- Carbon Finance
- Posts
- ☕️ Starbucks Falls 12%
☕️ Starbucks Falls 12%
1) Starbucks Sales Drop 2) AMD Expects $4B in AI Chip Sales, 3) Hermès Leads In The Luxury Race and more!
Happy Wednesday!
If you’ve been enjoying my emails, please be sure to move the newsletter to your primary inbox, “star” this email, and drop a 1-word reply (like “thanks”).
Doing this ensures you’ll always receive my newsletter. Plus, it improves sender reputation so email providers like Gmail don’t send my newsletters to your junk folder.
Following this Friday’s send, the newsletter schedule will be changing!
I’ll be shifting back to a weekly release every Sunday, beginning May 12th.
I’m also be experimenting with a fresh format over the next few weeks that I think you’ll really enjoy. Stay tuned!
Some key data bites you should know:
McDonald’s $MCD saw global comparable sales increase 2% in Q1.
U.S. oil and gas deals hit a record $51B in Q1.
Roughly a third of all S&P 500 stock trades are now executed in the last 10 minutes of the session.
Robinhood $HOOD saw $81B in equity trading volume in February, it’s largest since November 2021.
Hertz $HZ is trying to sell all of its 30,000 Tesla EVs by the end of the year.
Domino’s $DPZ global retail sales grew 7.3% in Q1.
Amazon’s $AMZN Q1 net income tripled from a year ago.
Apollo $APO is accused of setting up a $20B human life wagering scheme.
Snapchat $SNAP Daily Active Users hits 422M in Q1 2024.
SoFi’s $SOFI total net revenue increased 37% to $645M in Q1.
In today’s newsletter:
☕️ Starbucks Sales Drop
💾 AMD Expects $4B in AI Chip Sales
👜 Hermès Leads In The Luxury Race
Let’s dive right in!
Not subscribed yet? Sign up today!
More people are making their coffee at home.
Starbucks stock plummeted 12% after hours last night following the release of its Q2 FY24 earnings results.
Here are some key numbers:
🔴 Earnings: $0.68 vs. $0.79 Est.
🔴 Revenue: $8.56B vs. $9.13B Est.
🔴 Global Same Store Sales: -4% vs. +1% Est.
The numbers speak for themselves. This was a quarter to forget for Starbucks.
Year over year, net revenue dipped by 2%, earnings dropped by 7%, and operating margin shrank by 140 basis points to 12.8%.
The most telling sign was the fall in comparable store sales across the board—a crucial metric that tracks consistent revenue across established locations.
Looking ahead, the outlook isn’t much brighter.
Starbucks anticipates low single-digit declines to flat comparable store growth for the full year 2024.
This forecast, combined with expected low single-digit revenue growth and stagnant operating margin and EPS, had investors running to the woods.
With the stock now hovering below $80 and trading at roughly 20x earnings, it’s not exactly “cheap,” especially given the flat earnings projection for this year.
However, it is trading at a discount compared to its historical 10-year median PE ratio of 31x, per YCharts.
The strength of Starbucks' brand and global presence will likely always bolster the stock price, adding a premium to the valuation.
So the question to ask now is can Starbucks reverse course and re-accelerate growth in the short term?
What happens when a stock that has surged over 75% in the last year meets or slightly beats expectations?
It often drops—and that's precisely what happened to AMD.
Shares fell about 7% following the release of their Q1 FY24 earnings, even though the numbers were good:
🟢 Earnings: $0.62 vs. $0.61 Est.
🟢 Revenue: $5.47B vs. $5.46B Est.
⚪️ Q2 Revenue Outlook: $5.7B vs. $5.7B Est.
Revenue grew 2% YoY, driven by strong performances in AMD’s data center and client segments, which offset slower growth in gaming and embedded segments.
CEO Lisa Su announced that AMD is on track to generate $4B from AI chip sales in 2024, an uptick from the $3.5B forecasted in January.
The company’s MI300 chip has already achieved over $1B in cumulative sales since its launch in Q4 2023.
Despite these positive indicators and a slight beat this quarter, along with a bullish outlook for AI chip sales, investors were expecting more, leading to the stock's decline in after hours trading.
The demand for those rare Birkin bags isn’t slowing down.
Hermès recently reported a robust 17% increase in first-quarter sales, reaching €3.8B.
Even more impressive — every geographical area Hermès operates in recorded double-digit growth.
Asia (excluding Japan) rose by 14%, Japan itself surged an exceptional 25%, the Americas increased by 12%, and Europe (excluding France) grew by 15%.
Driving this impressive revenue spike were primarily two segments: Leather Goods and Saddlery and Ready-to-Wear and Accessories.
These segments expanded by 20% and 16% YoY, respectively, and together they make up nearly 71% of Hermès’ total TTM revenue.
