==American Airlines (AAL) cuts Q2 profit outlook, says chief commercial officer is leaving

• American Airlines slashed its sales outlook on Tuesday and now expects unit revenues to fall as much as 6% in the second quarter from a year earlier.
• The company has also let go of its chief commercial officer, Vasu Raja.

American Airlines lowers Q2 EPS, adjusted operating margin, and TRASM guidance in SEC filing 

• Co lowers guidance for Q2 (Jun), sees EPS of approximately $1.00-$1.15, excluding non-recurring items, vs. prior guidance of approximately $1.15-$1.45, and below the $1.30 FactSet Consensus.
  • Sees adjusted operating margin of approximately 8.5%-10.5% vs. prior guidance of 9.5%-11.5%.
  • Sees TRASM of approximately -5% to -6% compared to prior guidance of down 1% to 3%.
  • Reaffirms available seat miles guidance of +7% to +9%.
  • Sees CASM-ex of flat to +1% compared to prior guidance of +1% to +3%.
  • Average fuel price of $2.70-2.80 compared to prior guidance of $2.75-$2.95.

American Airlines said on Tuesday that it is slashing its second-quarter profit outlook and that its Chief Commercial Officer Vasu Raja will step down in June, prompting shares of the carrier to plummet by more than 7% in after-hours trading.

The company said it is expecting its unit revenue to be down between 5% and 6% when compared to a year ago. It had previously forecasted that revenue would decline between 1% and 3%.

American also updated its adjusted earnings per share estimate, and said it expects that metric to be between $1.00 and $1.15 during the period, down from its previous range of $1.15 and $1.45 earnings per share.

On Raja’s departure, the Fort Worth, Texas-based airliner said that he had served as the company’s CCO since April 2022. Raja joined American in 2004 and held a number of positions across sales, planning, and revenue management, the company said.

===Leslie's (LESL) guides JunQ EPS and revs below consensus

 

Leslie's guides Q3 EPS and revs below consensus; lowers FY23 outlook due to traffic declines in Residential and Pro businesses; CFO Steve Weddell stepping down, effective August 7; to be succeeded by Scott Bowman

• Co issues downside guidance for Q3 (Jun), sees EPS of $0.39-0.41, excluding non-recurring items, vs. $0.69 FactSet Consensus; sees Q3 (Jun) revs of $611 mln vs. $701.33 mln FactSet Consensus.
• Co issues downside guidance for FY23 (Sep), sees EPS of $0.28-0.32, excluding non-recurring items, vs. $0.77 FactSet Consensus; sees FY23 (Sep) revs of $1.43-1.45 bln vs. $1.6 bln FactSet Consensus.
  • Prior guidance was EPS of $0.78-$0.86 and revs of $1.560-$1.640 bln
• Co added, "Our fiscal third quarter results were well below our expectations as low double digit traffic declines in our Residential and Pro businesses drove negative comps across both discretionary and non-discretionary categories. While abnormal weather continued to pressure traffic levels, customer surveys conducted towards the end of the quarter also indicated increased price sensitivity and that consumers entered the pool season with a greater than normal amount of chemicals leftover from last year."
• Co also announced that Scott Bowman has been appointed CFO, effective August 7, 2023. Mr. Bowman will join the company on July 17, 2023 and serve as Chief Financial Officer Designate through August 6, 2023. Steve Weddell, who is stepping down as CFO effective August 7, 2023, will remain an advisor to the Company through December 31, 2023 to facilitate the transition.

