💰 Inflation is Finally Over! 🎉

🔮 Welcome back to Finsights, fellow financial wizard. We're here to spill the beans on the juiciest stock market scoop, breaking it down in a language even your pet goldfish would get!

• 🚨 Campbell’s Soup ($CPB) waives the inflation white flag

• 🚨 General Mills ($GIS) also waives the inflation white flag

• ��️ Bargain hunting is back in style, baby

Inflation is Dead. Finally!

🍲 Look no further than soup 1/ We all know Campbell’s – our favorite canned soup company that produces products that can survive an apocalypse. The company has been on a tear the last 2 years. Campbell’s reported earnings today and told us that they raised prices by a shocking +12% compared to last year! Despite the higher prices, consumers have barely pushed back... until now.

🍲 Look no further than soup 2/ Today, Campbell’s told us that “elasticities” have increased. In normal words, this means that if they try to raise prices any more, consumers simply stop buying their products. This quarter, volumes fell by -7% as consumers voted against their +12% price increase. This is a big win for consumers as we are finally telling companies that enough is enough! 🚫

🥣 Cereal too! / General Mills, the company behind Cheerios and Pillsbury said the same thing about not being able to raise prices anymore. Their price hikes are not only slowing down, but they are also raising promotions on their products. Buy 2 get 1 free anyone?

🚗 Used cars get hit / The leading used car index in the U.S., the Manheim Index, showed that used car prices fell by 2.7% in May compared to April. Have a clunker that you want to sell? Better sell it sooner rather than later!

The Finsight 🐻 📉: avoid companies that are overly reliant on raising prices. If consumers don’t buy more of their products (*cough* Campbell’s cough), business will suffer.

Bargain Hunting is Back in Style

🛍️ Want a good deal? / Ollie’s Bargain Outlet is down a bit today (-3%), but that does not hide the fact that business was, well, pretty good. The company posted same-store-sales of +4.5%, which is better than Wall Street’s expectations of +2.0%. The company said on their earnings call today that “customers are responding to our compelling deals, resulting in accelerating transaction trends.” As a result, the company raised its outlook for the full year.

💲💰 Dollar Store Galore / Up in Canada, Dollarama, Canada’s biggest dollar store chain, also posted strong results. Customers bought +15.5% more products than last year while prices rose by +1.4%. The company is keeping their outlook unchanged (code for being conservative), despite posting better than expected numbers.

Remember Costco? / Remember two days ago when we gave a Costco quote around customers buying cheaper protein like poultry and pork 🐔🐖 rather than the prime cuts of fillet? Yep, it’s all coming full circle now.

The Finsight 🐂 📈: embrace value. Look for companies like Walmart, dollar stores, Ollie’s, Five Below, and Burlington to do well in a period where customers prioritize value.

/ “Unlike crypto, I think AI is real...If [AI is] as big as I think it is, Nvidia is something we're going to want to own for at least two or three years. Not for 10 months.” - Legendary investor, Stan Druckenmiller

/ “Consumers are under pressure and are being cautious with discretionary spending” - Ollie’s Bargain Outlet, the eclectic store that sells a bunch of stuff on the cheap.

/ “[We are seeing] a significant and unexpected slowing in the wholesale commodity inflation, which created some additional unanticipated margin weakness.” - United Natural Foods ($UNFI), the private label manufacturer that might just be behind your favorite organic brands.

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Fin-specto Revelio!