Ralph Laughing All the Way to the Bank

🔮 Welcome back to Finsights, fellow financial wizard. Let’s get you up to speed on the market with a flick of your finger! 🪄

• 🕺Markets continue this weird dance

• 🐻 Economic data should ease the bears away for now

• 💰 Nvidia and Abercrombie yesterday, Ralph Lauren today!

📉 Market Blues - The US equity futures are playing Twister out there, one hand on the green, the other on the red. Nasdaq is throwing a party up 243 points. Meanwhile, S&P is slowly inching upwards, gaining 26 points, but the Dow ain't feeling the love, sliding down 70 points. Then you've got NVDA, up 24% pre-market to about $380 a pop. It's like they found a money tree in their backyard, adding $183B to their market cap. That's like they just woke up and found 1.5 Intels in their pocket. Across the pond, Eurozone is doing a little dance, rallying 10-30bp with the tech folks, particularly the semiconductors, popping, lockin', and droppin' it. Industries, basic resources, and healthcare are doing pretty good too. However, we got some wallflowers at this market party – staples, chemicals, media, retail, real estate, telecoms, and energy. The luxury folks are looking a bit red-faced, but they’re off the lows and not lagging too badly.

In Asia, it's like a bad game of roulette – mostly red with some green pockets. Hang Seng is down 1.93%, Shenzhen down 0.17%, Australia ASX 200 down 1.05%, India off by 15-20bp, and even Hong Kong/China sentiment seems to be getting a bit icy. But then there's Taiwan TAIEX, riding the NVDA wave, up 0.82%. Meanwhile, treasuries are acting all slippery, yields flat-to-up 4bp. The market is predicting a year-end Funds Rate of 4.85%, like it's throwing darts in the dark. The DXY is on a winning streak, rising another 18bp. Brent is doing a nosedive, falling 100bp cause Russia had to be a party pooper on talk of incremental OPEC+ production cuts. Bitcoin is off 60bp to $26.24K while gold is stepping up, rising 18bp. 🎢

💵 What’s Happening? - Now, NVDA's blow-out results/guidance is stealing the show this morning. And while it's making some noise, that's mainly a company-specific phenomenon. There are some other big earnings news from ELF, GES, NTNX, and SPLK while AEO and SNOW ain't looking so hot. Some headlines are buzzing about "US credit rating put on negative watch by Fitch" and "Germany falls into recession", but let's not get carried away, they're just clickbait. The debt ceiling situation is like a broken record, playing the same tune as yesterday, with a little sprinkle of optimism here and there but with a big fat divide still standing between the two sides. So, keep your eyes peeled for Washington (expect more ceiling meetings and more play-by-play coverage), economic data (especially the weekly claims at 8:30AM ET), and earnings from BBY, BURL, DLTR, MDT, and RL to start, followed by ADSK, COST, DECK, GPS, MRVL, RH, ULTA, and WDAY after the closing bell.

🔍 Economic Growth Data – The data was bullish like a rodeo 🐂 - we're talking a drop in weekly claims (smells like a lot of that recent increase was just fraud) and a nudge up in Q1 GDP (from +1.1% to +1.3%). But hold up, the flip side's a bit sour - inflation's up as Q1 PCE was revised higher (core now at +5% vs. +4.9% before). These digits are giving more ammo to those at the Fed hollerin' for more hikes. ⬆️💰

Though we still think the Fed's gonna play hard to get on rate increases, especially for June. The market's already chucked a good chunk of the H2 rate cuts it was eyeing before, thanks to reduced bank worries and stronger growth/earnings.

💲 DLTR (Dollar Tree), the penny-pinching guru, faces a stumble with a large EPS miss at 1.47 (falling short of the Street's estimate of 1.54). To add to the challenge, DLTR slashes its EPS guidance, with FQ2 EPS projected at 84c (well below the Street's 1.27). The mix of products, leaning toward consumables with lower margins, and the pesky issue of shrink (yes, theft) are causing headaches. Despite the hurdles, DLTR showcases solid sales performance, boasting overall comps of +4.8% (surpassing the Street's +3.5%). While there may be bumps on the road, DLTR's focus on transformation initiatives and upcoming analyst meeting on June 21 provide hope for a brighter future. Keep an eye on the checkout line! 💲💥

