quarter, which ended on Aug. 31, and expected levels to even out — with newer, seasonally-aligned, in-demand product — in the months ahead as it prepares for the holiday rush.

“We’re taking decisive action to clear excess inventory, focusing on specific pockets of seasonally late product, predominantly in apparel,” Chief Financial Officer Matthew Friend said on Nike’s earnings call.

He added that he expected the moves to have a “transitory impact” on gross margins for the year.

The lopsided inventory levels, which grew 44% during Nike’s third quarter, followed factory closures last year in Asia, where most of its footwear is made, that led to late product deliveries, Friend said.

But those late deliveries are now getting mixed in with holiday-season deliveries that are set to arrive earlier than planned. The earlier arrivals, executives said, were a function of earlier ordering — due to the shipping delays that have characterized the past year —and then a sudden, more recent improvement in those shipping times.

And as the U.S. dollar strengthens, Friend said he expected the full-year negative impact of foreign exchange on reported sales and earnings before interest and taxes to be $4 billion and $900 million, respectively.

Still, executives said inventory management in China was “ahead of plan” as it recalibrates supply and navigates COVID-19 related restrictions there. And they said that consumer demand was still strong, despite rising prices. Friend and CEO John Donahoe both repeated that Nike remained customers’ “No. 1 cool” and “No. 1 favorite” brand.

Donahoe said shoes like the Air Max Scorpion — which offered the “most air ever, in terms of pound per square inch” — reflected Nike’s commitment to innovation. The company’s Travis Scott and LeBron 20 sneakers also remained popular, executives said. The back-to-school season, and demand for its Jordan and Converse sneakers, were also solid.

As for fiscal first-quarter financials, Nike reported net income of $1.5 billion, or 93 cents a share, compared with $1.9 billion, or $1.16 a share, in the year-earlier period. Sales came in at $12.7 billion, compared with $12.2 billion a year ago.

Analysts polled by FactSet expected earnings of 92 cents a share on sales of $12.28 billion. Shares of Nike
NKE,
-3.41%
were last down 9.3% after hours, but fell more than 10% at one point after the close.

Prior to the report, analysts following Nike had zeroed in on the impact of the stronger U.S. dollar, the impact of China’s COVID lockdowns, as well as the effects from bigger discounts to sell shoes and other gear that sat around for too long due to backups in the company’s supply chain. The back-to-school season, and competition with the likes of Adidas AG
ADDYY,
-5.21%
were also points of focus for Wall Street.

Gross margins fell to 44.3% from 46.5% during the quarter. Nike executives said the decrease “was primarily driven by North America, which took measures to liquidate excess inventory through Nike Direct markdowns and wholesale marketplace actions.”

Inventory for Nike stood at $9.7 billion, a 44% increase from the year-earlier period, due to what executives described as “ongoing supply-chain volatility, partially offset by strong consumer demand during the quarter.”

Nike, in June, said it expected “higher promotional activity” in the first quarter, as it tries to sell seasonal items that arrived late, following the factory closures last year in Asia. However, for the full year ahead, management at that time said it was planning for “mid-single-digit price increases.”

Executives also said then that they were planning to expand sales that go directly to consumers, via its own stores and online. The company over the years has been trying to rely less on retail chains like Foot Locker Inc.
FL,
-6.36%
for sales.

Shares of Nike have fallen 43% so far this year. By comparison, the S&P 500 index
SPX,
-2.11%
is down around 24% over that time.

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September 29, 2022
Micron Posts Weak Results as Memory Demand Softens

Micron Technology

shares are under renewed pressure after the memory chip company posted weak results and provided softer-than-expected financial forecasts.

The anemic quarterly results, reported after the close of trading on Thursday, were no real surprise. Micron had ratcheted down expectations amid weak demand from personal-computer manufacturers and other customers, reflecting softening consumer spending. But even with the market braced for bad numbers, the severity of the expected downturn flagged in management’s earnings guidance still managed to surprise the Street.

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September 29, 2022
H&M profit drops after Russia exit costs

Sweden’s Hennes & Mauritz AB said Thursday that net profit for its third quarter fell significantly after it booked a one-time cost related to the winding down of its Russian operations, and that it will start a cost and efficiency program.

The company
HM.B,
-3.17%
posted a net profit of 531 million Swedish kronor ($47.4 million) for the fiscal quarter ended Aug. 31, compared with SEK4.69 billion a year earlier. Analysts polled by FactSet had expected a net profit of SEK2.17 billion.

Sales were SEK57.45 billion compared with SEK55.59 billion a year earlier. Analysts polled by FactSet had expected sales of SEK57.45 billion.

The company said it has booked a one-time cost of SEK2.10 billion, related to the winding down of Russian operations, hitting the result for the quarter.

The cost and efficiency program is expected to result in annual savings of around SEK2 billion.

“The third quarter has largely been impacted by our decision to pause sales and then wind down the business in Russia. This has had a significant effect on our sales and profitability, which explains half of the decrease in profits compared with the third quarter last year,” Chief Executive Helena Helmersson said.

