Facts from the Week: October 31, 21
Highlights from $GOOG $SBUX $VINO.L $AMZN $BOOT $RILY $HOOD $MSFT $UPWK $MHH $SHW $HVT $ETD $CCS $COST
Supply chain headwinds are beginning to ease slightly as noted by Haverty and Ethan Allen
The National Retail Federation is forecasting 8.5-10.5% growth in holiday sales while Google is seeing searches for “open now near me” up 4x globally versus last year
Wages continue higher as noted by Starbucks, Amazon, and others
Google - $GOOG
We've seen explosive growth in digital over the last 20-some months but as the world begins to reopen, shoppers are returning to stores. brick-and-mortar isn't dead. Instead, omnichannel is in full force. Searches for open now near me are up 4x globally versus last year. Strong growth in local shopping queries means people are researching their visits to stores more often before they go. -CBO
National Retail Federation
the National Retail Federation today forecast that holiday sales during November and December will grow between 8.5 percent and 10.5 percent over 2020 to between $843.4 billion and $859 billion. The numbers, which exclude automobile dealers, gasoline stations and restaurants, compare with a previous high of 8.2 percent in 2020 to $777.3 billion and an average increase of 4.4 percent over the past five years.
Starbucks - $SBUX
The recovery in Q4 surged forward as evidenced by the sequential acceleration of 2-year comp growth. We exited Q4 with even stronger 14% 2-year comp growth in September and closed to a record average ticket driven by the strength of our fall beverage lineup, a shift in customer behavior toward more premium beverages and strong food attach.
Kevin noted that the COVID-related volatility drove comp sales down 7% in China in Q4. However, our experienced team and 22-year history continue to serve us well as operating income was only down 1% versus last year.
Virgin Wines - $VINO.L
The current year has got off to a good start. Despite the ending of Covid-19 related restrictions, and therefore a fully operational hospitality sector, revenue for the Group was up 13.3% year-on-year for the first quarter (1 July to 30 September) whilst the number of new customers acquired also delivered a 10.7% year-on-year increase.
The direct-to-consumer wine sector is a large, addressable market and is buoyed by multiple positive consumer trends. These trends include an increasing shift towards premiumisation in the alcoholic beverage market, consumers increasingly purchasing alcohol online and increasing consumer spend on food and drink based subscriptions.
Amazon - $AMZN
Amazon's Q3 revenue of $110.8 billion represented a 2-year compounded annual growth rate of 25% versus a pre-pandemic growth rate in the low 20% range. -CFO
Boot Barn - $BOOT
Once again, flame-resistant work apparel remained the only category that declined when compared to the same period 2 years ago. While FR is a small percentage of our business, it is indicative that sales in the oil markets have not yet returned to the levels they were at 2 years ago. -CEO
B. Riley Financial - $RILY
Operating revenues of $363.3 million, up 87% year-over-year
B. Riley has declared a total quarterly cash dividend of $4.00 per common share. The total dividend payment reflects an increased regular quarterly dividend of $1.00 from the previous regular quarterly dividend of $0.50, in addition to a $3.00 special one-time dividend.
Looking ahead, this December, we are hosting an in-person crypto conference in New York. B. Riley Securities has quickly established a leadership position in the emerging cryptocurrency arena being the first bank to bring a crypto miner public with Stronghold Digital Mining's recent IPO.
So one of the things that -- over time that I have found valuable is you meet a lot of great people in this business. And if you can partner with people you've known or are you seeing in action, maybe short or long time, that's how you can, I think, really leverage your business. And so you will see that like people like Kenny Young, who was the CEO of another company, became our President or Brian Kahn and Vintage Group, we've done a ton of deals with franchise group because we've known them forever. And that list goes on and on. -CEO Bryant Riley
Robinhood - $HOOD
Total net revenues were $365 million in Q3, up 35% year-over-year but down sequentially as expected. Looking at the components of revenue, transaction-based revenues were $267 million in Q3, which is down sequentially but up 32% year-over-year. Equities revenue was $50 million, down 27% year-over-year. Options revenue was $164 million, up 29%. And crypto revenue was $51 million, up 860% year-over-year. While crypto came off record highs from Q2, it significantly exceeded last year's Q3 level.
Looking at trading activities, there are a few call-outs. Customers placing trades were up year-over-year, 24% for equities, 11% for options and 287% for crypto.
Microsoft - $MSFT - LinkedIn
And as more people change jobs than ever before, we saw record engagement as they increasingly turn to LinkedIn to connect, learn, grow and get hired. LinkedIn now has nearly 800 million members. Confirmed hires on the platform increased more than 160% year-over-year. And this quarter, we launched new ways to help job seekers discover roles that align with how they want to work.
Upwork - $UPWK
First, the corporate war for talent has intensified and moved to a new frontier as 10 million Americans are currently considering leaving their full-time jobs to gain more flexibility freelancing. Organizations are also increasingly realizing that a talent strategy predicated only on full-time employees doing all the work will leave them behind.
Second, a new type of career path has emerged with half of the Gen Z talent pool actually choosing to start their careers in freelance rather than full-time employment, reflecting an important mental shift in the workforce.
GSV grew 38% year-over-year to reach $904 million and revenue grew 32% year-over-year to reach $128 million. The number of active clients grew 25% year-over-year and GSV per active client grew 12% year-over-year proving both the strong pull of our platform and the strength of both sides of our marketplace.