👕 RL (Ralph Lauren), the fashion virtuoso that sets the trends and keeps us looking sharp, delivers an impressive performance in FQ4. With EPS of 90c (a staggering 50% higher than the Street's forecast of 60c) and revenue surpassing expectations at $1.54B (compared to the Street's $1.466B), RL proves its enduring appeal in the global market. The Asian market steals the show with a remarkable 29% surge in revenue (including an impressive >40% growth in China), while Europe showcases solid growth of 7%. Meanwhile, North America falls slightly behind. Adjusted gross margins of 63% and well-controlled operating expenses contribute to RL's financial strength. Looking ahead, RL anticipates constant currency revenue growth of 1-3% for F24, with expectations of margin outperformance. Dress to impress, because RL is making waves on the global runway! 👕🌟

🐻 BBW (Build-a-Bear), the whimsical wonderland where furry dreams come alive! Despite a modest revenue and EBITDA shortfall, BBW didn't let that dampen its creative spirit. In a delightful twist, their EPS triumphed, surprising the Street with a cheerful 98c (beating the anticipated 95c). The bears may be building dreams, but BBW's gross margins also built excitement, leaping +160 basis points year-over-year. While challenges may arise, BBW's resilient spirit shines through as they confidently reiterate their annual guidance. 🎈🧸

🏪 BBY (Best Buy), the ultimate haven for tech enthusiasts and savvy shoppers, are facing a -10.1% decline in comps, but BBY's tech prowess still managed to deliver a pleasant surprise. With a few extra cents tucked under its belt, BBY's EPS soared to a remarkable 1.15 (outpacing the expected 1.11). Amidst a landscape of caution and tradeoffs, BBY showcased strong operational execution, surpassing expectations for profitability. As they navigate the twists and turns of an ever-changing market, BBY keeps its sights set on resilience and customer satisfaction. 🚀💻

🛍️ BURL (Burlington), the treasure trove of fashion delights that promises excitement with every aisle fell slightly short on EPS at 84c (compared to the Street's estimate of 92c) and comps missed the mark at +4% (versus the Street's +5.7%), BURL quickly rebounded with a fashion-forward comeback in April. BURL attributes the momentary setback to external factors like lower tax refunds and unseasonably cooler weather before Easter. However, their style-savvy ship is back on course, as they confidently reiterate their guidance for the year. While the FQ2 outlook may seem softer than a cashmere sweater, with EPS expected at 40c (compared to the Street's 70c), BURL remains poised to capture the hearts of fashion enthusiasts. 👗👠🛒

👞 GCO (Genesco), the place where footwear fantasies meet their stylish match, stumbled upon a significant EPS miss, clocking in at (1.59) (versus the Street's estimate of (1.10)). But fear not, for GCO swiftly stepped up to tackle the challenge head-on. They're taking bold strides, such as closing underperforming Journeys stores, implementing cost-cutting measures, and refining their product assortment. As they navigate the twists and turns of the marketplace, GCO remains determined to put its best foot forward. 👞💫

💼 MET (MetLife), the financial powerhouse that keeps dreams within reach, strikes a reinsurance deal with General Atlantic, reinsuring approximately $19.2B in U.S. retail life insurance and fixed annuity statutory reserves. This strategic move is expected to have a positive impact on several key financial metrics, including adjusted earnings per diluted share and the company's adjusted return on equity target of 13% to 15%. But that's not all—MET also flexes its financial muscle by adding $1B to its buyback authorization, demonstrating its commitment to rewarding shareholders and fortifying its position in the market.

🏥 MDT (Medtronic), the healthcare innovator that keeps hearts beating and lives thriving, delivers impressive results in FQ4. With EPS of 1.57 (beating the Street's estimate of 1.55) and revenue reaching $8.544B (outpacing the Street's forecast of $8.25B), MDT shows its strength in driving growth. The organic revenue growth of +5.6% reflects the recovery in procedure volumes, supply improvements, and the introduction of innovative products. As markets continue to rebound, MDT is primed to capitalize on its competitive positions and a pipeline of groundbreaking solutions. With cost reduction measures in place and a focus on long-term growth, MDT seems committed to stakeholders. 🩺💪

🚜 TITN (Titan Machinery), the unstoppable force in the industrial landscape, revs up its engine with solid EPS upside of 1.19 (beating the Street's estimate of 1.02). While revenue tracks closely in line at around $570MM, TITN remains steadfast in its guidance for the year. TITN's first-quarter performance supports the company's earlier projections, reinforcing their confidence in the fiscal year ahead. With strong demand across all three operating segments, TITN acknowledges that some quarters may experience fluctuations due to the timing of equipment shipments and supply chain challenges. Buckle up for an exciting journey, because TITN is in the driver's seat! 🚜💥

🌯 Wrap for earnings. Have a fantastic day! 🌯

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Fin-specto Revelio!