Write to Kyle Morris at kyle.morris@dowjones.com

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September 29, 2022
U.S. Polo Assn. Delivers Record Results, Reaching Nearly $2 Billion in Retail Sales

Global Brand’s Footprint Expands to 1,200 Retail Stores and Sales Across 190 Countries

WEST PALM BEACH, Fla., June 29, 2022 (Newswire.com)
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USPA Global Licensing Inc. (USPAGL) has announced that U.S. Polo Assn., the official brand of the United States Polo Association, delivered a record year on all fronts for 2021 with aggressive expansion planned for 2022 and beyond. U.S. Polo Assn. reached $1.8 billion in global retail sales in 2021. The global, sport-inspired brand’s footprint also expanded into 190 countries and approximately 1,200 retail stores globally as U.S. Polo Assn. continues to climb the ranks as one of the largest global licensed brands in the world.

USPAGL, the company that manages and oversees the U.S. Polo Assn. brand, was able to build on the strategies it has implemented throughout the pandemic to generate record growth for U.S. Polo Assn. in online shopping with 40 some brand sites in 18 languages. Fast-tracking digital resulted in the doubling of sales online in several regions. U.S. Polo Assn. continues to build global momentum on social media, exceeding 7 million followers worldwide.

“Our global team and strategic partners around the world have worked hard through the most challenging of times to deliver a record financial performance while also achieving several major milestones in 2021,” notes J. Michael Prince, President & CEO of USPAGL. “We continue to execute on our aggressive digital strategy and our international growth strategy to continue expanding our global retail fleet of U.S. Polo Assn. stores in key cities and markets worldwide.”

U.S. Polo Assn.’s ambitious growth has come as the result of expanding its already sizeable footprint in emerging markets, such as India, China, and the Middle East, while continuing to gain market share with strong partnerships in more mature regions such as North America, Western Europe, and Latin America.

“One of the key drivers to U.S. Polo Assn.’s growth has been its aggressive worldwide expansion of branded retail stores in an environment where many other brands have closed doors,” added Prince.

Some highlights of the worldwide U.S. Polo Assn. store expansion being the remodel of the brand’s global flagship locations in both New York’s Times Square and the five-story location on Istiklal Street in Istanbul, Turkey, and new store openings in strategic worldwide locations such as the Express Avenue Mall in Chennai, India, the Cheshire Oaks Designer Outlets in the United Kingdom, and the Morumbi Mall in São Paulo, Brazil.

In late 2021, U.S. Polo Assn. was awarded the prestigious Retail and Leisure International (RLI) Global Retailer of the Year Award, as well as a place in Digital Commerce 360, the industry’s trade bible, which recently included U.S. Polo Assn.’s e-commerce business as a TOP 500 Retailer for the first time ever.

In early 2022, U.S. Polo Assn. officially announced USPA Life, featuring the evolution of the U.S. Polo Assn. brand using eco-processes and green innovations for specific products, while providing the brand’s global licensees with the messaging and materials needed to be consistent and successful in the long-term sustainability initiatives. A partnership with 4ocean was also announced, with the goal to pull 60,000 pounds of trash from the world’s oceans throughout the coming year. At this stage, U.S. Polo Assn. has met the halfway goal of 30,000 pounds pulled from global waterways.

True to the heritage of the brand, U.S. Polo Assn. maintains a strong foothold in the sport of polo by signing a landmark global deal with ESPN, bringing multiple championship games to millions of viewers worldwide.

The United States Polo Association (USPA) and U.S. Polo Assn. were instrumental in bringing the XII FIP World Polo Championship to Palm Beach County, and back to the United States for 2022, for only the second time in the tournament’s history. The Federation of International Polo (FIP) is the international federation representing the sport of polo, officially recognized by the International Olympic Committee (IOC).

Despite another challenging year for global retail, U.S. Polo Assn. has maintained its leadership position.

“We continue to look for avenues and partnerships to expand into new global markets. We are also working on some projects that will bring awareness into new areas of our business. I’m optimistic about the U.S. Polo Assn. business with our goal to grow by more than 100 stores annually, and double revenue in the coming years,” concludes Prince.

About U.S. Polo Assn. and USPA Global Licensing Inc. (USPAGL)

U.S. Polo Assn. is the official brand of the United States Polo Association (USPA), the nonprofit governing body for the sport of polo in the United States and one of the oldest sports governing bodies, having been founded in 1890. With a multi-billion-dollar global footprint and worldwide distribution through some 1,200 U.S. Polo Assn. retail stores and thousands of department stores as well as sporting goods channels, independent retailers and e-commerce, U.S. Polo Assn. offers apparel for men, women, and children, as well as accessories and footwear in 190 countries worldwide. Ranked the fifth largest sports licensor in License Global magazine’s 2020 list of “Top 150 Global Licensors,” U.S. Polo Assn. is named alongside such iconic sports brands as the National Football League, the National Basketball Association and Major League Baseball. Visit uspoloassnglobal.com.