• Leslie's (LESL) is making some waves today in the swimming pool space. Leslie's is the largest US retailer of swimming pool supplies (cleaning chemicals, equipment, accessories, toys).
• LESL's Q3 (Jun) guidance last night was well below analyst expectations and it lowered FY23 guidance. The company cited low double digit traffic declines in its Residential and Pro businesses, which drove negative comps across both discretionary and non-discretionary categories. While abnormal weather pressured traffic levels, LESL also said surveys indicated increased price sensitivity and that consumers entered the pool season with a greater than normal amount of chemicals leftover from last year.
• This guidance runs counter to the general theme that homeowners are investing in their homes to make them better as they decide not to move and forfeit their low rate mortgages. Granted, LESL focuses more on pool supplies rather than installations, so we do not want to read too much into this, but it is still a bit disconcerting. Its weak guidance is dragging down pool distributors/manufacturers like Pool Corp. (POOL -4.1%) and Latham Group (SWIM -0.1%) although they have recovered off their lows.
• One related company that has impressed us is Trex (TREX 69.87 -0.68). It is a supplier of wood-alternative decking and railing, so it's not a swimming pool company, but it is in the backyard sphere. It was notably more positive on its Q1 call in May than it had been on prior calls. So this LESL guidance makes us a little nervous ahead of TREX's Q2 report in early August, but not really. TREX sounded quite positive heading into this summer season, but we will see. Read our July 3 InPlay profile for full details on TREX.

-=Western Digital (WDC) reported earnings on Wed 5 Aug 20 (a/h)

Western Digital beats by $0.01, misses on revs; guides SepQ EPS below consensus, revs below consensus

Reports Q4 (Jun) earnings of $1.23 per share, excluding non-recurring items, $0.01 better than the S&P Capital IQ Consensus of $1.22; revenues rose 18.0% year/year to $4.29 bln vs the $4.34 bln S&P Capital IQ Consensus.

Co issues downside guidance for Q1 (Sep), sees EPS of $0.45-0.65, excluding non-recurring items, vs. $1.32 S&P Capital IQ Consensus; sees Q1 revs of $3.70-3.90 bln vs. $4.36 bln S&P Capital IQ Consensus.

=Sanmina (SANM) reported earnings on Mon 28 Oct 19 (a/h)

Sanmina beats by $0.04, misses on revs; guides Q1 EPS below consensus, revs below two analyst estimate; Announces $200 mln share repurchase, Company-wide Right-sizing plan 

Reports Q4 (Sep) earnings of $0.84 per share, excluding non-recurring items, $0.04 better than the S&P Capital IQ Consensus of $0.80; revenues rose 0.9% year/year to $1.89 bln vs the $1.98 bln S&P Capital IQ Consensus.

Co issues downside guidance for Q1, sees EPS of $0.65-0.75, excluding non-recurring items, vs. $0.87 S&P Capital IQ Consensus; sees Q1 revs of $1.725-1.825 bln vs. $2.09 bln two analyst estimate.

Expanded Share Repurchase Program

• The Board of Directors has authorized the repurchase of up to an additional $200 million of Sanmina's common stock. The new stock repurchase program has no expiration date. As of September 28, 2019, $100.8 million remained available under the current program approved in September 2017. This brings the outstanding Board authorized common stock repurchase amount to $300.8 million. 

Company-wide Right-sizing Plan

• On October 28, 2019, the Company adopted a company-wide right-sizing plan. Under this plan, the Company expects to incur restructuring charges of approximately $10 million to $20 million, consisting primarily of cash severance costs.

"We expect demand to be soft in the first half of the fiscal year as a result of excess inventory in the channel, slower than anticipated 5G deployment and global economic uncertainty. As a result, we have initiated a plan to right size the organization to further improve operational efficiencies and optimize our cost structure. This right-sizing, coupled with our focus on the quality of our revenue, will support our ongoing operating margin, non-GAAP earnings per share and cash generation objectives," stated Hartmut Liebel, Chief Executive Officer.

Gildan Activewear (GIL) reports downside prelim Q3 results and cuts FY19 guidance

• Earnings: Oct 31 b/o

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Gildan Activewear reports downside prelim Q3 results and cuts FY19 guidance

Co sees Q3 (Sep) EPS of ~$0.53, excluding items, vs. $0.57 S&P Capital IQ Consensus; sees Q3 (Sep) revs of ~$740 mln vs. $790.67 mln S&P Capital IQ Consensus. The previous guidance provided on August 1, 2019 called for adjusted diluted EPS growth to be flat in the third quarter, on projected sales growth in the mid-single-digit range over the third quarter last year. During the third quarter of 2019, co experienced significantly weaker than expected demand for imprintables in North America and ongoing softness in international imprintable markets. Specifically in the U.S. imprintables channel, where the co was expecting low-single-digit growth in distributor point-of-sales (POS), actual POS during the third quarter was down high-single-digits compared to last year. Further, in international imprintable markets where the Company was forecasting growth, continued softness in Europe and China resulted in lower international sales for the quarter compared to last year. While overall imprintable sales were weaker than expected, overall retail sales were essentially in line with co's expectations.

