Thursday November 19

Thursday November 19

over 3 years ago3 mins

Mentioned in story

Lowe’s Earnings Update Fell Short Of Expectations

Lowe's image

One-time American sweetheart Lowe’s reported worse-than-expected quarterly earnings on Wednesday, and investors ditched the home improvement retailer’s shares 🏚

What does this mean?

Sure, Lowe’s sales were better than analysts expected, thanks to twice as many online sales as the same time last year. But its profits – weighed down by store refurbishments and ecommerce investments – weren’t able to live up to estimates 🛠 Workforce expenses were a biggy too: Lowe’s has been paying its staff higher wages during the pandemic, and the move’s cost it $1 billion in the first nine months of the year. Still, at least that’s not Home Depot money: Lowe’s DIY rival reported costs closer to $2 billion on Tuesday.

Lowe’s stock
Source: Google Finance

Why should I care?

Lowe’s shares took off after the coronavirus outbreak. That’s mostly because its status as an “essential retailer” allowed the company to keep its doors open during lockdown, and because it hoovered up cash that would’ve been for holidays instead of home improvements 💵 But with its sales growth slipping from summer peaks, the question for investors now is just how sustainable those gains will be. Maybe Lowe’s ought to follow Target’s example: the discount retailer reported an increase in its market share on Wednesday, which should set it up for success when the pandemic’s behind us.

Lowe’s quarterly sales

Shopping habits are changing left, right, and center, but one of the most notable shifts is in luxury spending. China’s now set to become the biggest luxury market by 2025 according to consultancy Bain, with the country’s wealthiest traveling less and splurging more on home turf 🇨🇳 At least that gives luxury retailers something to look forward to after a terrible 2020: this year won’t just see the sector’s first drop in sales since 2009, it’ll see the biggest drop in sales ever – and things aren’t expected to get back to pre-pandemic levels till 2023.

Lowe’s gif

Read on for our next story...

Maersk Upped Its Earnings Expectations

Maersk image

Thank goodness Maersk navigated these troubled waters without making too much mess on the poop deck: the shipping company upped its earnings expectations on Wednesday 🚢

What does this mean?

The world is moving again: there were 1% more containers on the move last quarter compared to the same time last year, and Maersk transports around a fifth of them. And with so many shipments to make, the company’s now raised its profit expectations for the second time in as many months.

Maersk doesn’t even seem to be worried about the global surge in coronavirus infections 🌊 Lockdowns or no lockdowns, after all, shoppers are still spending their money. If anything, they’re spending it on flatscreens and games consoles rather than nights out with friends, which are notoriously difficult to ship in a metal container.

Freight prices have been surging since May

Why should I care?

Maersk’s considered to be a bellwether stock for global trade, which means its recovery is a good sign for broader economic activity 🌎 Goldman Sachs might feel especially vindicated by the shipping company’s outlook: the investment bank is predicting that US economic growth will reach 5.3% in 2021 – far better than consensus expectations of 3.8%. As for US stocks, it reckons they’ll climb from current levels by almost 20%.

If transport’s back up and running, the business world doesn’t seem to have got the memo: tech guru Bill Gates thinks business travel will be cut in half even when COVID-19 is under control ✈️ That isn’t something airplane maker Boeing wanted to hear: airlines aren’t going to need as many of its planes if there are fewer people flying for work, which is the most lucrative part of air travel. Talk about bad timing: its 737 Max airplane has just been cleared to fly again after an almost two-year ban…

Maersk gif


All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG