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Tuesday December 1, 2020

Finances

Finances
 

Best Buy Beats Earnings Expectations

Best Buy Co., Inc. (BBY) posted its latest quarterly earnings on Tuesday, November 24. The electronics retailer posted increases in both revenue and profit.

The company's quarterly revenue came in at $11.85 billion, up from $9.76 billion during the same quarter last year. This exceeded analysts' expected revenue of $11.00 billion.

"Today, we are once again reporting strong quarterly results in the midst of unprecedented times," said Best Buy CEO Corie Barry. "Our comparable sales grew a remarkable 23% as we leveraged our unique capabilities, including our supply chain expertise, flexible store operating model and ability to shift quickly to digital, to meet what is clearly elevated demand for products that help customers work, learn, cook, entertain and connect in their homes."

Best Buy reported $391 million in net earnings for the quarter. This was up from $293 million last year at this time.

The Minneapolis-based company reported strong comparable store sales increases during the quarter. The company's domestic online sales spiked, with a 173.7% increase during the third quarter. This far outpaced last year's third quarter domestic online sales increase of 15.0%. Best Buy's international comparable sales increased 27.3% during the quarter, up from a 1.9% decrease during the prior year's quarter.

Best Buy Co., Inc. (BBY) shares ended the week at $113.90, down 5.2% for the week.

Tiffany's Earnings Sparkle


Tiffany & Co. (TIF) posted its latest quarterly earnings on Tuesday, November 24. The jeweler's profits rose despite flat quarterly revenue.

The company's net sales reached $1.01 billion for the quarter. This was relatively unchanged from the same quarter last year.

"We had a strong third quarter both in sales on a relative basis and terrific results in profitability on an absolute basis, which speaks volumes about the enduring strength of the Tiffany brand and gives us confidence as we enter the important holiday season," said Alessandro Bogliolo, Tiffany's CEO. "I want to commend all our invaluable managers and extraordinary employees for the excellent results achieved in a very, very difficult environment."

Net earnings came in at $119.00 million during the quarter. This was up from $78.40 million in net earnings at this time last year.

The company's earnings were bolstered by a 30% sales increase in the Asia-Pacific region during the quarter. Comparable store sales rose 40% in the region during that period. Total sales in the Americas fell 16% during the quarter. Japan and Europe followed with 8% and 6% sales declines, respectively.

Tiffany & Co. (TIF) shares ended the week at $131.58, virtually unchanged for the week.

Dollar Tree's Earnings Grow


Dollar Tree, Inc. (DLTR) reported its third-quarter earnings on Tuesday, November 24. The American variety store chain reported increased net sales and income.

Net sales reached $6.18 billion during the quarter. This was up 7.5% from $5.75 billion in net sales last year at this time.

"I am incredibly proud of our team's efforts to continue serving customers effectively, while driving operational improvements in both banners through this dynamic retail environment," said Mike Witynski, President and CEO of Dollar Tree. "Dollar Tree delivered its strongest same-store sales performance in the past ten quarters, along with a 50 basis point improvement in operating margin."

The company posted net income of $330.00 million, up from $255.80 million during the same quarter last year.

Dollar Tree operates 15,606 stores throughout North America. In addition to the Dollar Tree brand, the company also runs Family Dollar stores, which it purchased in 2015. It projects 480 new store openings by the end of the fiscal year. In addition, 750 Family dollar stores will be renovated before the end of fiscal 2020.

Dollar Tree, Inc. (DLTR) shares ended the week at $111.73, up 16.7% for the week.

The Dow started the week of 11/23 at 29,333 and closed at 29,872 on 11/25. The S&P 500 started the week at 3,567 and closed at 3,630. The NASDAQ opened the week at 11,917 and closed at 12,094.
 

Treasury Yields Rise During Short Week

Yields on U.S. Treasury bonds rose slightly heading into the Thanksgiving holiday. Continued vaccine development pushed rates upward while increased jobless claims tempered the rise.

On Monday, AstraZeneca reported that its coronavirus vaccine is 70% to 90% effective. This follows recent news from Pfizer and Moderna that their coronavirus vaccines are 95% effective.

"I do think we'll have about 40 million doses of vaccine before the end of the . . . year," said CDC Director Robert Redfield. "That's enough to vaccinate 20 million people. But then it will continue through January and February and hopefully by March we'll start to see vaccine available for the general public."

The benchmark 10-year Treasury note yield was at 0.869% during trading on Wednesday, up from Monday's opening rate of 0.829%. The 30-year Treasury bond yield was at 1.606% on Wednesday, up from 1.523% on Monday.

On Wednesday, the Department of Labor released its weekly jobless claims report. The report showed 778,000 initial jobless claims for the week, up from 742,000 new claims. This exceeded analysts' expectation of 730,000 new claims for the week.

"While there is hope that a vaccine could start to be distributed by end of year, it doesn't change today's bleak reality," said AnnElizabeth Konkel of Indeed. "And in any vaccine scenario, a full economic recovery won't occur instantaneously."

The 10-year Treasury note yield closed at 0.88% on 11/25, while the 30-year Treasury bond yield was 1.62%.
 

Mortgage Rates Stay Put

Freddie Mac released its latest Primary Mortgage Market Survey on Wednesday, November 25. The report showed interest rates holding firm.

This week, the 30-year fixed rate mortgage averaged 2.72%, unchanged from last week's average. Last year at this time, the 30-year fixed rate mortgage averaged 3.68%.

The 15-year fixed rate mortgage averaged 2.28% this week, also unchanged from last week. At this time last year, the 15-year fixed rate mortgage averaged 3.15%.

"Mortgage rates remain at record lows and while that has fueled a refinance boom, it's been driven mainly by higher income borrowers. With about 20 million borrowers eligible to refinance, lower- and middle-income borrowers are leaving money on the table by not taking advantage of low rates," said Freddie Mac's Chief Economist Sam Khater. "On the homebuying side, demand continues to surge, and it has created a seller's market where inventory is at a record low and home prices are rising, beginning to offset the benefits of the low rates."

Based on published national averages for the week of 11/23, the national savings rate was 0.05%. The one-year CD finished at 0.17%

Published November 27, 2020
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