Company is revising its 2019 guidance to reflect the approximate $50 million sales shortfall in the third quarter and is assuming the current demand weakness for imprintables both in North America and internationally will persist through the fourth quarter.... sees FY19 (Dec) EPS of $1.65-1.70, prior $1.95-2.00, excluding non-recurring items, vs. $1.97 S&P Capital IQ Consensus; Adjusted EBITDA of $545 to $555 million, compared to previous guidance of in excess of $615 million; and free cash flow for 2019 of $200 to $250 million compared to previous guidance of $300 to $350 million

=U.S. Steel (X) guides Q3 EPS below consensus

U.S. Steel guides Q3 EPS below consensus, note: Nucor also guided lower on Monday; co expects idled blast furnaces in US and Europe to remain idled thru at least the end of the year

Co expects Q3 adjusted EBITDA of approximately $115 mln, which excludes $53 mln from the December 24, 2018 fire at its Clairton coke making facility and estimated restructuring charges.

Co expects Q3 adjusted EPS of approx $(0.35) vs CapitalIQ consensus of $0.01.

Co says that the the positive flat-rolled steel market indicators experienced earlier this summer have softened after a brief recovery in steel selling prices. The impact of falling steel prices through Q2 combined with the impact of a larger than expected drop in scrap prices on market sentiment, is expected to negatively impact Flat-rolled earnings in 2H19.

As a result, co expects that two blast furnaces will remain idled through at least the end of the year. Based on the continued idling of two US blast furnaces and current demand forecasts, co now expects full year Flat-rolled shipments to be approximately 10.7 million tons.

In Europe, market conditions have continued to deteriorate, as the dislocation between steel selling prices and raw material costs continues to result in significant margin compression. Co does not expect to restart the currently idled blast furnace this year.

Co expects its Tubular segment to remain under pressure for the remainder of the year as market conditions have turned negative and import levels remain high.

Walgreens Boots Alliance (WBA) reported earnings on Tue 2 Apr 2019 (b/o)

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Walgreens Boots Alliance misses by $0.08, reports revs in-line; lowers FY19 EPS below consensus; provides update on Transformational Cost Management Program

• Reports Q2 (Feb) earnings of $1.64 per share, $0.08 worse than the S&P Capital IQ Consensus of $1.72; revenues rose 4.6% year/year to $34.53 bln vs the $34.57 bln S&P Capital IQ Consensus.
• Co issues downside guidance for FY19, sees EPS of ~flat yr/yr from $6.02 in FY18, plus $0.04 of FX headwinds, which equates to $5.98 vs. $6.38 S&P Capital IQ Consensus.
  • Fiscal 2019 adjusted EPS growth expected to be roughly flat at constant currency rates, compared with previous guidance of 7 percent to 12 percent growth
• Long-Term Business Model
  • The company confirmed its existing transformation priorities and announced it will be taking immediate action to reinforce and accelerate them. With these actions, the company's business model aims to deliver improved performance in 2020, and mid-to-high single-digit growth in adjusted EPS, at constant currency rates, in the following years.
• Transformational Cost Management Program
  • The company's global cost review, scheduled for completion by the end of April 2019, has provided sufficient visibility to increase the annual cost savings target from the transformational cost management program from in excess of $1 billion to in excess of $1.5 billion by fiscal 2022. The program includes divisional optimization initiatives, global smart spending, global smart organization and digitalization of the enterprise to transform long-term capabilities.
  • During the second quarter and since the quarter ended, the company has taken decisive steps to reduce costs in the UK and to optimize the field management structure in the U.S.
  • The company continues to anticipate that aspects of such initiatives will result in significant restructuring and other special charges as they are implemented. The company has recognized cumulative pre-tax charges of $179 million for the six months ended February 28, 2019. These charges primarily relate to the Pharmaceutical Wholesale and Retail Pharmacy International divisions.

