Tag: Sales Figures

Macy’s says its holiday sales will be lower, citing inflation pressures | CNN Business

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New York
CNN
—

Turns out inflation may have put a damper on the holidays.

Macy’s chair and CEO Jeff Gennette said lulls during the non-peak holiday weeks “were deeper than anticipated” and that consumers will continue to feel pressured into 2023, in a Q4 update Friday.

Macy’s said Friday its net sales from the holiday quarter will likely be at the low-end to mid-point of its previously issued range of $8.16 billion to $8.4 billion. The retailer said its adjusted diluted earnings per share are expected to be between $1.47 to $1.67.

In last year’s fourth quarter results, Macy’s earned $8.67 billion, above analysts’ forecasts, and had an adjusted earnings per share of $2.45.

Total end-of-quarter inventories are on track to fall slightly below last year and down mid-teens relative to 2019.

Gennette said its Black Friday and Cyber Monday sales met expectations and the week leading up to and following Christmas beat them.

“Overall, our occasion apparel and gift-giving business were strengths, and inventory composition and price points aligned with customers’ needs,” Gennette said, noting that its high-end Bloomingdale’s stores and cosmetics line Bluemercury continued to outperform forecasts.

Macy’s warning may provide an early clue to investors wondering if high inflation has hampered shopping demand during the holidays.

Americans spent more this season to keep up with high prices. US retail sales increased 7.6% during the period between November 1 to December 24 compared to the same time last year, according to the Mastercard Spending Pulse. US retail sales were lower than expected in November, falling 0.6% during the month, which was the weakest performance in nearly a year.

Gennette warned that consumer sentiment is unlikely to change with the new year.

“Based on current macro-economic indicators and our proprietary credit card data, we believe the consumer will continue to be pressured in 2023, particularly in the first half, and have planned inventory mix and depth of initial buys accordingly,” the Macy’s CEO said.

The company expects to report full results for the fourth quarter and fiscal year 2022 in early March 2023.

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January 7, 2023
Macy’s stock slides as holiday lulls weigh on sales forecast and execs predict difficulties into 2023

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Shares of department-store chain Macy’s Inc. slid 8% in after-hours trading on Friday after the retailer gave a more downbeat forecast on its fourth-quarter sales, with management citing big “lulls” in the holiday-shopping season and saying customers would likely feel the squeeze from inflation into next year.

Executives said they expected those sales to land in the “low-end to mid-point” of prior expectations for between $8.161 billion to $8.401 billion. They said they expected adjusted earnings per share to be within its previously forecast range of $1.47 to $1.67.

“Black Friday/Cyber Monday sales were in line with our expectations, while the week leading up to and following Christmas were ahead,” Macy’s
M,
+2.64%
Chief Executive Jeff Gennette said in a statement. “However, the lulls of the non-peak holiday weeks were deeper than anticipated.”

“Based on current macro-economic indicators and our proprietary credit card data,” he continued, “we believe the consumer will continue to be pressured in 2023, particularly in the first half, and have planned inventory mix and depth of initial buys accordingly.”

Macy’s issued the sales and profit figures as Wall Street parses consumer behavior during the holiday season. Adobe on Thursday said online sales surpassed $210 billion and beat expectations. Costco Wholesale Corp., a day earlier, reported an increase in December sales, even though online sales fell.

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January 6, 2023
Costco stock rises as holiday sales gain even as online sales recede

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Costco Wholesale Corp. shares ticked higher in the extended session Thursday after the warehouse club reported a rise in holiday sales from a year ago, even as online sales pulled back.

Costco
COST,
-1.40%
said December sales rose 7% to $23.8 billion, up from $22.24 billion a year ago.

For the 18 weeks ending Jan. 1, sales rose 7.6% to $81.16 billion, up from $76.34 billion in the year-ago period.

While same-store sales grew for each period, e-commerce sales declined. Total company same-store sales rose 5.5% for the month and 6.1% for the 18 weeks ending Jan. 1., while e-commerce sales declined 6.4% and 4.8%, respectively.

Costco shares rose more than 2% after hours, following a 1.4% decline to close the regular session at $450.19.

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January 5, 2023
Justice Department sues pharmaceutical company for allegedly failing to report suspicious opioid sales | CNN Politics

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Washington
CNN
—

The Justice Department on Thursday alleged that the AmerisourceBergen Corporation, one of the country’s largest pharmaceutical distributors, and two of its subsidiaries failed to report hundreds of thousands of suspicious prescription opioid orders to pharmacies across the country.

The lawsuit, which spans several states, alleges that AmerisourceBergen disregarded its legal obligation to report orders of controlled substances to the Drug Enforcement Agency for nearly a decade. The company ignored “red flags” that pharmacies in West Virginia, New Jersey, Colorado and Florida were diverting opioids into illegal drug markets, the suit says.

“The Department of Justice is committed to holding accountable those who fueled the opioid crisis by flouting the law,” Associate Attorney General Vanita Gupta said in a statement Thursday.

“Companies distributing opioids are required to report suspicious orders to federal law enforcement. Our complaint alleges that AmerisourceBergen – which sold billions of units of prescription opioids over the past decade – repeatedly failed to comply with that requirement,” she added.

If AmerisourceBergen is found liable at trial, the company faces billions of dollars in financial penalties, the Justice Department said.

Lauren Esposito, a spokesperson for AmerisourceBergen, countered on Thursday in a statement that said the Justice Department’s complaint rested on “five pharmacies that were cherry picked out of the tens of thousands of pharmacies that use AmerisourceBergen as their wholesale distributor, while ignoring the absence of action from former administrators at the Drug Enforcement Administration – the DOJ’s own agency.”

She added: “With the vast quantity of information that AmerisourceBergen shared directly with the DEA with regards to these five pharmacies, the DEA still did not feel the need to take swift action itself – in fact, AmerisourceBergen terminated relationships with four of them before DEA ever took any enforcement action while two of the five pharmacies maintain their DEA controlled substance registration to this day.”

Yet AmerisourceBergen was allegedly aware that in two of the pharmacies, drugs it distributed were likely being sold in parking lots for cash, the Justice Department said. In another pharmacy, the company was allegedly warned that patients likely suffering from addiction were receiving opioids, including some people who later died of a drug overdose.

The Justice Department also noted in its lawsuit that AmerisourceBergen’s reporting systems for suspicious opioid orders were deeply inadequate, and that the company intentionally changed its reporting systems to reduce the number of orders flagged as suspicious amid the opioid epidemic.

Even when orders were flagged as suspicious, AmerisourceBergen often didn’t report those orders to the DEA, according to the complaint.

Opioids are involved in the vast majority of drug overdose deaths, though synthetic opioids – particularly fentanyl – have played an outsized role. Synthetic opioids – excluding methadone – were involved in more than 72,000 overdose deaths in 2021, about two-thirds of all overdose deaths that year and more than triple the number from five years earlier.

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December 30, 2022
U.S. pending home sales fall 4% in November to the lowest level since April 2020

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The numbers: U.S. pending-home sales fell 4% in November, which is the sixth straight monthly drop, according to the index released Wednesday by the National Association of Realtors (NAR).

The index was last at this level in the midst of the pandemic lockdown, in April 2020.

Analysts polled by the Wall Street Journal had forecast the pending home sales index to drop by 1.8%.

