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Tuesday June 19, 2018



Dave & Buster's Reports Boost in Revenue

Dave & Buster's Entertainment, Inc. (PLAY) announced its first quarter earnings on Tuesday, June 6. The company reported increased revenue and earnings that surpassed analysts' expectations.

Dave & Buster's reported quarterly revenue of $304.1 million. This was up 16.1% from last year's first quarter revenue of $262.0 million and surpassed the $ 299.6 million in revenue that analysts predicted.

"We have grown Dave & Buster's footprint by more than 14% over the last 12 months," said Dave & Buster's CEO Steve King. "This unit expansion combined with a 2.2% increase in comparable store sales drove 16% revenue growth during our first quarter this year. Our non-comp store base is performing well and we are very pleased with our 2017 store openings."

Dave & Buster's announced that adjusted earnings per share for the first quarter were $0.87 per share compared to $0.72 per share a year ago. This beat Wall Street's earnings estimate of $0.81 per share.

The entertainment and dining company has opened seven new locations this year and announced on Tuesday that it will be opening five more before the year is up. Currently, Dave & Buster's has locations in 34 states and Canada and hopes to continue growing. The company also made headlines this week after Pittsburgh Steelers head coach Mike Tomlin surprised his players by canceling a training session and taking the team to Dave & Buster's for some team bonding. Rookie quarterback Josh Dobbs enjoyed the day, stating, "It was cool just to come out, have fun at Dave & Buster's and get a chance to be around the different guys and enjoy some time together."

Dave & Buster's Entertainment, Inc. (PLAY) shares ended the week at $68.90, virtually unchanged for the week.

Smucker's Earnings Beat Estimates

The J. M. Smucker Company (SJM) announced its quarterly and year-end earnings on Thursday, June 8. The company's quarterly earnings exceeded Wall Street expectations, but fell short of last year's numbers.

The company reported net sales of $1.78 billion for the quarter, down 1% from the previous year's $1.80 billion, but ahead of analysts' estimates. For the full year, the company reported $7.4 billion in net sales, down 5% from $7.8 billion during the previous year.

"In fiscal 2017, we grew adjusted eps by 7% over the prior year," said Smucker's CEO Mark Smucker. "In the new fiscal year, we continue to execute our strategic plan for sustainable long-term growth by capitalizing on changes in consumer preferences and the retail environment."

Smucker's net income for the quarter was $110.4 million, down nearly 42% from $191 million during the same quarter last year. For the full year, net income was $592.3 million, a decrease of 14% from the prior year.

In addition to its namesake brand of fruit spreads, The J. M. Smucker Company includes such brands as Folgers, Dunkin Donuts retail coffee, Pillsbury, Knott's Berry Farm, Milk Bone and Meow Mix. The company's retail coffee segment saw a 14% drop in profits, while pet food profits fell 15%. The retail consumer foods segment, however, saw a 19% increase in profits from the prior year.

The J. M. Smucker Company (SJM) shares ended the week at $127.16, down 2.6% for the week.

HD Supply Stocks Fall after Sale Announcement

HD Supply Holdings, Inc. (HDS) released its latest quarterly earnings report on Tuesday, June 6. The company reported increased sales and profits.

Net sales for the quarter totaled $1.87 billion. This was an increase of 5.2% from $1.78 billion at this time last year.

"This is a significant moment in time for HD Supply as we simplify our business mix and accelerate our focus on next generation growth and innovation," said HD Supply Chairman, President and CEO Joe DeAngelo. "We continue to strategically evolve as we extend our customer-centric service differentiation."

The company reported net income of $85 million for the quarter. During the same quarter last year, HD Supply reported a net loss of $14 million.

HD Supply also announced on Tuesday that it plans to sell one of its major business units. The company has agreed to sell HD Supply Waterworks to private investment firm Clayton, Dubilier & Rice for $2.5 billion in a deal expected to close during the company's fiscal third quarter. HD Supply Waterworks is one of the company's three leading business, along with HD Supply Facilities Maintenances and HD Supply Construction & Industrial - White Cap.

HD Supply Holdings, Inc (HDS) shares ended the week at $31.51, down 24% for the week.

The Dow started the week of 6/5 at 21,195 and closed at 21,272 on 6/9. The S&P 500 started the week at 2,438 and closed at 2,432. The NASDAQ started the week at 6,305 and closed at 6,207.

Treasury Yields Rise During Eventful Week

Treasury yields were up to end the week following a number of high-profile market moving events on Thursday. Investors anxiously awaited Thursday's release from the European Central Bank (ECB), revelations from former FBI Director James Comey's congressional testimony and the results of the 2017 U.K. general election.

Thursday's ECB policy meeting revealed that the organization was standing pat on interest rates. This meeting comes just one week ahead of the Federal Open Market Committee's June meeting. The Fed is widely expected to raise interest rates next week.

The yield on the benchmark 10-year Treasury note opened the week at 2.15% on Monday, June 5. Late Thursday, yields rose slightly in response to Mr. Comey's testimony on Capitol Hill, closing at 2.19%.

"The market will start to concentrate on supply next week and the FOMC meeting, and start repricing," said Tom di Galoma, managing director of Treasurys at Seaport Global Securities. "You also have a lot of flight to quality buying that gets unwound that happened ahead of this Comey testimony and the U.K. elections."

The 10-year Treasury note rose slightly to 2.22% during early trading on Friday in the wake of the United Kingdom's snap election. The election, which did not go as British Prime Minister Theresa May had hoped, led to a hung parliament. Rather than strengthening the Conservative government, as May anticipated when she called for the election back in April, Thursday's vote leaves British leaders little time to form a working government ahead of the U.K. and E.U.'s Brexit negotiations, scheduled for later this month.

The 10-year Treasury note yield finished the week of 6/5 at 2.2%, while the 30-year Treasury note yield was 2.85%.

Mortgage Rates Fall

Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, June 8. The 30-year fixed rate mortgage fell for the fourth consecutive week.

The 30-year fixed rate mortgage averaged 3.89% this week. This is down from 3.94% this time last week. At this time last year, the 30-year fixed rate mortgage averaged 3.60%.

The 15-year fixed rate mortgage averaged 3.16% for the week. During this time last year, the 15-year fixed rate mortgage averaged 2.87%.

"The 10-year Treasury yield fell 3 basis points this week," said Freddie Mac Chief Economist Sean Becketti. "The 30-year mortgage rate moved in tandem with Treasury yields, falling 5 basis points to 3.89%. Mixed economic data and increasing uncertainty are continuing to push rates to the lowest levels in nearly seven months."

Based on published national averages, the money market account finished the week of 6/5 at 0.55%. The 1-year CD finished at 1.38%.

Published June 9, 2017
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