=Ford Motor (F) sees Q4 EPS below consensus

Ford Motor sees Q4 EPS below consensus

• Co issues downside guidance for Q4 (Dec), sees adjusted EPS of $0.30 vs. $0.33 S&P Capital IQ Consensus.
• 2018 results also will include the impact of a non-cash pre-tax remeasurement loss of $877 million related to the year-end revaluation of global pension and other postretirement employee benefits plans, also known as pension mark-to-market adjustment.
• The company strategy centers on high-growth product segments, electrified propulsion, autonomous vehicles, mobility services, operational fitness, and high-performance culture.
• "We are now beginning to see the results of our capital shift away from traditional sedans to trucks and SUVs with new utility nameplates globally, including Territory in China, Bronco, and a slightly smaller, yet-to-be named off-roader in North America."
• North America: In the next 24 months, Ford is refreshing 75% of its lineup, fortifying the company's successful truck franchise and renewing and expanding the range of SUVs.

-=Macy's (M) cuts profit, sales forecast after weak holiday season

• Macy's lowered its net sales, comparable store sales, and EPS forecasts for fiscal 2018. 
• Macy's stock suffered its biggest one-day drop since going public 27 years ago. 

(Reuters) - Macy's Inc (M) shares plunged 18 percent on Thursday after the department store operator slashed its full-year profit and sales forecast on the back of an anemic holiday season, sending a chill through the wider retail sector.

Macy's said its sales slowed after a good start to the holidays, and flagged particular weakness in women's sportswear, sleepwear, fashion jewelry, fashion watches and cosmetics. Its comparable sales over the critical November and December months rose 1.1 percent.

Department stores in recent quarters had shown signs they were finding ways to cope with declining mall traffic and tough competition from online seller Amazon.com Inc (AMZN). A robust economy and strong consumer spending had been expected to offer further relief.

Kohl's Corp (KSS) reported similarly muted comparable sales growth for the holidays, sending its shares down as much as 9 percent. Target Corp (TGT) was down nearly 4 percent even after the retailer posted relatively strong holiday sales growth of nearly 6 percent.

Those results come as overall sales for the 2018 U.S. holiday shopping season hit a six-year high as shoppers were encouraged by early discounts, according to a Mastercard report in late December. But some are already calling for an industry-wide slowdown this year.

"It looks like the consumer is in good shape but generally there are signs of some slowing in the economy," said Ken Perkins, founder of research firm Retail Metrics.

Consumer confidence in 2019 is seen as likely to be strained by rising U.S. interest rates, the ongoing trade spat with China, market volatility due to concerns over global growth and political deadlock in Washington.

A recession could hit many department stores particularly hard, some industry watchers said.

"If we do get a recession, the retailers that can offer strong value in both physical bricks-and-mortar format, as well as a good online experience will do best," said Jeff Yastine, senior equities analyst at investment advisory firm Banyan Hill Publishing.

"That leaves many department store chains, like Macy's, on the outside of this trend until they can figure out how to marry 'luxury' with the convenience of online retail that consumers want," he said.

FORECAST CUTS

Macy's now expects 2 percent growth in comparable sales for the full year, down from a previous outlook of 2.3 percent to 2.5 percent growth. Its comparable sales, including licensed departments, rose 1.1 percent during November and December.

The retailer is now calling for diluted earnings per share of $3.95 to $4.00 for fiscal 2018, excluding settlement charges, impairment and other costs. Its previous guidance issued in November called for EPS of $4.10 to $4.30.

"The holiday season began strong - particularly during Black Friday and the following Cyber week, but weakened during the mid-December period and did not return to expected patterns until the week of Christmas," Jeff Gennette, chairman and chief executive officer at Macy's, said in a statement.

The retailer has reported four consecutive quarters of same-store sales growth, and its shares had risen more than 80 percent over a 12-month period heading into Thanksgiving.

Kohl's reported comparable sales growth of 1.2 percent during the final two months of 2018, down sharply from 6.9 percent a year earlier.

