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Thursday November 30, 2023

Finances

Finances
 

Acuity Brands Posts Earnings Reports

Acuity Brands, Inc. (AYI) reported its second quarter earnings on Tuesday, April 4. The technology company's stock fell by more than 9% following the release of the report, despite announcing increased sales.

The company's net sales reached $943.6 million for the second quarter, up almost 4% from $909.1 million during the same period last year. This was below analysts' expectations of $958.5 million for the quarter.

"We delivered solid performance again in the second quarter of 2023," said Acuity Brands, Inc. CEO, Neil Ashe. "We grew sales in both our lighting and spaces businesses, expanded adjusted operating profit, and grew adjusted diluted earnings per share. We generated strong cash flow from operations and created permanent value for shareholders through repurchases."

Acuity Brands reported quarterly net income of $83.2 million or $2.57 per adjusted share. This was an increase from $75.3 million in net income or $2.13 per adjusted share during the same period last year.

The Atlanta, Georgia-based industrial technology manufacturer saw an increase in sales throughout its two main segments. Net sales for Acuity Brands Lighting and Lighting Controls (ABL) increased by 3.2% to $890.8 million in the second quarter. Acuity's Intelligent Spaces Group (ISG) also saw growth in sales with an increase of 16.4% to $58.2 million. For fiscal 2023, the company expects net sales to be in the range of $4.1 billion to $4.3 billion.

Acuity Brands, Inc. (AYI) shares ended the week at $158.66 down 13% for the week.

Conagra Foods Reports Quarterly Results


Conagra Foods, Inc. (CAG) announced its third quarter earnings on Wednesday, April 5. The Chicago-based food company's stock rose 2.6% after it reported better than expected profits for the quarter.

The company reported revenue of $3.09 billion during the third quarter. This was up 6% from $2.91 billion in the same quarter last year. The increase narrowly surpassed analysts' estimates of $3.08 billion.

"We delivered another quarter of strong results reflecting the ongoing strength of our brands and successful execution of the Conagra Way playbook," said Conagra CEO, Sean Connolly. "Our top-line posted solid growth as we demonstrated strong pricing execution with modest elasticities. Additionally, our productivity and service level improvement allowed us to continue to make meaningful progress on our adjusted gross margin and adjusted operating margin recovery, despite more impactful supply chain disruptions than anticipated."

For the quarter, Conagra reported a net income of $341.7 million or $0.71 per adjusted share. This was up 60% from net income of $218.4 million, or $0.45 per adjusted share reported during the comparable period last year.

The packaged foods company, which owns popular brands such as Duncan Hines, Healthy Choice and Slim Jim, reported an increase of 6.1% in organic net sales across all Conagra brands. The company's grocery and snacks segment accounted for $1.2 billion in net sales, a 3.7% increase from the same time last year. Conagra's refrigerated and frozen segment increased 5.6% to $1.3 billion in the quarter, while foodservice increased 17.3% to $275 million. The company raised its full year fiscal guidance and anticipates net revenues between $6.3 billion and $6.4 billion, or $1.30 to $1.40 per adjusted share.

Conagra Foods, Inc. (CAG) shares ended the week at $38.38, up 2% for the week.

Levi Strauss Reports Earnings


Levi Strauss & Co. (LEVI) announced its first quarter financial results on Thursday, April 6. While the denim-maker reported better-than-expected results, shares decreased more than 6% following the earnings release.

Levi reported revenue of $1.69 billion for the first quarter, which was up 6% from revenue of $1.59 billion in the same quarter last year. Analysts expected revenue of $1.62 billion in the quarter.

"Our first quarter results reflect the strength of our brands and the progress we are making against our strategic priorities," said Levi Strauss CEO, Chip Bergh. "We delivered strong growth in our international business and record-breaking revenue performance in our direct-to-consumer channel. This past quarter in the U.S., we were the market share leader among the key 18 to 30-year-old consumer, and we continued to grow share in our women's denim bottoms business, further narrowing the gap to number one."

The company reported a first quarter net income of $114.7 million or $0.29 per adjusted share. This is down from net income of $195.8 million or $0.48 per adjusted share reported during the same quarter last year.

Levi's earnings report highlighted growth across most business segments. The company's global direct-to-consumer (DTC) revenue increased 12%, which comprised 33% of the first quarter revenues. E-commerce increased 11% and wholesale revenues increased 2%, which the company attributed to strong growth in U.S., Canada and Asia. Levi declared a dividend of $0.12 per share of common stock, up from last year's dividend. The dividend will be due to the stockholders of record for Class A and Class B common stock on May 4, 2023, and is payable on May 18, 2023. The company reaffirmed its guidance for fiscal 2023 and anticipates net revenues between $6.3 billion and $6.3 billion or $1.30 to $1.40 per adjusted share.

Levi Strauss & Co. (LEVI) shares ended at $15.14, down 17% for the week.

The Dow started the week of 4/3 at 33,246 and closed at 33,485 on 4/6. The S&P 500 started the week at 4,102 and closed at 4,105. The NASDAQ started the week at 12,146 and closed at 12,088.
 

Treasury Yields Edge Lower

U.S. Treasury yields declined this week as markets reacted to weaker-than-expected labor market data. Yields partially recovered Friday after March's job report showed signs of a cooling labor market.

On Friday, the Bureau of Labor Statistics released data for March's job market. The report revealed that hiring in March decreased, with U.S. employers adding 236,000 jobs for the month and the unemployment rate declining to 3.5%. March's totals came in below market estimates of 239,000 jobs for the month and a 3.6% expected unemployment rate.

"The labor market continues to remain resilient and is a pillar of strength," said lead economist at Glassdoor, Daniel Zhao. "The Fed is looking for balance from the labor market, and today's report is a step in the right direction."

The benchmark 10-year Treasury note yield opened the week of 4/3 at 3.47% and traded as low as 3.27% on Wednesday. The 30-year Treasury bond opened the week at 3.65% and traded as low as 3.55% on Wednesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment dropped by 18,000 to 228,000 for the week ending April 1 as seasonally adjusted, but still exceeded estimates of 200,000. Continuing unemployment claims increased 6,000 to over 1.82 million.

"Our initial gut instinct is that the new seasonals may overstate the upward trend to some extent, but that they capture the direction of claims better than the old seasonals," said chief economist at Wrightson ICAP, Lou Crandall. "Our early guess is that the 18,000 decline in the level for April 1 is a one-week fluke and that next week's number will move back in the direction of the prior week's level of 246,000."

The 10-year Treasury note yield finished the week of 4/3 at 3.41%, while the 30-year Treasury note yield finished the week at 3.62%.
 

30-Year Mortgage Rate Continues to Decline

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, April 7. The 30-year mortgage rate fell for the fourth consecutive week.

This week, the 30-year fixed rate mortgage averaged 6.28%, down from last week's average of 6.32%. Last year at this time, the 30-year fixed rate mortgage averaged 4.72%.

The 15-year fixed rate mortgage averaged 5.64% this week, up from 5.56% last week. During the same week last year, the 15-year fixed rate mortgage averaged 3.91%.

"Mortgage rates continue to trend down entering the traditional spring homebuying season," said Freddie Mac's Chief Economist, Sam Khater. "Unfortunately, those in the market to buy are facing a number of challenges, not the least of which is the low inventory of homes for sale, especially for aspiring first-time homebuyers."

Based on published national averages, the savings rate was 0.37% as of 03/20. The one-year CD averaged 1.49%.

Editor's Note: The publicly available financial information is offered as a helpful and informative service to our friends. This article is not an endorsement of any company, product or service.

Published April 7, 2023

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