Zeroed-In: The Market at a Glance, 05/21/2020

By: KS Anthony | Be the First to Comment

Thursday May 21, 2020

Tech on Deck
Silicon Valley gaming and tech company Nvidia (NVDA: US) reported a massive double-beat against EPS and revenue estimates this afternoon, with revenue up 39% from the year before. The company's press release was nothing short of bullish, even celebratory in its tone. “As the world battles COVID-19, we salute the first responders, healthcare workers, and service workers who courageously step in harm’s way to save lives and keep the world going,” CEO Jensen Huang said. “We also thank the scientists around the world racing to find a vaccine for COVID-19."

Also reporting earnings after close was hospitality software company Agilsys (AGYS: US), who beat estimated revenue, but missed on earnings per share. Despite this, AGYS CEO and President Ramesh Srinivasan remained upbeat. “In spite of the significant pandemic related business challenges during the month of March, fiscal year 2020 was a major positive business momentum shift year for us," he said in a statement."Beginning with three consecutive quarters of record revenue levels, Q4 fiscal 2020 was on pace to be a very successful sales quarter, and another record revenue quarter, prior to a disappointing ending shaped by COVID-19."

Rounding out tech stocks – at least for our purposes – was Hewlett Packard (HPE: US), who missed estimates and withdrew guidance. "The global economic lockdowns since February significantly impacted our fiscal Q2 financial performance," CEO Antonio Neri said in a press release. "We exited Q2 with $1.5 billion dollars in orders across the portfolio, representing two times the average historical backlog.”

Wear and Tear

In retail, Ross Stores (ROST: US)
missed both EPS and revenue estimates as its brick and mortar stores suffered under nationwide shutdown and social distancing orders. “Our first quarter results reflect the unprecedented impact the COVID-19 pandemic has had on our business," said CEO Barbara Rentler in a press release,"which led to the closure of all stores and our first quarterly operating loss in more than 30 years. Operating margin for the period was negatively affected by the significant revenue decline from stores being closed for approximately half of the quarter and the aforementioned one-time, non-cash inventory valuation charge.”
In speaking of plans to reopen stores, Rentler maintained a cautious tone, saying “The reopening of our stores will be largely dependent on guidance from health officials as well as government directives. Given the lack of visibility created by COVID-19 and the unknown extent of the impact the virus will have on consumer demand and store productivity, we are not providing second quarter and 2020 full year sales and earnings guidance.”

Wake Up to Makeup

Oakland-based cosmetics company E.l.f. Beauty (ELF: US) enjoyed a double-beat on estimates. In its 8-K filing with the SEC, company officials wrote that "net sales increased 6%, or $15.2 million, to $282.9 million, as compared to $267.7 million in fiscal 2019. The increase was primarily driven by increased productivity across our retail and e-commerce channels, partially offset by the closing of all 22 e.l.f. retail stores in February 2019. Fiscal 2019 included $12.0 million in net sales related to e.l.f. retail stores. Excluding the contribution from e.l.f. retail stores, net sales increased 11% as compared to fiscal 2019."

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