Mastech Digital - $MHH
The IT Staffing Services segment reported record revenues of $49 million, an increase of 22% over third quarter of 2020 and representing sequential growth of 10% over second quarter 2021, largely due to a 24% increase in consultants-on-billing achieved during the first nine months of 2021;
Sherwin Williams - $SHW
“Demand remains strong across our pro architectural and industrial end markets; however, results in the quarter were significantly impacted by ongoing and industry-wide raw material supply chain challenges,” said Chairman, President and Chief Executive Officer, John G. Morikis. “Consolidated net sales increased less than 1%, as raw material availability negatively impacted total sales by a high single digit percentage, of which approximately 75% of the impact was in The Americas Group. The raw material availability challenges combined with higher raw material costs significantly pressured gross margins in the quarter. We continue to implement price increases to offset higher raw material costs across the business and are confident margins will recover as inflation headwinds eventually subside.
Haverty - $HVT
Total sales up 19.7%, comp-store sales up 17.7% for the quarter. Total written business was up 2.0% for the quarter.
Our written business for the fourth quarter to date of 2021 is down approximately 3.5% versus the same period last year and up 20.9% over 2019. The written business for the third and fourth quarters of 2020 were up 22.8% and 16.7%, respectively, over 2019. Our delivered sales for the fourth quarter to date of 2021 are up approximately 17.5% versus the same period last year and up 41.5% over 2019. Delivered sales for the third and fourth quarters of 2020 were up 3.9% and 12.9%, respectively, over 2019.
Ethan Allen - $ETD
●Consolidated net sales increased 20.7% to $182.3 million
oRetail net sales of $155.0 million increased 31.3%
oWholesale net sales of $109.4 million increased 12.4%
●Strong written orders
oRetail segment written orders growth of 6.1%
oWholesale segment written orders growth of 8.1%
Century Communities - $CCS
Home sales revenues increased to $917.3 million, a third quarter record and 21% year-on-year increase
Deliveries increased to 2,322 homes, a third quarter record
As expected, net new home contracts in the third quarter 2021 declined to 2,742 homes, compared to 3,204 homes in the prior year quarter, a result of reduced community count and available homes for sale due to robust sales earlier in the year coupled with self-imposed sales limitations including delaying first offering homes for sale later in the construction cycle.
At the end of the third quarter 2021, the Company had 4,866 homes in backlog, representing $1.9 billion of backlog dollar value, both Company records and year-over-year increases of 32% and 47%, respectively.
Amazon: The demand for labor has recently coincided with the shortage of available workers, particularly in the United States. This began in Q2, but it really started to impact our operations and cost structure in Q3. It has led to wage increases and sign-on incentives as companies compete for workers as well as inconsistent staffing levels in our operations.
In addition, disruption to the global supply chains and inflation in the cost of materials such as steel and services such as trucking have also raised our cost of operations. We estimate the cost of labor, labor-related productivity losses and cost inflation to have added approximately $2 billion in operating cost in Q3, particularly in August and September. Our Q4 guidance range anticipates that these costs will approach $4 billion in Q4 as we see a full quarter's impact of these effects and a higher seasonal unit volume.
Specifically in Q3, we saw nearly $1 billion of inflationary pressures, primarily tied to wage increases and incentives in our operations. Our average starting wage is now over $18 per hour with an additional $3 per hour depending on shifts in many locations and sign-on bonuses that can be up to $3,000. -CFO
Microsoft - $MSFT
The case for digital transformation has never been more urgent or more clear. Digital technology is a deflationary force in an inflationary economy. Businesses small and large, can improve productivity and the affordability of their products and services by building tech intensity. -CEO
Starbucks - $SBUX
Effective in January, partners with 2 or more years of service will get up to a 5% raise, and partners with 5 or more years will get up to a 10% raise in keeping with our long-standing history of investing in our partners. And next summer, hourly partners in the U.S. will make an average of nearly $17 an hour, with barista rates ranging from $15 to $23 an hour across the country. In total, the FY '21 and FY '22 investments represent approximately $1 billion in incremental annual wages and benefits.
We expect fiscal 2022 operating margin to be approximately 17%, below our long-term target, driven by approximately 400 basis points of impact related to the wage investments, coupled with an additional headwind of approximately 200 basis points from a combination of inflationary pressures, other growth investments and discontinuation of government subsidies. -CFO
Haverty - $HVT
“Merchandise availability and costs remain a key issue across the industry. Our domestic vendors are beginning to return to normal production levels as flow of their raw materials improves. The factories in Vietnam which closed in July are beginning to reopen at varying levels of capacity. We had product in transit and awaiting shipment prior to the closures which will provide some relief but the shutdown will likely impact availability in the latter part of the fourth quarter and into the first quarter of 2022. -
There was a bright spot during the quarter with the foam supply as our vendors do not see this as an issue moving into the fourth quarter. Vietnam began a shutdown in late July and things accelerated in August, where a majority of our factories were closed for the months of August and September. We are getting positive news from our vendors as they began opening at the beginning of October. However, it will be a slow process to get back to 100% production. Majority of the vendors feel like they will be able to get back to 50% to 75% of production by Chinese New Year with a return to 100% not happening until late first quarter next year.
Ethan Allen - $ETD
Q: And speaking of raw materials, I know in the past few quarters, the foam supply was a significant bottleneck for you all. What are you seeing on the foam supply? And are you seeing continued improvement in that area of your supply chain?
A: Yes, we are almost back to normal. -CEO
Odds and Ends
Fed Balance Sheet
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