Target was a bright spot with comparable sales growth of 5.7 percent during November and December, up from growth of 3.4 percent in the same period last year, but its performance on Thursday was overshadowed by its rivals.

Target said its sales were helped by higher customer visits and strong online sales during the holiday season, as well as strength in with toys, baby and seasonal gifts. It expects same-store sales growth of about 5 percent for the fourth quarter through January.

Target reaffirmed its full-year earnings and sales forecast, putting it on track for its fastest full-year comparable sales growth since 2005.

=Constellation Brands (STZ) reported earnings on Wed 9 Jan 2019 (b/o)

Constellation Brands beats by $0.29, beats on revs; lowers FY19 EPS below consensus on lower wine and spirits outlook

• Reports Q3 (Nov) earnings of $2.37 per share, excluding non-recurring items, $0.29 better than the S&P Capital IQ Consensus of $2.08; revenues rose 9.5% year/year to $1.97 bln vs the $1.91 bln S&P Capital IQ Consensus.
  • Beer: The Modelo and Corona brand families drove depletion growth of 8%, with the Constellation beer business achieving the most significant share gains in the U.S. beer industry for the third quarter.
  • Wine and sprits: Depletion performance for the below $11 price point continues to be challenged, resulting in an overall fiscal year-to-date depletion decline of 2%.
• Co issues downside guidance for FY19, sees EPS of $9.20-9.30 vs. $9.44 S&P Capital IQ Consensus. Affirms fiscal 2019 operating cash flow target of approximately $2.45 billion and free cash flow projection of $1.2 - $1.3 billion. The beer business now expects fiscal 2019 net sales growth to be at the high end of the 9 - 11% range and operating margin to approximate 39%. The wine and spirits business now expects net sales and operating income to decline low-single digits for fiscal 2019, down from +2-4% growth last quarter.

=Flexion Therapeutics (FLXN) : weak revenue guidance

• Flexion Therapeutics released preliminary fourth-quarter revenue and guidance for 2019. The company said it expects fourth-quarter revenue of $9.5 million and full-year revenue of $22.5 million. Wall Street analysts polled by FactSet expected sales of $10.2 million for the quarter and $23.1 million for the year. The company also said it expects $65 million to $80 million of product revenue for 2019, while analysts modeled revenue of $97.8 million.

Flexion Therapeutics sees Q4 and FY19 revenue below consensus as Zilretta ramps

Sees Q4 revs +36% Q/Q to $9.5 mln vs $10.16 mln S&P Capital IQ Consensus; Total revenue for the full-year 2018 is estimated to be $22.5 million.

Flexion anticipates 2019 ZILRETTA product revenue $65-80 mln vs. $97.8 mln consensus.

"2018 was a foundational year for ZILRETTA, and in the first full year of the launch, we saw strong product uptake as we established a broad and growing base of prescribers. Furthermore, the clinical feedback on ZILRETTA from physicians and patients alike continues to be overwhelmingly positive and gratifying," said Michael Clayman, M.D., President and Chief Executive Officer. "We now enter 2019 with a product-specific J code (J3304), which we believe will be a key driver of continued ramp, as it provides prescribers with a well-known and clearly defined reimbursement mechanism that is utilized by both Medicare and private payers. Each year, roughly five million people in the U.S. receive intra-articular injections for osteoarthritis knee pain, and we believe ZILRETTA will play an increasingly significant role in the treatment paradigm for this large and growing patient population."

=Apple (AAPL) cuts its revenue guidance for the first time since 2002

• Apple lowered its Q1 fiscal revenue guidance to $84 billion from the previously forecast range of $89-$93 billion. CEO Tim Cook, in a CNBC interview, said the shortfall is solely due to weaker-than-expected iPhone revenue, primarily in Greater China. Mr. Cook added that he believes trade tensions between the United States and China have put additional pressure on China's economy. 
• The lowered outlook from the company that is known for beating expectations was attributed to weak demand in China. The cautious outlook suggests that the tech industry in general is facing a slowdown. Recall that Micron (MU 31.10, -1.65) lowered its guidance in mid-December while NVIDIA (NVDA 129.22, -7.00) cut its guidance in November. Meanwhile, Korean press reported overnight that Samsung will look to reduce its chip inventory amid a supply glut.