Contract signings fell in all regions across the country.

Pending home sales reflect transactions where the contract has been signed for an existing-home sale, but the sale has not yet closed.

Economists view it as an indicator for the direction of existing-home sales in subsequent months.

Key details: Compared with a year earlier, transactions were down by 37.8%.

On a monthly basis, pending sales fell in all four major U.S. regions, led by the Northeast, where the index fell by 7.9%, followed by the Midwest, the South and the West.

But pending home sales fell the most since last November in the West, by 45.7%.

Pending home sales have fallen in all but one month in 2022.

Big picture: The housing market continues to stumble through 2022, as elevated mortgage rates keep buyers out of the market.

Buyers are finding it hard to find an existing home for sale, as sellers hold on to their homes tied to ultra-low mortgage rates.

November’s data is also tied to the period of time when mortgage rates were above 7%.

What the realtors said: “With mortgage rates falling throughout December, home-buying activity should inevitably rebound in the coming months and help economic growth,” NAR Chief Economist Lawrence Yun said.

What they’re saying: “Housing markets have entered a winter freeze,” George Ratiu, senior economist at Realtor.com, said in a statement.

“With prices for existing homes still elevated … and mortgage rates above 6%, homebuyers are finding much of today’s real estate landscape inaccessible,” he added.

Ratiu estimated that monthly mortgage payment for a median-priced home has gone up by $780 since last year.

Market reaction: The Dow Jones Industrial Average
DJIA,
-1.10%
and the S&P 500
SPX,
-1.20%
were mixed in early trading on Wednesday. The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.872%
rose above 3.8%.

(Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.)

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December 28, 2022
5 things not to buy in 2023

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It’s been a year of contradictions.

The recession drum beats on, interest rates are rising, and the stock market has taken a tumble, and yet retail sales have risen 6.5% in the last 12 months, trailing a 7.1% increase in the cost of living.

There are other reasons people should consider cutting back on spending in 2023. The personal saving rate — meaning personal saving as a percentage of disposable income, or the share of income left after paying taxes and spending money — hit 2.4% in the third quarter from 3.4% in the prior quarter, the Bureau of Economic Analysis said.

“There are signs that people are pulling back on certain expenditures. ”

That is the lowest level since the Great Recession and the eighth-lowest quarterly rate on record (since 1947). Adjusted for inflation, savings are down 88% from their 2020 peak and 61% lower than before the pandemic, according to government data. The personal saving rate hit 2.4% in November vs. 2.2% in October.

Are people buying stocks during a bearish market, and/or have they run out of their pandemic-era savings? Whatever the reasons, more judicious investing and spending decisions seem to be the most prudent approach — especially given the uncertain economic outlook for 2023.

There are signs that people are already pulling back on certain expenditures. Although retail sales are up on the year, they did decline 0.6% month-on-month in November to mark their biggest decline in almost a year, largely because of weak car sales.

About those new cars: New-vehicle total sales for 2022 are projected to reach 13,687,000 units, down 8.4% on the year, according to a joint forecast from J.D. Power and LMC Automotive. MarketWatch reporter Philip van Doorn explains all the reasons why you may wish to skip buying a new car in 2023, in addition to their rising prices.

So what else should you save your money on in 2023? MarketWatch writers give their verdict below.

SPACs

During the pandemic, people loved to buy special purpose acquisitions companies, known as SPACs. In 2021, 613 SPACs listed on U.S. stock exchanges through initial public offerings, according to SPAC Insider. The year before, there were 248 SPAC IPOs. There had never been more than 100 of these before in a single year. There were SPACs associated with Donald Trump and Serena Williams. There were so many, that one was called Just Another Acquisition Corp.

SPACs exist as a means to take private companies public, and theoretically give these shell companies a faster and less regulatory burdensome means to access public capital. The U.S. Securities and Exchange Commission warned investors last April that so-called advantages of the SPAC process, such as reduced legal liability, may not prove to be so solid if tested in court.

The SPACs raised money even though they had no commercial operations or business, and tried to use the cash to buy something that did exist. But investors who bought SPACs that merged with private companies since 2015 have suffered losses of 37%, on average, a year after the merger, according to a recent study. The SPAC and New Issue ETF
SPCX,
+0.37%
has slipped 12% this year. The frenzy for SPACs has predictably gone bust. But if you see one, just stay away from it.

— Nathan Vardi

Crypto

There are two main reasons not to invest in cryptocurrency in 2023, and neither has to do with the precipitous drop in value for most of the major coins in the last year, including but not limited to bitcoin
BTCUSD,
-1.11%,
ethereum
ETHE,
-2.71%
and tether
USDTUSD,
-0.02%.
Investors have long been conditioned to buy the dip and find value where others fear to tread, and then make money on the upswing.

Crypto is different because there’s no correlation to long-held market theories, and buying it amounts more to speculation than to investing. That might seem semantic, but if you look at financial planning holistically, then you treat investing as an exercise in risk tolerance — and crypto is all risk.

Which leads to the other main reason to avoid crypto in the next year: If you do buy it, there’s really no safe way to store it. There’s no federal insurance covering exchange failures and little cyber-theft protection for individuals. That leaves you on your own, which is not a good place to be with your money.

— Beth Pinsker

Meta Quest headsets

On the consumer front, if you’re really into virtual reality, there is nothing wrong with jumping on the new Meta Quest two and Meta Quest Pro headsets that were introduced in 2022 by Meta Platforms Inc.
META,
-0.78%.

The problem is that you might feel like you bought a BlackBerry
BB,
-3.42%
phone in early 2007. Apple Inc.
AAPL,
-1.40%
is expected to finally show off what engineers at the Silicon Valley giant have been cooking up in a years-long project to jump into augmented and virtual reality, and consumers are expected to at least get a glimpse at Apple’s attempt this year, if not a chance to buy whatever the company produces.

The headsets don’t come cheap: Meta said earlier this year it was raising the price of Meta Quest 2 headsets by $100 to $399.99 (128GB) and $499.99 (256GB). The iPhone’s introduction 15 years ago changed the way people look at smartphones, and Apple’s expected jump into this field in 2023 could leave anyone who spent their money on a Meta Quest headset wishing for a new reality.

— Jeremy Owens

Meme stocks

Struggling companies with business models that appear to some to be dying and/or struggling do not generally perform well in the stock market. But during the pandemic these companies often had stocks that soared. What drove them was social media sentiment, driven on platforms like Reddit, by a swarm of retail investors.

There was video game retailer GameStop
GME,
-7.42%,
movie theater chain AMC
AMC,
-8.43%,
and smartphone dinosaur Blackberry. AMC recently announced the sale of another $110 million in stock, adding to a total that has already exceeded $2 billion since the theater chain got swept up into meme-stock madness. CEO Adam Aron wrote on Twitter that the move put the company “in a much stronger cash position.”

GameStop recently reported its seventh consecutive quarterly loss and reiterated its goal of returning to profitability in the near term, but analysts have signaled that many challenges lie ahead. During the company’s recent third-quarter conference call, Chief Executive Officer Matt Furlong said that GameStop would be open to exploring acquisitions of a strategic asset or complimentary business if they were available “in the right price range.”

