Facts from the Week: Oct 16, 2021
Highlights from $DAL $TACO $LVMH $RBL.ax $LAZY $RICK $ATZ.to $SCHW $GS $JPM $VCP.l
Summary
Consumer spending continues to look strong as noted by US Census results for September, Louis Vuitton, and others
Financial markets are active as noted by Goldman Sachs, Charles Schwab, etc
Consumer
US Census Retail Sales
Louis Vuitton - $LVMH
Redbubble - $RBL.ax
Excluding masks and on a paid basis, underlying 1Q FY22 Marketplace Revenue was down 6% (4% on a 5 constant currency basis). As the quarter progressed, underlying Marketplace Revenue growth improved from negative 11% in July to negative 2% in September.
Taking a longer term view, 1Q FY22 Marketplace Revenue was 55% higher than 1Q FY20, representing a two-year CAGR of 24%.
Lazydays - $LAZY
Quarter ending September 30, 2021 Preliminary Results:
RV unit sales increased 35% to 3,496 units versus 2,595 units in the third quarter of 2020.
RV unit sales increased 81% vs. 1,935 units in the third quarter of 2019.
Total Revenue increased 48% to $318.7 million compared to $215.7 million in the third quarter of 2020.
Total Revenue increased 101% compared to total revenue of $158 million in the third quarter of 2019.
Adjusted EBITDA increased 119% to $41.7 million versus $19.0 million in the third quarter of 2020. This is an all-time quarterly adjusted EBITDA record for Lazydays, surpassing the previous record of $41.3 million set in the second quarter of 2021.
RCI Hospitality - $RICK
We had a great fourth quarter and year. Our Florida clubs did particularly well, with record fourth quarter and full year combined sales, up 51% and 38% compared to 4Q19 and FY19, respectively. Bombshells also had a record year with sales of $56.6 million in FY21, up 83.7% compared to FY19. -CEO
Aritzia - $ATZ.to
Second Quarter Highlights
Net revenue increased by 74.9% to $350.1 million from Q2 2021 and 45.1% from Q2 2020
eCommerce revenue increased by 48.7% to $130.4 million from Q2 2021 and 171.1% from Q2 2020, comprising 37.3% of net revenues in Q2 2022
Retail revenue increased by 95.3% to $219.6 million from Q2 2021 and 13.8% from Q2 2020, achieving double digit comparable sales growth compared to pre-COVID Q2 2020
Financials
Charles Schwab - $SCHW
Guided by our “Through Clients’ Eyes” strategy, Schwab continues to drive robust business momentum as we support investors through an uneven economic recovery. While bullish sentiment largely persisted throughout the third quarter, debates regarding the overall pace of economic growth, the potential path of inflation, and the ultimate impact of certain global market disruptions weighed on this optimism – contributing to the S&P 500® ending September essentially flat versus June 30. Through it all, investors consistently turned to Schwab as a trusted financial partner, opening over a million new brokerage accounts for the fourth consecutive quarter – bringing year-todate new brokerage accounts to 6.0 million. We generated core net new assets of $139.0 billion in the quarter, pushing asset gathering for the first nine months of the year to $396.0 billion, representing an 8% annualized organic growth rate.
Total client assets ended September at $7.61 trillion, up from $6.69 trillion at year-end 2020. In addition, while the third quarter is often viewed as a slower period for client activity, engagement levels showed persistent strength through the summer months – daily average trade volumes softened only modestly versus the prior quarter to 5.5 million. -CEO
Goldman Sachs - $GS
Investment Banking Highlights: 3Q21 net revenues were significantly higher YoY — Financial advisory net revenues were a record and reflected an increase in completed mergers and acquisitions volumes — Underwriting net revenues reflected significantly higher net revenues in both Equity underwriting (primarily driven by private placements, convertible offerings and IPOs) and Debt underwriting (reflecting an increase in leveraged finance activity) — Corporate lending net revenues primarily reflected net gains related to middle-market lending activities — Overall backlog remained at an elevated level and significantly higher vs. year-end, despite decreasing vs. a record level at 2Q21
JP Morgan - $JPM
“In Consumer & Community Banking, combined debit and credit card spend was up 26%, and Card payment rates have stabilized contributing to modest Card loan growth. Originations in Home Lending remain strong, up 43% to $42 billion, and remain at historically high levels in Auto, of over $11 billion. However, CCB loans were down 2% reflecting continued elevated prepayments in mortgage and the impact of PPP forgiveness primarily offset by growth in Auto, up 12%, and Card, up 1%.