-=Lumentum (LITE) lowers Q2 guidance based on reduced shipments of its 3D sensing lasers

• Lumentum (LITE) cuts Q2 guidance based on what seems like reduced shipments for its 3D sensing lasers, a key component for Face ID in the iPhone , noting "We recently received a request from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter."

• Lowers Q2 EPS to $1.15-1.34 from $1.60-1.75 vs $1.67 S&P Capital IQ Consensus; revs to $335-355 mln from $405-430 mln vs $420.47 mln S&P Capital IQ Consensus
• "We recently received a request from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter," said Alan Lowe, President and CEO. "With our proven ability to deliver high volumes, years of experience, hundreds of millions of devices in the field, and new product and customer funnel, we remain confident in our leadership position in the nascent market for laser diodes for 3D sensing."
• Note the customer is likely Apple (AAPL), which seems to confirm shipment cuts reported by Nikkei last Monday.
• Lumentum is the main supplier for vertical-cavity surface-emitting lasers (VCSELs), which enable 3D sensing (Face ID) technology in Apple's (AAPL -2.8%) iPhone. This jives with what the Nikkei reported one week ago, that Apple had recently cut orders for the iPhone XR and increased orders for the iPhone 8 and 8 Plus. The iPhone XR is the newest lower cost option while the 8/8+ are last year's cheaper models without 3D sensing/Face ID capability.
• Recall Apple offered soft guidance for the holiday quarter on November 1 while announcing it will no longer disclose product shipment disclosures going forward. Apple is using higher priced iPhones to drive growth in a stagnant/saturated smartphone market where the replacement cycle is getting longer. Bernstein said Apple's guidance implied shipments down 5-10% year-over-year.
• The number two and three VCSEL suppliers II-VI (IIVI -2.7%) and Finisar (FNSR -3.4%) announced a merger on Friday morning.

=Michael Kors (KORS) reported earnings on Wed 7 Nov 2018 (b/o)

Michael Kors beats by $0.17, reports revs in-line; guides Q3 EPS below consensus, revs below consensus; guides FY19 EPS in-line, reaffirms FY19 revs guidance

• Reports Q2 (Sep) earnings of $1.27 per share, excluding non-recurring items, $0.17 better than the S&P Capital IQ Consensus of $1.10; revenues rose 9.3% year/year to $1.25 bln vs the $1.26 bln S&P Capital IQ Consensus.
  • Adjusted gross profit was $765.4 million and adjusted gross margin was 61.0%, compared to $690.8 million and 60.2% in the prior year.
  • Michael Kors Retail revenue of $643.9 million was approximately flat compared to the prior year. Comparable store sales decreased 2.1%. On a constant currency basis, comparable store sales decreased 1.3%.
    • Michael Kors Wholesale revenue declined 1.3% to $457.8 million compared to the prior year.
    • Michael Kors Licensing revenue decreased 6.8% to $35.4 million compared to the prior year.
  • Jimmy Choo revenue was $116.7 million.
• Co issues downside guidance for Q3, sees EPS of $1.52-1.57 vs. $1.82 S&P Capital IQ Consensus; sees Q3 revs of ~$1.46 bln vs. $1.48 bln S&P Capital IQ Consensus.
  • The Company expects third quarter retail revenue for Michael Kors to grow in the low single digits.
  • The Company expects wholesale revenue to decrease in the high single digits, and licensing revenue to decline in the mid-teens.
• Co issues guidance for FY19, sees EPS of $4.95-5.05, excluding non-recurring items, vs. $5.02 S&P Capital IQ Consensus; reaffirms FY19 revs guidance of ~$5.125 bln vs. $5.14 bln S&P Capital IQ Consensus.
  • Reported comparable store sales for Michael Kors is expected to be down in the low single digits (vs previous guidance of flat comps), primarily driven by an unfavorable currency impact.
  • The Company has raised guidance for operating margin to approximately 18.2%.