Buying meme companies like this worked for some in a booming stock market fueled by ultra-low interest rates. But we are now in a bear market with interest rates that are elevated. Corporate fundamentals are back in vogue. So are quaint investment ideas like cashflow. More likely than not, the days of buying meme stocks are over.

— Nathan Vardi

Tesla cars

In recent years, Tesla Inc.
TSLA,
-8.25%
has stood alone as the best option for electric vehicles, while other manufacturers struggled to get production running. But in 2023, there should be many more types of electric cars available, at prices that are expected to trend downward as the year goes along. Teslas range in price from $46,990 for the Tesla Model 3 to $138,880 for the Tesla Model X Plaid.

With major manufacturers such as General Motors Co.
GM,
-0.73%,
Ford Motor Co.
FORD,
-2.68%,
Toyota Corp. and Volkswagen
VOW,
-0.77%
VLKAF,
-1.15%
jumping into the fray, and young Tesla wannabes like Rivian Automotive Inc.
RIVN,
-7.11%,
Lucid Group Inc.
LCID,
-7.24%
and FIsker Inc.
FSR,
-6.19%
expected to start producing cars, consumers will have many more options for EVs.

Meanwhile, Tesla has done little to update the Model 3 since it was introduced in 2017, and has increased prices at a level that Chief Executive Elon Musk has admitted is “embarrassing” for a company that claimed to have a goal of mass-market pricing for EVs.

The average price of a new EV is $64,249, while a new gas car is $48,281, according to Liz Najman, a climate scientist and communications and research manager at Recurrent Auto, an EV research and analytics firm focused on the used-vehicle market. After years of not having much choice beyond Tesla for EVs, 2023 appears to be the year that changes.

— Jeremy Owens

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December 27, 2022
Cheap? Maybe. But These Stocks Have Been Dead Money for Decades

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Cheesecake Factory appears to be “running the same play,” wrote J.P. Morgan analyst John Ivankoe in a recent restaurant industry outlook. I don’t think he meant it as a compliment—the stock, he noted, trades where it did in 2004, adjusted for splits.

Why the long stall-out? My first thought was that maybe hitting the mall for a hypercaloric sit-down meal off a menu the size of a Gutenberg Bible has fallen out of favor over the years. But no: Sales have bounced back and then some from the Covid pandemic, with plenty of takeout business and dessert orders. The average

Cheesecake Factory

(ticker: CAKE) restaurant does more than $10 million in yearly sales, or twice as much as an Olive Garden.

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December 23, 2022
U.S. new home sales rose in November by 5.8%

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The numbers: U.S. new home sales rose 5.8% to a seasonally-adjusted rate of 640,000 in November, from a revised 605,000 in the prior month, the Commerce Department reported Friday.

The November sales figure beat analyst estimates. Analysts polled by the Wall Street Journal had forecast new home sales to come in at 600,000 in November.

The sales of new homes are below a peak of 1.04 million in August 2020.

Year-over-year, new home sales are still down by 15.3%.

New home sales rose a revised 8.2% to 605,000 in October, compared with the initial estimate of a 7.5% increase to 632,000.

The new home sales data are volatile month-on-month and are often revised.

Key details: The median sales price of a new home sold in November was $471,200, down from $484,700 in October.

The supply of new homes for sale fell by 7.5% between October and November, equating to an 8.6-month supply.

Regionally, the West led the U.S. in the number of new homes sold, with new homes sold surging by 27.6%, followed by the Midwest.

Sales of new homes dropped in the Northeast and the South this November.

Big picture: 7% mortgage rates didn’t put a damper on new home sales, as seen in today’s report.

New home sales jumped in November, likely as buyers wanted to take advantage of incentives that builders are offering, from mortgage rate buydowns to price cuts.

Builders have been gloomy almost all year, fretting about lower traffic.

But with rates coming back down since, expect housing data to improve further.

What are they saying? “I suspect that builders are much more motivated sellers (especially given the surge in financing costs) than current homeowners, who do not want to part with their 3% or lower mortgages,” Stephen Stanley, chief economist at Amherst Pierpont, wrote in a note. “This may explain why new home sales are rising while existing home sales plunge. ”

But overall, sales are still weaker than usual: Stanley noted that combined existing and new home sales in November fell to the lowest level since 2011.

Market reaction: The Dow Jones Industrial Average
DJIA,
+0.53%
and the S&P 500
SPX,
+0.59%
were down in early trading on Friday. The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.749%
rose above 3.7%.

Shares of builders, including D.R. Horton, Inc.
DHI,
-1.29%,
Lennar Corp
LEN,
-0.46%,
PulteGroup Inc.
PHM,
-0.52%,
and Toll Brothers Inc.
TOL,
-0.33%
traded lower during morning trading.

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December 23, 2022
Micron sales could dive more than 50%, and more belt-tightening is expected before outlook improves

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Micron Technology Inc.’s revenue declines could worsen to more than 50% before inventory-saturated customers work though that product and boost sales in the second half of 2023, but before then the memory-chip maker is implementing some austerity measures.

Micron
MU,
+1.01%
said it expects an adjusted loss of between 72 cents and 52 cents a share on revenue of $3.6 billion to $4 billion for the fiscal second quarter, with the midpoint 51% lower than last year’s second-quarter revenue total of $7.78 billion. Analysts had forecast an adjusted loss of 32 cents a share on revenue of $3.92 billion.

In a filing with the Securities and Exchange Commission, the memory-chip specialist disclosed that management plans to cut about 10% of its staff in 2023, “through a combination of voluntary attrition and personnel reductions.” About $30 million in restructuring costs are expected, all in the fiscal second quarter.

Along with headcount reductions, Micron said in 2023 it will also suspend share buybacks, productivity programs and company bonuses, and that executive salaries would be “cured” for the rest of the fiscal year. Sanjay Mehrotra, Micron’s chief executive, also told analysts after the release of results that he expected profitability to remain challenged through 2023.

Micron specializes in DRAM, or dynamic random access memory, the type of memory commonly used in PCs and servers, and NAND chips, which are the flash memory chips used in smaller devices like smartphones and USB drives.

Micron shares were down less than 1% after hours, following a 1% rise to close the regular session at $51.19. Micron shares are down 45% for the year compared with a 19% fall by the S&P 500 index
SPX,
+1.49%
and a 32% drop by the Nasdaq Composite Index
COMP,
+1.54%
and a 33% drop on the PHLX Semiconductor Index
SOX,
+2.36%.

Mehrotra said he expects DRAM growth to rise by about 10% and NAND to rise by around 20%. “For both years, demand in DRAM and NAND is well below historical trends and future expectations of growth largely due to reductions in the end demand in most markets, high inventories at customers, the impact of the macroeconomic environment and the regional factors in Europe and China,” Mehrotra said.

“But the largest impact to the profitability and financial outlook for us is the supply-demand balance, and the rate and pace of this improvement is going to be a function of aligning supply with demand, and we’re taking decisive actions on CapEx and utilization to address it,” Mark Murphy, Micron’s chief financial officer, told analysts on the call.

Data-center and cloud sales were considered relatively safe, but in another potentially developing crack, Mehrotra said the current environment showed some softness in cloud data-center demand, given tighter consumer spending.

“We do absolutely expect that once we get past the current macroeconomic environment and macroeconomic weakening, longer-term trends for cloud will remain strong,” Mehrotra said. “In terms of the current environment, yes, inventory adjustments and some impact of cloud and demand weakening as well. That’s impacting our overall data-center outlook.”

