Big Beats in BBY and AFRM, DG and BIRK Shares Slide

it. If the tech keeps improving because now Nasdaq is leading almost up a percent Diane King Hall is with us from New York taking a look at some of the other names. Let's talk some Best Buy. Diane. Maybe people are going to buy new phones after all. I mean, you know, I've doubted that story, but it seems like these were good numbers. Yeah, it was good numbers across the board for Best Buy in terms of its both its top and bottom line. And it also shows that the turnaround plan that Best Buy has been working on is starting to work especially you're seeing now the execution of this refresh cycle. EPs was a buck 34 share. That was better than expected. Revenue came in at 9.29 billion. Now same store sales did fall 2.3%. But you compare that to the performance a year ago. And comps were down 6.2%. So you're seeing continued improvement in terms of what their comps look like. They've also increased their guidance off the back of their latest quarterly results. They're projecting adjusted EPs to come in in a range of between 610 to 6.35 a share. That's better than what the expectations are. The expectations and even the prior guidance, the prior guidance was between 575 to 620 a share. So that was again their previous guidance. So they beat again on both the top and the bottom line. And they're expected to see some continued improvement in terms of this refresh cycle that we're starting to see now following the pandemic. You had, again, you know, at the beginning of the pandemic, all these people buying electronics. So that boded well for Best Buy. But the refresh cycle is now finally starting to pick up for the company. And you're seeing shares soar right now. Very digits. Yeah, very important stuff. I think kind of a surprise, piece of information this morning that definitely was not like ranking top on our list of events for the week. But big move like this after, you know, a couple quarters of signs of improvement after a long time in which they were under a lot of pressure, you know, look at the five year chart here. This is kind of a novel thing for Best Buy to be really solidly trending up after several quarters. Agreed. But one thing that did come to mind, because it wasn't the top of my radar either. But one thing that popped in my mind is, again, that refresh cycle. Because when you think about durable goods, they last, what, 3 to 7 years. So it does make sense that we're starting to see this refresh cycle. It'll work well with, you know, as you mentioned, Apple releasing new devices. So that will bode well for Best Buy because consumers some need some want it will help Best Buy, especially heading into the holiday season. There's this kind of idea that the whole like PC trade is basically dead, but that seems to now be challenged because people were buying more computers than expected and tablets too. So they're willing to do that, then it seems like they're probably going to be willing to get that new phone when it comes out. You know, the thesis is basically been that the AI products don't even have to be that groundbreaking. So many people are holding on to like four year old phones. So maybe that thesis is looking better here. Yeah And look, Best Buy says they're expecting improvement in a variety of their verticals. Whether we're talking about computing appliance. ET cetera. They're also planning some new advertising campaigns to kind of help beef up, you know, beef up sales as well. All right. Good stuff. All right, on the flip side, Dollar General is getting hit. But to me, this is more, this is a little bit more industry specific. It's kind of a Walmart story in some ways. There's just been so much domination by the big names on discount stuff. And it's also hard for these companies to make money with inflation still sticking around. It's true. I mean, Dollar General talked about its cash strapped consumer off the back of its latest earnings report. They had just weakness across the board. Whether we're talking about the top or bottom line for Dollar General. And they really highlighted that challenging environment for their consumer. Adjusted EPs was a buck 70 a share. The expectation was a buck 79 a share. Revenue came in at 10.2 billion. Just about there. The expectation was closer to 10.4 billion. So both of those were amiss. Same store sales only increased a half of a percent. So you're seeing very, very slow growth there. They've also cut their expectations for the road ahead. They've cut their fiscal year sales growth view to between 4.7 to 5.3%. They previously saw that coming in in a range of between 6 and 6.7%. So they're really expecting, you know, a challenging road ahead. They also expect same store sales to only increase between 1 to 1.6%. Their previous guidance for that was between 2 to 2.7%. The CEO said, quote, while we believe the softer sales trends are partially attributable to a core customer who feels financially