=Coty (COTY) reported earnings on Tue 21 Aug 18 (b/o)

Coty beats by $0.01, reports revs in-line; guides FY19 EPS below consensus 
Nearly two years after Coty Inc. paid $12 billion to acquire Procter & Gamble Co.’s beauty business, the deal remains a drag on the struggling beauty giant. Weak performance of former P&G brands, including names like CoverGirl makeup and Clairol hair dye, drove down sales in the most recent quarter, Coty said Tuesday. A trucker strike in Brazil also contributed to a loss of $181.3 million, or 24 cents a share, compared with a loss of $304.8 million a year ago.

• Reports Q4 (Jun) earnings of $0.14 per share, $0.01 better than the S&P Capital IQ Consensus of $0.13; revenues rose 2.6% year/year to $2.3 bln vs the $2.31 bln S&P Capital IQ Consensus.
• Co issues downside guidance for FY19, sees EPS of 0.74-0.78 vs. $0.81 S&P Capital IQ Consensus.
• Commentary on Outlook:
  • For FY19, co is targeting well over 100 bps of adjusted operating margin expansion, which, combined with our target of flat to modest LFL net revenue growth would deliver mid-teens adjusted operating income growth.
  • FY19 EPS target of $0.74 - 0.78 is fully consistent with this level of adjusted operating income growth.
  • Financial performance across quarters in FY19 will not be linear. The peak of the impact of the supply chain disruptions due to our logistics and manufacturing consolidation will come in 1Q19, with a smaller tail end in 2Q19. This will have a significant impact on both top and bottom line, and together with the impact of our brand rationalization program, is expected to drive a low teens decline in our 1Q19 adjusted operating income year over year.
  • Having said that, co does not expect that these business integration related impacts will be largely over by the end of first half 2019 and FY19 targets take these disruptions into consideration.

Coty CFO Patrice de Talhout resigns to pursue other opportunities
Patrice will remain CFO through mid September 2018 and assist with transition thereafter. Coty is retaining an executive search firm to conduct a search for a successor.

-=Starbucks (SBUX) lowers its earnings guidance for FY18

• Starbucks details three strategic priorities - taking decisive steps to address anticipated Q3 comps of 1%; lowers FY18 EPS guidance

Starbucks details three strategic priorities - taking decisive steps to address anticipated Q3 comps of 1% 

• Starbucks details three strategic priorities to regain revenue and earnings momentum: Accelerating growth in the U.S. and China, the company's targeted long-term growth markets; Expanding and leveraging the global reach of the brand through the Global Coffee Alliance; and Sharpening the focus on increasing shareholder returns.
• With the execution of the company's strategic priorities expected to improve the return profile of the business, the company now expects to return approximately $25 billion in cash to shareholders in the form of share buybacks and dividendsthrough FY20. This represents a $10 billion increase from the cash return target announced on November 2, 2017. Co increases quarterly dividend to $0.36/share from $0.30/share.
• The company is actively exploring strategic options to license company-operated stores in other appropriate markets.

-=Taiwan Semi (TSM) reported earnings on Thur 19 Apr 2018 (b/o)

Taiwan Semi misses by $0.02, misses on revs; guides Q2 revs below consensus 

• Reports Q1 (Mar) earnings of $3.46 per share, $0.02 worse than the Capital IQ Consensus of $3.48; revenues rose 6.1% year/year to $248.08 bln vs the $250.89 bln Capital IQ Consensus.
  • In US dollars, first quarter revenue was $8.46 billion, which decreased 8.2% from the previous quarter but increased 12.7% year-over-year.
  • Gross margin for the quarter was 50.3%, operating margin was 39%, and net profit margin was 36.2%.
  • In the first quarter, shipments of 10-nanometer accounted for 19% of total wafer revenue; 16/20-nanometer process technology accounted for 22% of total wafer revenue; and advanced technologies, defined as 28-nanometer and more advanced technologies, accounted for 61% of total wafer revenue.
• Co issues downside guidance for Q2, sees Q2 revs of $7.8-7.9 bln vs. $8.79 bln Capital IQ Consensus Estimate.
  • Additional outlook metrics
    • Gross profit margin is expected to be between 47% and 49%;
    • Operating profit margin is expected to be between 35% and 37%.
    • The management raised expectations of 2018 capital budget to be between $11.5-$12 billion, compared to prior outlook of capital budget to be between $10.5-$11 billion