The CEO also told analysts he expects customers to be in a much better position in the burning off of their inventories by the middle of 2023.

“By mid-calendar ’23, we are projecting, even though we don’t have perfect visibility, but based on all of our discussions with our customers, we are projecting that inventory at customers will be in relatively healthier position by that time.”

“And that’s where we say that our second half of fiscal-year revenue will be greater than first half, and we would expect continued improvements beyond the second half as well,” the CEO said.

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December 21, 2022
FedEx’s package volumes keep falling, but it’s still getting more money out of each delivery

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FedEx Corp. on Tuesday said it planned to slash an extra $1 billion in costs beyond what it outlined in September, amid what management called a “weaker demand environment” that led to softer-than-expected sales for its second quarter.

Still, shares rallied after hours, as investors and analysts focused on the parcel-delivery service’s profit forecast. And the company still managed to squeeze more consumer dollars out of each delivery as package volumes slipped — helped by the surcharges that carriers tack on to bills to offset rising fuel costs.

The company reported earnings as investors looked for clues about holiday spending in an economy where just about everything is more expensive, and as FedEx
FDX,
-2.62%
prepares to raise shipping prices next month.

During FedEx’s conference call to discuss its results, executives described an environment where global demand fell further in the second quarter than it did during a particularly harsh first quarter that sank its stock. While they said package volumes, comparatively, would improve later on in the fiscal year, they said they hadn’t seen much of a change in business yet in China, even as the economy there reopens after pandemic-related lockdowns.

Meanwhile, they said the U.S. was still recalibrating after consumers loaded up on electronics, furniture and other goods bought online during the pandemic.

“I think the main macro issue in the United States is really the e-commerce reset,” Chief Executive Raj Subramaniam said during the call.

The extra billion in savings brings FedEx’s total expected cuts to roughly $3.7 billion for the fiscal year, which ends in May. In September, the company announced up to $2.7 billion in cost cuts for the fiscal year ahead as concerns grew about stalled shipping demand in an inflation-scarred economy.

FedEx also lowered its fiscal 2023 capital spending forecast by $400 million and unveiled a new long-term cost-saving program, called DRIVE, which it hopes will bring more than $4 billion in annualized structural cost savings by fiscal 2025. The company said more details on DRIVE would come during a conference call in the first half of the next calendar year.

Subramaniam said some of FedEx’s cuts would come from digitization and automation in the U.S. and Europe, and other technology that helps trucks deliver more packages per trailer. FedEx has already grounded jets and reduced flights in its large, internationally-focused Express segment, which offers expedited air and ground deliveries. Cuts elsewhere will come from halting Sunday operations in its ground service, where trucks ship goods in the U.S. and Canada, and closing locations that offer copying and printing services, FedEx said in September.

Subramaniam on Tuesday also said that service issues that hurt the company’s results in the prior quarter had improved, and that hangups at Charles De Gaulle airport in Paris had been “largely alleviated.”

For the full year, FedEx forecast earnings per share of $13 to $14. For the full fiscal year, FactSet forecast adjusted earnings of $13.93 a share, with revenue of $94.358 billion.

“While modestly below consensus at the mid-point . . . our sense is that this is in line with (or maybe a bit better than) buyside expectations,” Stephens analyst Jack Atkins said in a note Tuesday, adding that the outlook included the $3.7 million in reductions.

“Net, with most investors sitting this quarter out and the company issuing an outlook that was likely better than some feared, we think the stock reacts positively to these results tomorrow,” he continued.

Shares rose 4.8% in after-hours trade.

FedEx reported fiscal second-quarter net income of $788 million, or $3.07 a share, compared with $1 billion, or $3.88 a share, in the same quarter last year. Revenue slipped to $22.8 billion, compared with $23.5 billion in the prior-year quarter.

Adjusted for costs related to “business optimization,” FedEx earned $3.18 a share, compared with $4.83 the same quarter in 2021.

Analysts polled by FactSet expected FedEx to report adjusted earnings of $2.81 a share on sales of $23.7 billion.

“The FedEx team moved with urgency to make rapid progress on our ongoing transformation while navigating a weaker demand environment,” Subramaniam said in FedEx’s earnings release. “Our earnings exceeded our expectations in the second quarter, driven by the execution and acceleration of our aggressive cost-reduction plans.”

Management said that its Express segment suffered a 64% decline in operating income, as global package volumes fell. But yields — or sales per package, and a measure of how high a price FedEx can charge — rose 8%. Higher fuel surcharges helped that yield figure.

The company’s Ground division, where trucks ship packages in the U.S. and Canada, got a 24% boost in operating income. Cost cuts and a 13% increase in yields helped there, even as package also volumes slipped.

FedEx stock has fallen 35% this year. By comparison, the S&P 500 Index
SPX,
+0.10%
is down around 19%.

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December 20, 2022
Nike stock jumps more than 10% as earnings, sales destroy expectations

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Nike Inc.’s stock spiked more than 13% in extended trading Tuesday after the sporting-goods retailer reported early holiday earnings and sales are tracking solidly higher than Wall Street expected, though inventories remain high and a forecast could still loom.

Nike
NKE,
+0.16%
reported fiscal second-quarter net earnings of $1.33 billion, or 85 cents a share, compared with net earnings of 83 cents a share in the year-ago quarter. Revenue was $13.32 billion, up 17% from $11.36 billion a year ago for the sneaker maker in the quarter, which ended Nov. 30.

Analysts surveyed by FactSet had expected on average net earnings of 64 cents a share on revenue of $12.58 billion.

Nike executives did not provide a third-quarter forecast in their announcement, though Chief Financial Officer Matthew Friend said in a conference call he expects annual revenue grow in the the “low teens.” In an earlier statement, Chief Executive John Donahoe said the results “give us confidence in delivering the year as our competitive advantages continue to fuel our momentum,” while Friend added, “We are on track to deliver on our operational and financial goals.”

In a conference call late Tuesday, Donahoe noted a rebound of business in China and improving inventory levels because of strong consumer demand.

Nike announced the results amid a daunting confluence of slackening consumer spending, foreign-exchange headwinds and an elevated promotional environment, Jefferies says in a research note. In September, Nike shares tumbled after executives said markdowns on the retailer’s products would squeeze margins, and they expected clothing competitors to keep slicing prices through at least the end of the year.

Read more: Inventory concerns are pounding Nike’s stock

With consumers buying fewer clothes, Nike and other retailers have shouldered swelling inventories, though executives at Nike insist the level of excess goods likely peaked in North America this summer. In Tuesday’s report, Nike reported inventories of $9.3 billion, up 43% from the same quarter a year ago. Analysts on average were projecting inventories of $8.83 billion, according to FactSet.

“The market is focused on progress to resolution of FY23 inventory issues as a set up to a strong margin recovery” in fiscal 2024, Stifel analysts said in a note last week.

Shares of Nike have declined 38% this year, while the broader S&P 500 index
SPX,
+0.10%
is down 20%.

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December 20, 2022
Oracle stock rises as earnings and revenue beat, but forecast is still to come

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Oracle Corp. topped Wall Street’s expectations for profit and revenue in its most recent quarter, though the software company is still expected to issue a forecast that could be more fraught.