With these numbers, Hermès is winning in the luxury race.
In comparison, LVMH recently reported a modest first-quarter sales growth of 3%, and Kering, the parent company of Gucci, saw Q1 revenue decline 11%.
📚 Recommended Reading
Written by anonymous wall street investors and bankers, The Wall Street Rollup is the best place to find investing, finance, and M&A news that you can read within 5 minutes.
The writers of the Wall Street Rollup are on a mission to upgrade your 5 minute newsletter.
Sign up for free to get a 2x/week newsletter with all the stories you need to get ahead below👇
🗣️ CEO Skirmish. Facebook $META co-founder Dustin Moskovitz calls Tesla $TSLA “Enron,” with Elon Musk responding by calling him an idiot - YF
📱 iOS 18 Gen AI. Apple $AAPL is reengaging with OpenAI for potential iPhone generative AI features - BB
🎬 Media Shakeup. Paramount $PARA CEO Bob Bakish will be stepping down and replaced by three executives - CNBC
🇨🇳 Elon Secures A Win. Tesla $TSLA was given the green light to roll out FSD in China - WSJ
Notable Companies Reporting Earnings This Week:
Monday (4/29):
NXP Semiconductors $NXPI, Welltower $WELL, ON Semi $ON, MicroStrategy $MSTR, Domino’s Pizza $DPZ, SoFi $SOFI
Tuesday (4/30):
Amazon $AMZN, Eli Lilly $LLY, Coca-Cola $KO, AMD $AMD, McDonald’s $MCD, Stryker $SYK, Starbucks $SBUX, PayPal $PYPL, 3M $MMM, Super Micro $SMCI, Pinterest $PINS
Wednesday (5/1):
Mastercard $MA, Qualcomm $QCOM, Pfizer $PFE, ADP $ADP, CVS Health $CVS, DoorDash $DASH, Kraft Heinz $KHC
Thursday (5/2):
Apple $AAPL, Novo Nordisk $NVO, Linde $LIN, Coinbase $COIN, Block $SQ, DraftKings $DKNG
Friday (5/3):
Hershey $HSY, XPO $XPO
All of the companies that are reporting earnings next week can be viewed here.
📣 A Message From Our Sponsor
Make Your Money a Multitasker.
With Betterment's expert-built ETF portfolios, you’re automatically diversified across thousands of stocks and bonds at once. These expert-built portfolios are designed to help reduce risk, regardless of what’s happening in the market.
Major Trades Published 04/22 - 04/30
Buys
MSCI ($MSCI)
Loar Holdings ($LOAR)
Heartland Express ($HTLD)
Insider: Michael Gerdin (CEO)
# of Shares Purchased: 190,696
$ Amount: $1,928,489
SEC Forms: [1]
Sells
Vertiv Holdings ($VRT)
Insider: Philip O’Doherty (Managing Director)
# of Shares Sold: 3,000,000
$ Amount: $280,929,588
SEC Forms: [1]
Jefferies Financial Group ($JEF)
Insider: Richard Handler (CEO)
# of Shares Sold: 1,500,000
$ Amount: $65,250,900
SEC Forms: [1]
Chipotle ($CMG)
Insider: Brian Niccol (Chairman & CEO)
# of Shares Sold: 6,406
$ Amount: $20,408,980
SEC Forms: [1]
How was today's newsletter?We value all of feedback we receive. Let us know how we did so we can continue to make this the best investing newsletter available! |
🤝 Review of the Week
Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author, paid advertiser, or partner and do not reflect the official policy or position of any other agency, organization, employer or company.
Carbon Finance is a publisher of financial information, not an investment or financial advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.
The information contained on this website/newsletter has been crafted with the assistance of an AI language model to enhance the content of this newsletter. We have made efforts to ensure the quality and reliability of the information presented, but we cannot guarantee its absolute accuracy. Therefore, readers are advised to exercise their own judgment and seek additional sources if necessary.
THE INFORMATION CONTAINED ON THIS WEBSITE/NEWSLETTER IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.
No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.
Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.
The publisher, its affiliates, and clients of the publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.
Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.
Some of the links in this newsletter are affiliate links. This means that if you click on the link and purchase the item, we will receive an affiliate commission at no extra cost to you. All opinions remain our own.
The mention of The Wall Street Rollup in our newsletter is provided as a courtesy to our readers and should not be construed as an endorsement of any product, service, or information provided by the sponsor or partner. Carbon Finance makes no representations or warranties, express or implied, about the accuracy, completeness, reliability, or suitability of the information contained in the sponsor’s or partner’s materials or any related services. Any reliance you place on such information is strictly at your own risk. We are not liable for any loss or damage arising from your engagement with The Wall Street Rollup or their content.
By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.