Bed Bath & Beyond (BBBY) reported earnings on Wed 12 Apr 2018 (b/o)

• (before earnings) Forward Dividend & Yield 0.60 (2.79%)

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** charts after earnings **

 

Bed Bath & Beyond beats by $0.07, reports revs in-line; guides FY19 EPS below consensus; raises quarterly dividend 6.7% to $0.16/share 

• Reports Q4 (Feb) earnings of $1.48 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus of $1.41; revenues rose 5.1% year/year to $3.72 bln vs the $3.68 bln Capital IQ Consensus. 
• Comparable sales in Q4 (14 weeks) decreased by ~0.6% vs. ests near -2%, and included strong sales growth from the Company's customer-facing digital channels, and sales from stores that declined in the mid-single-digit percentage range.
• Co issues downside guidance for FY19, sees EPS of low-to-mid $2 range vs. $2.78 Capital IQ Consensus Estimate. Co will guide sales guidance on the call.
• The co repurchased ~$45 million of its common stock, representing ~2 million shares, under its existing $2.5 billion share repurchase program.
• As a reflection of the long-term health of the business, and commitment to creating shareholder value, the Company's Board of Directors today declared an increase in the quarterly dividend to $0.16 per share from $0.15.

=GoPro (GPRO) lowers Q4 revenue forecast, cuts more than 250 jobs

(Reuters) - GoPro Inc said on Monday it expects fourth-quarter revenue to fall below its earlier forecast and lowered the price of its Hero6 cameras due to weak demand, and the action camera-maker also said it would cut more than 250 jobs.

GoPro, whose cameras and drones are mostly used by sports junkies and travel enthusiasts, cut the price of its Hero6 cameras to $399 from $499 and said that would hurt revenue by around $80 million in the current quarter.

The company now expects fourth-quarter revenue of $340 million, compared with its projection of $470 million, plus or minus $10 million, in November.

GoPro, once a Wall-Street favorite, has been facing a decline in demand for its cameras and karma drones for several quarters, including for its Hero5 cameras in the latest holiday season.

"Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier," Chief Executive Nicholas Woodman said in a statement.

Morgan Stanley said in a research note earlier Monday that the price cut for the Hero6 camera would make earnings growth difficult in fiscal 2018.

GoPro said it would lower its workforce to fewer than 1,000 employees from 1,254 currently. It expects a restructuring charge of $23 million to $33 million, including about $13 million to $18 million for the job cuts, in the first quarter.

TechCrunch said last week that GoPro cut 200-300 jobs from its aerial division, which makes the Karma drones.

=Amplify Snack Brands (BETR) reported earnings on Tue 7 Nov 2017 (a/h)

Amplify Snack Brands misses by $0.02, misses on revs; lowers FY17 EPS, revs guidance 

• Reports Q3 (Sep) earnings of $0.07 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus of $0.09; revenues rose 39.5% year/year to $94.86 mln vs the $97.7 mln Capital IQ Consensus.
• Gross profit was $35.9 million for the 13 weeks ended September 30, 2017, or 37.9% of net sales, compared to $32.3 million, or 47.6% of net sales for the three months ended September 30, 2016. The decrease in gross margin percentage for the 13 weeks ended September 30, 2017 was primarily due to the acquisition of Tyrrells, increased promotional activity and to a lesser extent increased net sales mix from the Oatmega and Paqui brands and new SkinnyPop innovation, all of which have lower gross margin profiles than the SkinnyPop ready-to-eat products.
• Co lowers guidance for FY17, sees EPS of $0.25-0.27 (Prior $0.35-0.43), excluding non-recurring items, vs. $0.33 Capital IQ Consensus Estimate; sees FY17 revs of $375-379 mln (Prior $385-400 mln) vs. $386.97 mln Capital IQ Consensus Estimate.