Oracle
ORCL,
+1.78%
on Monday reported fiscal second-quarter net income of $1.74 billion, or 63 cents a share, on revenue of $12.28 billion, up from $10.36 billion a year ago. After adjusting for stock-based compensation and other costs, Oracle reported earnings of $1.21 a share, even with the same quarter a year ago.

Analysts on average expected adjusted earnings of $1.17 a share on sales of $11.96 billion, according to FactSet. Oracle shares gained nearly 3% in after-hours trading immediately after the results were announced, following a 1.8% increase to $81.29 in regular trading.

Oracle executives did not provide guidance for the fiscal third quarter in Monday’s announcement, but Chief Executive Safra Catz does typically provide a forecast in their conference call, which is scheduled for 5 p.m. Eastern time. Those numbers are likely to affect earnings more than the results, as concerns about an increasing slowdown in business spending have rocked a swath of software companies in recent weeks.

“We believe the darkest days of this downturn are ahead of us,” Monness Crespi Hardt analyst Brian J. White wrote in a preview of Oracle results, later adding that “results across Big Tech, the leading public clouds, and the enterprise software complex paint an increasingly concerning picture for the software world heading into 2023.”

Oracle stock has outperformed the S&P 500 index
SPX,
+1.43%
since executives hosted an event for financial analysts and investors in October, with shares gaining 4.8% in the past three months while the larger index fell 3.9%. Oracle executives promised to grow adjusted earnings by more than 10% every year as revenue growth accelerates, after years of stagnant sales growth led to large share repurchases and constant cuts to improve the software company’s bottom line.

Oracle is experiencing strong revenue growth thanks to the acquisition of healthcare-focused company Cerner, a $28 billion deal that closed in June. There are hopes for organic growth as well, though, as Oracle’s cloud-computing effort starts to show fruit, including winning part of a recent Defense Department contract after suing to halt an earlier version of that award.

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December 12, 2022
ChargePoint Results Fall Short. Guidance Is Saving the Stock.

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Shares of EV charging company

ChargePoint

have been caught in the sell off that’s hammered small-capitalization stocks that don’t produce earnings or generate free cash flow, yet. Investors hoped that third-quarter earnings could turn sentiment around, but some concerns linger.

ChargePoint

(ticker: CHPT), on Thursday afternoon, reported a per-share loss of 25 cents from $125 million in sales. Wall Street was looking for a loss of 20 cents per share on sales of $132.3 million.

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December 1, 2022
Okta CEO promises profit for all of next year — ‘The problem was never that we didn’t have talented sales people’

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Okta Inc. executives on Wednesday said they will report an adjusted profit in the fourth quarter and, in a surprise, predicted profitability for all of next fiscal year, trumping profit concerns stemming from recent sales-operation issues.

For the fourth quarter, Okta
OKTA,
+4.04%
guided for adjusted earnings of 9 cents to 10 cents a share on revenue of $488 million to $490 million. Analysts, on average, were expecting an adjusted loss of 12 cents a share on sales of $488.3 million, according to FactSet.

In a surprise announcement during the conference call, Chief Financial Officer Brett Tighe revealed a full forecast for fiscal 2024 as well. Most software companies shy away from such practices amid uncertainty about macroeconomic conditions. He said Okta executives are aiming for adjusted profits for the full year on revenue of $2.13 billion to $2.15 billion. Analysts on average expected adjusted losses of 30 cents a share on sales of $2.3 billion, beating profit projections widely but also missing sales expectations by more than $100 million.

Shares rallied as much as 18% in after-hours trading immediately following the release of the results, but those gains noticeably pared back to a steady 12% level after Tighe announced the outlook to analysts on the call. They have fallen 76% so far this year, compared with a 27% decline by the tech-heavy Nasdaq Composite Index
COMP,
+4.41%.

In an exclusive interview with MarketWatch ahead of the company’s conference call, Okta Chief Executive and co-founder Todd McKinnon said the company is not providing any forecasts past 2024 because of uncertainty in the macro environment.

“We’re thinking a pretty conservative assumption that the macro is going to get worse before it gets better, so that’s definitely factored into the guide,” McKinnon told MarketWatch.

On a more positive note, McKinnon said sales-rep attrition has been the lowest it has been in the past several quarters, following a spike last quarter. Okta also announced that Susan St. Ledger, the president of worldwide field operations, is retiring and McKinnon will take over her duties on an interim basis.

“What we’ve done over the last six months is what a lot of companies are doing, slowing hiring, re-evaluating real estate, doubling down on the things we know are high value. And some of the things that are maybe less value we’re doing less of, so that’s where we see the profitability come from,” McKinnon told MarketWatch.

Much of that comes from addressing the company’s struggle in combining Okta’s salesforce with sales reps acquired in the May 2021 acquisition of identity-platform Auth0 (pronounced “Auth Zero”), which is more focused on direct-to-user sales than Okta’s corporate focus.

“The problem was never that we didn’t have talented sales people,” McKinnon told MarketWatch. “The problem is that we didn’t enable them and clarify things with them.”

In-depth: Okta CEO says ‘short-term challenges’ resulted in workers leaving at a higher rate

“We still have work to do,” McKinnon said. “We don’t think we’ve solved it after one quarter of a positive trend but I do think it’s progress.”

“The biggest factor: We’ve really done a much better job clarifying the products and the positioning and saying we have two clouds: We have Workforce Identity Cloud and Customer Identity Cloud and it’s very clear what to sell when,” he said.

Okta reported a third-quarter loss of $208.9 million, or $1.32 a share, compared with a loss of $221.3 million, or $1.44 a share, in the year-ago period. After adjusting for stock-based compensation expenses and other items, the company reported break-even results on a per-share basis, compared with a loss of 7 cents a share in the year-ago period. Revenue rose to $481.4 million from $350.7 million in the year-ago quarter.

Analysts had forecast an adjusted loss of 24 cents a share on revenue of $465.4 million, based on the company’s forecast for a loss of 24 cents to 25 cents a share on sales of $463 million to $465 million.

For the current year, Okta forecast an adjusted loss of 27 cents to 26 cents a share on revenue of about $1.84 billion, compared with the Street’s forecast of 73 cents a share on revenue of $1.82 billion.

So far in November, cloud software stocks have been getting trashed. While the S&P 500
SPX,
+3.09%
has gained 5.4%, and the Nasdaq has advanced 4.4%, the iShares Expanded Tech-Software Sector ETF
IGV,
+4.39%
has risen 1.6%, the Global X Cloud Computing ETF
CLOU,
+6.00%
has ticked up 0.8%, the First Trust Cloud Computing ETF
SKYY,
+4.54%
has fallen 2%, and the WisdomTree Cloud Computing Fund
WCLD,
+4.99%
has dropped 6.9%.

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November 30, 2022
U.S. pending home sales drop for fifth straight month in October

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The numbers: U.S. pending home sales fell 4.6% in October, the fifth straight monthly decline, the National Association of Realtors said Wednesday.

Economists polled by the Wall Street Journal expected pending home sales to fall 5.5%.

The index captures transactions where a contract has been signed, but the home sale has not yet closed.

Key details: On a year-on-year basis, pending home sales were down a sharp 37%.

Sales fell in three of the four regions, with the Midwest registering an increase.