USPA Global Licensing Inc. (USPAGL) is the for-profit subsidiary of the USPA and its exclusive worldwide licensor. USPAGL manages the global, multi-billion-dollar U.S. Polo Assn. brand and is the steward of the USPA’s intellectual properties, providing the sport with a long-term source of revenue. Through its subsidiary, Global Polo Entertainment (GPE), USPAGL also manages Global Polo TV, the world’s leading digital platform with polo and lifestyle content. In addition, USPAGL partners with ESPN and beIN Sports globally to share the sport of polo broadcasts on television and on-demand to millions of viewers around the world. For more polo content visit globalpolo.com.

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For Additional Information, Contact:

Stacey Kovalsky – Senior Director, Global Communications

Phone +001.561.790.8036 – Email: skovalsky@uspagl.com

Kaela Drake – PR & Communications Coordinator

Phone +001.561.461.8596 – Email: kdrake@uspagl.com

Source: USPA Global Licensing Inc.

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June 29, 2022
New DDI Study Reveals Minority Leaders Getting More Promotions, But More Likely to Switch Companies to Advance
Part of the Global Leadership Forecast series, DDI’s new Diversity and Inclusion Report 2020 shows strong benefits of corporate inclusion efforts, as well as retention risks for minority leaders

Press Release
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updated: Oct 28, 2020
PITTSBURGH, October 28, 2020 (Newswire.com)
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Senior minority executives plan to leave their current position at twice the normal rate of other executives. And this exodus could be coming within the next year, according to DDI’s Diversity and Inclusion Report 2020.

This is just one finding from the report, which is part of the Global Leadership Forecast series by DDI. The report includes data from 15,787 leaders and 2,102 human resources professionals. These leaders represent more than 1,740 organizations across more than 25 industries globally. The report delivers data on gender and racial/ethnic diversity among leaders, and its effect on companies’ financial results. Companies can use the data to help guide their diversity and inclusion efforts, as well as their talent strategy.

“While leaders from diverse ethnic and racial backgrounds are finally advancing at a faster rate, our study showed that organizations face high retention risks for these leaders,” said Stephanie Neal, director of DDI’s Center for Analytics and Behavioral Research. “It’s likely that these leaders still face significant barriers as they move up the ladder, which may be why they feel like they have to leave the company to advance. Companies should be paying close attention to how inclusive their culture and talent practices are to ensure they retain these diverse and highly talented leaders.”

The study found that fewer than one in four leaders reported their organization consistently recruits and promotes from a diverse talent pool. Furthermore, only 27 percent of leaders believe inclusion is a strong part of their organizations’ culture and values.

The Diversity and Inclusion Report 2020 found that while organizations are working to build more diverse and inclusive workforces, there are still gaps that need to be addressed. The study also found:
- Diversity has a greater impact on financial performance than any other organizational demographic factor. Organizations with above-average gender, racial and ethnic diversity had at least 30 percent of women and 20 percent of leaders from diverse racial and ethnic backgrounds in leadership roles. These organizations were eight times more likely to be in the top 10 percent of organizations for financial performance.
- Leaders from minority backgrounds are more likely to feel the need to change companies to progress their career across all leadership levels. Also, they were much more likely to say they plan to leave within the next year. This is especially true among senior-level minority leaders, who are more than twice as likely to leave as their non-minority peers.
- Diversity and inclusion efforts resonate across organizations’ entire workforce. More than one-third of leaders from companies that qualify as “Best Places to Work” reported that inclusion is a strong component of their work culture and value. This is in comparison to the 20 percent of leaders from other companies without the same label.
- Organizations with more diversity in high-potential pools typically see higher financial performance. Organizations in the top 10 percent of financial performance report that women make up 24 percent of their high-potential pool, and 19 percent are from diverse racial and ethnic backgrounds. Organizations with below average financial performance report less diversity in their high-potential pools. Their pools include only 16 percent women and 12 percent from diverse racial and ethnic backgrounds.
- Women continue to struggle to advance. At higher levels of leadership, women indicated an increasing need to switch companies to climb higher in their roles. In fact, 45 percent of women executives said they would likely need to switch companies to advance, compared to only 32 percent of male executives.
“There’s a clear bottom-line benefit to workplace diversity and inclusion, and organizations can only benefit from increasing these efforts,” Neal said. “It’s important that leaders take the time to assess the state of diversity and inclusion in their organization and employ best practices if they want to realize the benefits of a diverse and inclusive workforce.”

For more information, including the full report, visit ddiworld.com/research/inclusion-report.

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About DDI

DDI is a global leadership consulting firm that helps organizations hire, promote and develop exceptional leaders. From first-time managers to C-suite executives, DDI is by leaders’ sides, supporting them in every critical moment of leadership. Built on five decades of research and experience in the science of leadership, DDI’s evidence-based assessment and development solutions enable millions of leaders around the world to succeed, propelling their organizations to new heights. For more information, visit ddiworld.com.

Available for Interviews

Stephanie Neal, director of DDI’s Center for Analytics and Behavioral Research

Contact:
Brad Pedersen
PR Specialist, DDI
Brad.Pedersen@ddiworld.com
412-485-9767

Source: DDI
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October 28, 2020