constrained, we know the importance of controlling what we can control. So Dollar General clearly sees, yes, they have a cash strapped consumer, but they also have to do something when it comes to cost controls and efficiency. Okay. So this is partly you know, this is partly customer related. It's partly Dollar General related. And, you know, I think if we have to choose for the market, which is going to have a bigger impact, dollar General or Best Buy, I'm going with Best Buy every day. There's just too much competition in the dollar store space. A lot of these companies have been struggling. I mean, even the ones that seem like they kind of had a better mousetrap, like a five below has just been getting destroyed now for a whole year. So. And they're up today too. So I do think part of this is like you kind of shift market cap over from these companies sometimes between like Dollar Tree, Dollar General five below, you know, and then Walmart ultimately gets a big chunk of that consumer anyway. So it's just I was yeah, exactly. I was just checking out Walmart. And while Dollar General is sliding dramatically Walmart is holding steady. It's getting a little bit of ground, you know. But look at a year to date that stock is up more than 40%. So if you want that exposure to the retail sector then you know you're going to go with a safer bet there. Especially when you think about Walmart is hitting metrics on not just the you know, lower income consumer, but all the way up to a six figure earner. Totally. All right, two other names here, affirm and Birkenstock. Birkenstock getting hit coming off highs, a firm rallying, trying to turn it around again. I think, sentiment wise, a firm's got a little bit more of a punch. It packs in the message. And then Birkenstock, which is, I mean, I don't know, I'm like the oldest shoes ever, right? Like don't we have a lot of other shoe companies doing really well too. They've been still in the mix. I guess they do have those like beachy ones though, that are pretty cool. Go ahead. I'm just going to quickly run through the numbers on Birkenstock, because I want to dig a little deeper into a firm. So adjusted EPs for Birkenstock came in at $0.53 a share. That was a miss. Revenue was 608 million. Also missed. Are you looking at shares down a little more than 12%. Revenue did grow in different regions. But again, I mean they grew 15% in Americas. Europe was better and Asia Pacific was better as well. But again, they missed on both the top and bottom line. But let's dive into a firm. A firm did a lot better than expected just across the board. Their loss was came in at $0.14 a share. On an adjusted basis. The expectation was a loss of $0.51 a share. Revenue came in at 659 million. That was also better than expected. And now what's working really well for a firm? They have said that now they are clearly on a path to profitability, and they see that by fiscal year 20, by the fourth quarter of fiscal 2025 for them. So it's clear that a firm is really, you know, moving in the right direction, and when you think about whether it's the interchange fees that they charge merchants, the consumer piece of their business, the firm is just doing better than expected on a variety of metrics. Another thing that it has that bodes well for a firm is that that partnership they announced with Apple, where the, you know, people will be able to, you know, work with them to get loans through a firm so that benefits the firm and then a firm is expanding its reach internationally, planning to launch in the UK by next year by early next year. Okay. Pretty good, pretty good message. You know, still one that I think still has some proving a little bit, but it's holding in. It's held up better than I think a lot of folks have expected. And to your point, the Apple connection really, really big to me, that's still like the biggest story here. And that's a really important reminder because the possibility that companies would do these, you know, processes on their own and build this infrastructure for, you know, the partial payments on their own was kind of a big threat to a firm. So that Apple deal probably going to bear some fruit for the next cycle too. So we kind of came full circle there, right, from best Buy to a firm because they're going to allow people to pay this in piecemeal, and the providers do too. Anyway So that's exactly what I was thinking when we were talking about Best Buy earlier. I was thinking that, you know, the benefit of a firm having all these different partnerships will play out as strengths for the company. And their numbers were better than, you know, better than expected across the board and an even better like than I expected because I've you know, I know we've talked about kind of the BNPL space there and concerns about what the consumer looks like there, but it looks like the affirm consumer is holding up. Yeah. All right, a killer quarter. The CEO said I'm not sure. I don