Big picture: Sales have stalled as mortgage rates have jumped, making houses less affordable. Pending home sales are a leading indicator for the sector. Some economists think that buyers might return to the market as mortgage rates have plateaued.

Market reaction: Stocks
DJIA,
-0.63%

SPX,
-0.35%
opened slightly higher on Wednesday. The yield on the 10-year Treasury note jumped to 3.78%.

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November 30, 2022
Cyber Monday deals lure in consumers amid high inflation

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NEW YORK — Days after flocking to stores on Black Friday, consumers are turning online for Cyber Monday to score more discounts on gifts and other items that have ballooned in price because of high inflation.

Cyber Monday is expected to remain the year’s biggest online shopping day and rake in up to $11.6 billion in sales, according to Adobe Analytics, which tracks transactions at over 85 of the top 100 U.S. online stores. That forecast represents a jump from the $10.7 billion consumers spent last year.

Adobe’s numbers are not adjusted for inflation, but the company says demand is growing even when inflation is factored in. Some analysts have said top line numbers will be boosted by higher prices and the amount of items consumers purchase could remain unchanged — or even fall — compared to prior years. Profit margins are also expected to be tight for retailers offering deeper discounts to attract budget-conscious consumers and clear out their bloated inventories.

Shoppers spent a record $9.12 billion online on Black Friday, up 2.3% from last year, according to Adobe. E-commerce activity continued to be strong over the weekend, with $9.55 billion in online sales.

Salesforce, which also tracks spending, said their estimates showed online sales in the U.S. hit $15 billion on Friday and $17.2 billion over the weekend, with an average discount rate of 30% on products. Electronics, active wear, toys and health and beauty items were among those that provided a big boost, the two groups said.

CONSUMERS ARE SPENDING CAUTIOUSLY

Mastercard SpendingPulse, which tracks spending across all types of payments including cash and credit card, said that overall sales on Black Friday rose 12% from the year-ago. Sales at physical stores rose 12%, while online sales were up 14%.

RetailNext, which captures sales and traffic via cameras reported that store traffic rose 7% on Black Friday, while sales at physical stores improved 0.1% from a year ago. However, spending per customer dropped nearly 7% as cautious shoppers did more browsing than buying. Another company that tracks store traffic — Sensormatic Solutions — said store traffic was up 2.9% on Black Friday compared to a year ago.

“Shoppers are being more thoughtful, but they are going to more than a few retailers to be able to make a determination of what they are going to buy this year,” said Brian Field, Sensormatic’s global leader of retail consulting and analytics.

Danny Groner, a 39-year-old who lives in New York City, said he and his wife want to get a new TV to replace one they’ve had for about seven years. He spent some time on Monday searching for deals online and found some good discounts. Still, he says he wants to be intentional about what he buys and doesn’t mind spending a bit more for the right product.

Overall, online spending has remained resilient in the past few weeks as eager shoppers buy more items on credit and embrace “buy now, pay later” services that lack interest charges but carry late fees.

In the first three weeks of November, online sales were essentially flat compared with last year, according to Adobe. It said the modest uptick shows consumers have a strong appetite for holiday shopping amid uncertainty about the economy.

Still, some major retailers are feeling a shift. Target, Macy’s and Kohl’s said this month they’ve seen a slowdown in consumer spending in the past few weeks. The exception was Walmart, which reported higher sales in its third quarter and raised its earnings outlook.

“We’re seeing that inflation is starting to really hit the wallet and that consumers are starting to amass more debt at this point,” said Guru Hariharan, founder and CEO of retail e-commerce management firm CommerceIQ, adding there’s more pressure on consumers to purchase cheaper alternatives.

SHIFTING DEMAND

This year’s Cyber Monday also comes amid a wider e-commerce slowdown affecting online retailers that saw a boom in sales during most of the COVID-19 pandemic. Consumers who feared leaving their homes and embraced e-commerce during the pandemic are heading back to physical stores in greater numbers this year as normalcy returns.

The National Retail Federation said its recent survey showed a 3% uptick in the number of Black Friday shoppers planning to go to stores. It expects 63.9 million consumers to shop online during Cyber Monday, compared to 77 million last year.

Amazon saw its retail business thrive during most of the pandemic, but much of the demand waned as the worst of the pandemic eased. To deal with the change, the company has been scaling back its warehouse expansion plans and is cutting costs by axing some of its projects. It’s also following in the steps of other tech companies and implementing mass layoffs in its corporate ranks. Amazon CEO Andy Jassy said the company will continue to cut jobs until early next year.

Shopify, a company which helps businesses set up e-commerce websites and also offers offline software, laid off 10% of its staff this summer.

The company said Monday that its merchants have surpassed $5.1 billion in global sales since the start of Black Friday in New Zealand. And spending per U.S. customer went up $5 compared to last year, said Shopify President Harley Finkelstein.

Despite the bump, Finkelstein said shoppers were more intentional about their spending this year and waiting for discounts before making a purchase.

————

AP Business Writer Anne D’Innocenzio contributed to this report.

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November 28, 2022
Cyber Monday deals lure in consumers amid high inflation

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NEW YORK — Days after flocking to stores on Black Friday, consumers are turning online for Cyber Monday to score more discounts on gifts and other items that have ballooned in price because of high inflation.

Cyber Monday is expected to remain the year’s biggest online shopping day and rake in up to $11.6 billion in sales, according to Adobe Analytics, which tracks transactions at over 85 of the top 100 U.S. online stores. That forecast represents a jump from the $10.7 billion consumers spent last year.

Adobe’s numbers are not adjusted for inflation, but it says demand is growing even when inflation is factored in. Some analysts have said top line numbers will be boosted by higher prices and the amount of items consumers purchase could remain unchanged — or even fall — compared to prior years. Profit margins are also expected to be tight for retailers offering deeper discounts to attract budget-conscious consumers and clear out their bloated inventories.

Shoppers spent a record $9.12 billion online on Black Friday, up 2.3% from last year, according to Adobe. E-commerce activity continued to be strong over the weekend, with $9.55 billion in online sales.

Salesforce, which also tracks spending, said their estimates showed online sales in the U.S. hit $15 billion on Friday and $17.2 billion over the weekend, with an average discount rate of 30% on products. Electronics, active wear, toys and health and beauty items were among those that provided a big boost, the two groups said.

Meanwhile, consumers who feared leaving their homes and embraced e-commerce during the pandemic are heading back to physical stores in greater numbers this year as normalcy returns. The National Retail Federation said its recent survey showed a 3% uptick in the number of Black Friday shoppers planning to go to stores. It expects 63.9 million consumers to shop online during Cyber Monday, compared to 77 million last year.

CONSUMERS ARE SPENDING CAUTIOUSLY

Mastercard SpendingPulse, which tracks spending across all types of payments including cash and credit card, said that overall sales on Black Friday rose 12% from the year-ago. Sales at physical stores rose 12%, while online sales were up 14%.

RetailNext, which captures sales and traffic via sensors, reported that store traffic rose 7% on Black Friday, while sales at physical stores improved 0.1% from a year ago. However, spending per customer dropped nearly 7% as cautious shoppers did more browsing than buying. Another company that tracks store traffic — Sensormatic Solutions— said store traffic was up 2.9% on Black Friday compared to a year ago.