In the Corporate & Investment Bank, Global IB fees were up 52% driven by a surge in M&A activity and our strong performance in IPOs. Markets revenue was very strong overall and down just 5% compared to a third quarter record last year, as continued normalization in Fixed Income offset a strong performance in Equities. Commercial Banking earned a record $1.3 billion of gross IB revenue reflecting the strength of the M&A market. CB loans were down 7%, however, we are seeing early signs of Commercial Real Estate loan growth on modestly higher new loan originations in Commercial Term Lending. In Asset & Wealth Management, AUM of $3.0 trillion grew 17% driven by higher asset values and strong net inflows, and loans continue to be strong, up 20% primarily driven by securities-based lending.” -CEO
Housing
Victoria PLC - VCP.L
Group revenue continues to increase, driven by strong consumer demand for flooring products:
Victoria's Italian ceramic business has its full production output now sold out until Q2 2022 - an unprecedented situation - and management are actively working on plans to further increase capacity.
The UK logistics operation, which is going from strength to strength, continues to provide a compelling service proposition to Victoria's customers, flooring retailers, driving market outperformance in Victoria's UK soft-flooring business.
Australian lockdowns, the longest in the world, will come to an end in October, and we are anticipating a strong contribution to H2, following a limited, but profitable, contribution in H1.
The Group's extensive Luxury Vinyl Tile ('LVT') product range continues to grow. After more than two decades in the European market, where it was invented, LVT continues to replace laminates and sheet vinyl as a floor-covering, with the market share of soft flooring and ceramic tiles broadly unchanged for the last 15 years, comprising around 60% of flooring purchased in Victoria's primary markets.
Victoria's artificial grass business goes from strength to strength. Although there has been sharp price increases in the raw materials for artificial grass, since the pandemic European consumers' preference for locally produced product rather than Far East imports has been noticeable.
The demand for flooring experienced this year has primarily come from existing home owners redecorating. However, the Board expects demand to continue next year and beyond, due to the high level of housing transactions that has been experienced in many of the Group's key markets this year. Housing sales are a good 12-18 month leading indicator of remodelling-led demand for flooring, which is Victoria's core market.
Inflation
Delta - $DAL
Now turning to the fourth quarter. We expect a modest loss as the recent rise in fuel prices will pressure our ability to remain profitable in the current quarter. Adjusted fuel price per gallon is expected to be between $2.25 to $2.40. This represents an increase of nearly $0.40 per gallon from the September quarter as market prices have moved up sharply. Just to remind you, a $0.05 movement in fuel equates to roughly $40 million of expense. Fuel efficiency is expected to be approximately 4% better than the December quarter in 2019.
Del Taco - $TACO - Fiscal Year 2021 Guidelines
Annual commodity inflation compared to the prior year of 2%, inclusive of approximately 5% inflation in the fiscal fourth quarter compared to the prior year;
Labor and related inflation of approximately 6%;
Menu price increase of approximately 4.6%
Odds and Ends
Delta - $DAL
As we look ahead, it's clear that the recovery will continue to be choppy, but we see a number of encouraging trends. Restoring the remaining 1/3 of our revenue base is dependent on further business and international demand improvement. In the September quarter, domestic corporate volume was 40% recovered, up 10 points from the June quarter. With the spiking case counts delaying office reopenings, we did not see the progression we had expected at the start of the quarter, particularly after Labor Day. But as the variant recedes, business travel has picked up over the last month with volumes now reaching the highest level we've seen in the recovery. In the last week, our domestic business volume was close to 50% restored. We expect continued improvement as offices reopen at the start of the new year, and we anticipate meaningful acceleration in business travel starting at that point.
Thanks for reading and have a great weekend!
@RationalResear
RationalResearch@substack.com