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Sunday April 5, 2020

Finances

Finances
 

Dave & Buster's Reports Earnings

Dave & Buster's Entertainment, Inc. (PLAY) released its latest quarterly earnings on Thursday, April 2. The restaurant and entertainment company reported increased earnings for the quarter.

The company reported revenue of $347.2 million for the fourth quarter. This was up 4.6% from revenue of $331.8 million at this time last year.

"In recent weeks, the COVID-19 pandemic has created challenges unlike anything our company, industry, or the U.S. economy has previously experienced, resulting in the temporary closure of all of our stores," said Dave & Buster's CEO Brian Jenkins. "We have thoughtfully and quickly implemented a comprehensive plan to help mitigate the impact of this pandemic, and we are now working to enhance liquidity and preserve store restart capabilities so that we can safely reopen as soon as local conditions allow."

Dave & Buster's reported quarterly net income of $25.0 million, or $0.80 per share. Last year at this time, the company reported net income of $29.4 million, or $0.75 per share, for the quarter.

The company increased its locations from 121 to 136 in fiscal 2019. Dave & Buster's reported a 4.7% decrease in comparable store sales for the quarter. The company attributed the drop in same-store sales to lower walk-in sales, but the drop was partially offset by special event sales. On March 20, Dave & Buster's temporarily closed all stores as part of its COVID-19 mitigation plan.

Dave & Buster's Entertainment Inc. (PLAY) shares ended the week at $10.20, down 27.4% for the week.

Walgreens Reports Mixed Results


Walgreens Boots Alliance, Inc. (WBA) released its latest quarterly earnings on Thursday, April 2. The company posted increased revenue for the quarter.

The company reported sales of $35.8 billion for the second quarter. This was up 3.7% from $34.5 billion during the same quarter last year.

"We are pleased to report second quarter results exceeding our expectations, with sequential improvement in comparable U.S. prescription volume and retail sales," said Walgreens CEO Stefano Pessina. "During these unprecedented times of global uncertainty, Walgreens Boots Alliance is on the front lines of combating the COVID-19 pandemic."

Walgreens reported net earnings of $946 million for the quarter. This was down 18.2% from $1.16 billion in net earnings at this time last year.

Walgreens Boots Alliance operates Walgreens and Boots pharmacies in the United States and United Kingdom. The company reported expanded use of its drive-thru for health, cleaning and grocery items to support customers during the COVID-19 pandemic. The company also announced that it is partnering with the government to initiate testing during the pandemic. Walgreens is offering free home delivery of prescriptions and products.

Walgreens Boots Alliance, Inc. (WBA) shares ended the week at $40.72, down 8.7% for the week.

Conagra Foods Reports Quarterly Results


Conagra Foods, Inc. (CAG), a packaged foods company that includes brands such as Hunt's, Chef Boyardee and Orville Redenbacher, announced its third quarter results on Tuesday, March 31. The company's results were largely in line with expectations.

The company reported revenue during the third quarter dipped to $2.5 billion. This is a decrease of 5.6% from last year's same quarter revenue of $2.7 billion.

"Through the third quarter, we remained squarely on-track to deliver on our fiscal 2020 operational objectives, and our third quarter results were in-line with our updated expectations," said Conagra Foods CEO Sean Connolly. "In more recent weeks, the entire team at Conagra Brands has been focused on supporting our customers, consumers, employees, and communities in the face of the COVID-19 pandemic."

For the quarter, Conagra reported a profit of $204.7 million or $0.42 per share. This was a 15.6% decrease from net income of $242.6 million, or $0.50 per share, reported during the comparable period last year.

The company's net sales decreased 5.6% over the quarter. The decrease was driven primarily by divestitures of sold businesses. On Tuesday, March 31, Conagra CEO Sean Connolly stated that the company's Chef Boyardee brand of canned classic pasta products sales increased 4.5% in the last five weeks. The company expects the COVID-19 pandemic to influence its retail sales as many of Conagra's brands are considered pantry staples.

Conagra Foods, Inc. (CAG) shares ended the week at $31.21, up 10.4% for the week.

The Dow started the week of 3/30 at 21,678 and closed at 21,053 on 4/3. The S&P 500 started the week at 2,559 and closed at 2,489. The NASDAQ started the week at 7,583 and closed at 7,373.
 

Jobs Report Drives Treasury Yields Down

Treasury yields fell early in the week in reaction to reports that the U.S. guidelines for social distancing would be extended through the month of April. Treasury yields fell further due to a surge in unemployment claims from the economic impact of COVID-19.

The U.S. economy shed 701,000 jobs in March, which was the first time the economy has lost jobs since September 2010 and is the biggest loss of jobs since March 2009. Unemployment claims for the last full week of March jumped to 6.6 million. The number of people applying for unemployment benefits increased more than 3,000%, reaching a historic high.

"More people are applying for unemployment insurance as more segments of the economy are shutting down in the wake of the coronavirus," said Andrew Smith, chief investment officer of Delos Capital Advisors. "Companies will take a considerable amount of time to re-hire workers. The longer it takes for the economy to restart, the longer companies will take to get back into gear."

On Sunday, the U.S. President extended guidelines for shelter-in-place and closures of nonessential businesses until the end of April to combat the spread of COVID-19. In response the 10-year Treasury yield fell to a three-week low of 0.599% on March 30.

The 10-year Treasury note yield finished the week of 3/30 at 0.59% while the 30-year Treasury note yield finished the week at 1.21%.
 

Mortgage Rates Fall Further

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, April 2. The report revealed a further drop in rates.

The 30-year fixed rate mortgage rate averaged 3.33%, down from 3.50% last week. At this time last year, the 30-year fixed rate mortgage averaged 4.08%.

This week, the 15-year fixed rate mortgage averaged 2.82%, down from 3.92% last week. Last year at this time, the 15-year fixed rate mortgage averaged 3.56%.

"Mortgage rates have drifted down for two weeks in a row and that drop reflects improvements in market liquidity and sentiment," said Freddie Mac's Chief Economist Sam Khater. "While the market has stabilized relative to prior weeks, homebuyer demand has declined in response to current economic conditions. The good news is that the pending economic stimulus is on the way and will provide support for both consumers and businesses."

Based on published national averages, the savings rate was 0.07% for the week of March 30. The one-year CD averaged 0.32%.

Published April 3, 2020
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