“Shoppers are being more thoughtful, but they are going to more than a few retailers to be able to make a determination of what they are going to buy this year,” said Brian Field, Sensormatic’s global leader of retail consulting and analytics.

Overall, online spending has remained resilient in the past few weeks as eager shoppers buy more items on credit and embrace “buy now, pay later” services that lack interest charges but carry late fees.

In the first three weeks of November, online sales were essentially flat compared with last year, according to Adobe. It said the modest uptick shows consumers have a strong appetite for holiday shopping amid uncertainty about the economy.

Still, some major retailers are feeling a shift. Target, Macy’s and Kohl’s said this month they’ve seen a slowdown in consumer spending in the past few weeks. The exception was Walmart, which reported higher sales in its third quarter and raised its earnings outlook.

“We’re seeing that inflation is starting to really hit the wallet and that consumers are starting to amass more debt at this point,” said Guru Hariharan, founder and CEO of retail e-commerce management firm CommerceIQ, adding there’s more pressure on consumers to purchase cheaper alternatives.

SHIFTING DEMAND

This year’s Cyber Monday also comes amid a wider e-commerce slowdown affecting online retailers that saw a boom in sales during most of the COVID-19 pandemic. Amazon, for example, raked in record revenue but much of the demand has waned as the worst of the pandemic eased and consumers felt more comfortable shopping in stores.

To deal with the change, the company has been scaling back its warehouse expansion plans and is cutting costs by axing some of its projects. It’s also following in the steps of other tech companies and implementing mass layoffs in its corporate ranks. Amazon CEO Andy Jassy said the company will continue to cut jobs until early next year.

Shopify, another company which helps businesses set up e-commerce websites, laid off 10% of its staff this summer.

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November 28, 2022
‘There are plenty of storm clouds on the horizon’: 5 things not to buy on Black Friday

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It’s a year for shopping prudently.

Americans will spend between $942.6 billion and $960.4 billion this holiday season, according to projections from the National Retail Federation. That’s up from last year when holiday sales hit a record $889.3 billion, the trade association said.

However, people are not willing to go as crazy this Black Friday compared to previous years: that 6% to 8% year-over-year growth expectation is slower than the 13.5% annual increase in holiday season spending in 2021 when consumers had pandemic-era government benefits to spend.

Once again, millions of people will also be shopping from the comfort of their home and avoiding the Black Friday crowds. Online and other non-store sales are predicted to rise 10% to 12% (to between $262.8 billion and $267.6 billion).

“People have reason to be concerned about their spending. ”

“The economy is probably doing better than it feels right now, but that’s not true for everyone of course,” said Ted Rossman, senior industry analyst at Bankrate.com. “There are plenty of storm clouds on the horizon.” He cited rising interest rates, 40-year high inflation and tech layoffs.

People have reason to be concerned about their spending. The personal saving rate — meaning personal saving as a percentage of disposable income, or the share of income left after paying taxes and spending money — fell to 3.3% in the third quarter from 3.4% in the prior quarter, the government said last month.

Despite a strong labor market and unemployment hovering at 3.7% in October, Rossman said, “it still seems like a recession is likely in 2023, although the best guess is that it will be a mild one.”

So what should you not buy this Black Friday? Quite a lot, if you don’t believe in living large. Here are 5 things to think about avoiding:

— Quentin Fottrell

Tech accessories

For tech accessories — like earbuds and headphones — waiting until December may be a better way to score better deals, added Ryan McGonagill, director, industry research at Savings.com, another site that aggregates discounts.

The most popular electronic products like Apple AAPL iPads, MacBooks and iPhones have scant Black Friday deals. “For a limited time, get an Apple Gift Card to use on a later purchase when you buy an eligible iPhone, Apple Watch, Mac, AirPods, and more,” according to Apple’s Black Friday offer.

Computer makers and retailers, however, are coming off the work-from-home boom and may have inventory they need to thin before year’s end. Holiday discounts on computers, at least through October, were at 10% off the base price, according to analysis from Adobe
ADBE,
+2.92%.

The software and analytics provider said computer discounts could go much steeper, up to 32% off the base price before the end of the year. Cyber Monday could be the best day for bargains on computers, Adobe said, but computer deals may stick around for the rest of 2022.

Pay attention to early deals, if you desperately need a new laptop. “Many retailers offer the same pricing on Black Friday and Cyber Monday,” said Kristin McGrath, editor at RetailMeNot.com, a site that promotes deals. “So start looking on Black Friday and use Cyber Monday as a second chance to snag what you missed.”

— Andrew Keshner

Seasonal items

Winter wear is usually not going to be on sale before Christmas, so it’s best to shop for your puffy jackets and snow boots in the New Year, if you can. The same goes for white linen, tools and holiday decorations, said Charles Lindsey, associate professor in the Marketing School of Management at the University at Buffalo.

Most stores put their coats, hats, scarves and flannel pajamas on sale — with discounts on big-name brands of 50% or more in January — to make room for their spring collections. Similarly, buy summer clothes in the fall and winter.

“The best time to buy holiday decor is immediately after said holidays,” according to DealNews, a site offering shopping advice. “After Christmas sales are generally your best bet for snagging deeply discounted ornaments, lights, and inflatables in order to be well prepared for next year.”

Fashion-conscious shoppers inclined to snap up discounted items may want to practice patience on Black Friday. Apparel may have even deeper discounts after the holidays. If you feel compelled to buy something new to wear to the office party, invest in quality pieces. Fast fashion has a cost: It has contributed to a waste crisis, in part because such items are not meant to last very long in your closet.

But that does not mean you should not keep your eyes peeled for some seasonal goods on Black Friday. Walmart
WMT,
+0.34%,
for instance, is pushing out the boat early with some discounts on toys, including hoverboards, bicycles, remote-control cars, and karaoke machines. Similarly, Kohl’s
KSS,
+4.17%
has discounts on a range of doll’s houses.

— Quentin Fottrell and Emma Ockerman

Appliances and white goods

There might be tempting Black Friday deals on appliances, mattresses and furniture. Discounts on appliances may reach up to an 18% from the base price, Adobe said. Still, “you’re going to get another shot at them during New Year’s Eve sales and again during Presidents Day sales in February,” McGrath said.

If Black Friday is “too chaotic …you’ll have plenty of opportunities to save,” she added. Department stores usually run very attractive discounts on houseware in the days following Christmas. “Stores know they’ll be getting a lot of traffic with so many people returning gifts — and hope to convince shoppers to make an impulse self-gifting purchase or two,” McGrath said.

If you can’t wait, Costco
COST,
+1.64%
is already rolling out deals on white goods and appliances, including $70 off a Sonos
SONO,
+1.87%
WiFi speaker. However, Consumer Reports cautions consumers against falling for big deals without checking out the reliability of the brand first, as you could end up paying more in repairs down the road.

You might be tempted by offers and rebates on matching kitchen suites — typically a refrigerator, range, dishwasher, and microwave — from the same maker,” Consumer Reports said. “But price is only part of the equation when you’re purchasing appliances. Reliability is key, and it can vary within a brand’s offerings.”

— Andrew Keshner

Fitness equipment

One of the best times to buy exercise equipment is around the New Year, when people are making resolutions to improve their health, said Regina Conway, who researches sales and promotions for Slickdeals, a site that tracks retail discounts.

When you make your purchase, think twice before buying equipment that runs on proprietary technology, like Peloton
PTON,
-1.13%
or Lululemon’s
LULU,
+1.79%
Mirror exercise products, mainly because the at-home fitness boom faces an uncertain future post-pandemic, Conway noted.

However, this Black Friday is a little different than previous years, and there are some deals in categories that traditionally don’t have good Black Friday discounts, including exercise equipment. “This year we’re seeing strong Black Friday deals from industry stalwarts like NordicTrack,” Conway said.

Peloton Interactive, which is facing a challenging time since people are no longer stuck at home due to the pandemic, is currently offering $600 off this fitness bike package. However, consumers will still have to fork over $2,195 for the machine and exercise regime.

“We think consumers are likely to continue to prefer out-of-home experiences in the near-term and believe Peloton is still working through pandemic pull-forward,” Cowen & Co. analyst John Blackledge wrote in an analyst note on Tuesday, citing “limited visibility” on Peloton’s fiscal 2023 performance.

— Leslie Albrecht and Quentin Fottrell

Big-ticket items like TVs

Does Amazon
AMZN,
+0.80%
founder Jeff Bezos have a point about the dangers of splurging this year? In something of a Black Friday surprise, Bezos offered some shocking spending tips as Americans gear up for the holiday shopping season — amid four-decade-high inflation. Or, to be more accurate, he offered tips on what not to spend your money on.

‘If you’re an individual and you’re thinking about buying a large-screen TV, maybe slow that down, keep that cash, see what happens. Same thing with a refrigerator, a new car, whatever. Just take some risk off the table,” Bezos said in a recent interview on CNN
WBD,
+2.27%.
The remarks drew a significant amount of scorn on social media, with some critics advising people to avoid shopping on Amazon too.

About those TVs: “They’re normally not going to be a high-end TV brand,” Lindsey said. “It will be a lower to mid-tier brand. Companies utilize these TVS as doorbusters to get people in the store and people clicking on their website. You’re probably better off shopping around the Superbowl in late January.”

Rossman said consumers are becoming more judicious about their Black Friday splurging. “People seem to be pulling back on some big-ticket purchases,” he told MarketWatch. “For example, sellers of appliances, electronics and furniture all posted disappointing results in the most recent retail sales report.”

“Yet discretionary sectors such as travel and dining are seeing sharp increases in spending,” he added. “I think the main explanation is pent-up demand. People are prioritizing experiences over things right now, largely due to the pandemic. There was also a pull-forward in demand for many physical goods the past couple of years as many out-of-home activities were curtailed.”

— Quentin Fottrell

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November 22, 2022
U.S. existing home sales retreat for a record ninth straight month in October

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The numbers: Existing-home sales fell 5.9% to a seasonally adjusted annual rate of 4.43 million in October, the National Association of Realtors said Friday. Compared with October 2021, home sales were down 28.4%.

Economists polled by the Wall Street Journal had expected an decrease to 4.37 million units.

The level of sales is the lowest since December 2011 excluding the 2020 pandemic.

This is also the ninth straight monthly decline in sales, the longest streak on record.

Key details: The median price for an existing home was $379,100 up 6.6% from October 2021.

But price gains are decelerating. Prices were up over 20% on a year-on-year basis earlier this year.

Housing inventory fell 0.8% to 1.22 million units in October. Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in September and 2.4 months a year ago.

A 6-month supply of homes is generally viewed as indicative of a balanced market.

Sales declined in all regions of the country.

Big picture: Home sales have dropped as mortgage rates have risen sharply and affordability has dropped.

Softer inflation data in October have led to a drop in mortgage rates, which could lead for a floor on sales.

At the same time, Federal Reserve officials may pencil in a “peak” interest rate above 5% at the policy meeting next month.

Economists see home prices have further to fall in this market.

What the NAR is saying: Home sales have been very low and the softness could continue for a few months. But sales could pick up early next year if the mortgage rate has peaked, said Lawrence Yun, chief economist at the NAR.

Market reaction: Stocks
DJIA,
+0.59%

SPX,
+0.48%
opened lower on Friday. The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.827%
rose to 3.79%.

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November 18, 2022
World Cup organizers in Qatar will reportedly ban beer sales at all eight stadiums

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DOHA, Qatar (AP) — World Cup organizers will ban the sale of all beer with alcohol at the eight stadiums used for the soccer tournament, a person with knowledge of the decision told The Associated Press.

The decision comes only two days before games start in Qatar and 12 years after the country first consented to respect FIFA’s commercial partners.

Non-alcoholic beer will still be available for fans at the 64 matches, the person said.

The person spoke on condition of anonymity because organizers have not yet announced the decision.

Champagne, wine, whiskey and other alcohol is still expected to be served in the hospitality areas of the stadiums. Outside of those places, beer is normally the only alcohol sold to regular ticket holders.

Ronan Evain, the executive director of the fan group Football Supporters Europe, called the decision to ban beer sales at the stadiums “extremely worrying.”

“For many fans, whether they don’t drink alcohol or are used to dry stadium policies at home, this is a detail. It won’t change their tournament,” Evain wrote on Twitter. “But with 48 (hours) to go, we’ve clearly entered a dangerous territory — where ‘assurances’ don’t matter anymore.”

While a sudden decision like this may seem extreme in the West, Qatar is an autocracy governed by a hereditary emir, who has absolute say over all governmental decisions.

Qatar, an energy-rich Gulf Arab country, follows an ultraconservative form of Islam known as Wahhabism like neighboring Saudi Arabia. However, alcohol sales have been permitted in hotel bars for years.

Qatar’s government and its Supreme Committee for Delivery and Legacy did not immediately respond to request for comment.

Already, the tournament has seen Qatar change the date of the opening match only weeks before the World Cup began.

Budweiser’s parent company, AB InBev
ABI,
+1.28%

BUD,
-0.05%,
pays tens of millions of dollars at each World Cup for exclusive rights to sell beer. and has already shipped the majority of its stock from Britain to Qatar in expectation of selling its product to millions of fans. The company’s partnership with FIFA started at the 1986 tournament and they are in negotiations for renewing their deal for the next World Cup in North America.

When Qatar launched its bid to host the World Cup, the country agreed to FIFA’s requirements of selling alcohol in stadiums, and again when signing contracts after winning the vote in 2010.

At the 2014 World Cup in Brazil, the host country was forced to change a law to allow alcohol sales in stadiums.

AB InBev’s deal with FIFA was renewed in 2011 — after Qatar was picked as host — in a two-tournament package through 2022. However, the Belgium-based brewer has faced uncertainty in recent months on the exact details of where it can serve and sell beer in Qatar.

An agreement was announced in September for beer with alcohol to be sold within the stadium perimeters before and after games. Only alcohol-free Bud Zero would be sold in the stadium concourses for fans to drink in their seats in branded cups.

Last weekend, AB InBev was left surprised by a new policy insisted on by Qatari organizers to move beer stalls to less visible locations within the perimeter.

Budweiser was also to be sold in the evenings only at the official FIFA fan zone in downtown Al Bidda Park, where up to 40,000 fans can gather to watch games on giant screens. The price was confirmed as $14 for a beer.

Ab InBev did not immediately respond to a request for comment.

The company will be based at an upscale hotel in the West Bay area of Doha with its own branded nightclub for the tournament.

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November 18, 2022