LULU, RH Beat Earnings; GME Drops On Bottom-Line Miss

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Market indexes took a break today, including the tech-heavy Nasdaq, which had been continually nudging higher all-time closing highs for the past few trading days. The Dow dipped a slight -0.20%, while the S&P 500 closed down -0.13% — both now on three-session losing streaks. The Nasdaq dropped -0.57% on the day, while the small-cap Russell 2000 underperformed the field this Hump Day, -1.14%.

All indexes are still performing solidly year to date, albeit in a year featuring the Great Reopening, where many market participants thought gains would be even stronger to this point in the year. The Russell lags the other major indexes, +15.6% so far in 2021, the Dow is +16% on the year, the Nasdaq +20.4% and the S&P 500 benchmark is +22% year to date.

JOLTS data brought a new series high earlier today: 10.9 million jobs were reported available back in July, with June’s 10.2 million a slight upward revision from the previous series high. The largest gains of job availability were in Healthcare and Social Assistance. Keep in mind nonfarm payrolls for July were very strong, but fell off a cliff for August, presumably because the new increase in Covid cases. We shall see a month from now if this has made a jolt in JOLTS numbers, as well.

Lululemon Athletica LULU results were better than expected after hours, with $1.65 per share easily outperforming the $1.21 Zacks consensus, +180% year over year. Revenues in the quarter brought in $1.45 billion surpassed the $1.34 billion estimated. This has helped LULU — a perfect hybrid, as it turns out, of the stay-at-home/Great Reopening stock play — gain more than 10% in late trading. The company had been underperforming, year to date.

RH RH, formerly Restoration Hardware, also crushed earnings expectations in its fiscal Q2 report released late Wednesday: $8.48 per share was well beyond the $6.58 anticipated, while sales in the quarter of $989 million topped the $972.3 million in the Zacks consensus. Gross margins grew 49.3%, and guidance has been raised. Prices increases are coming to a majority of RH’s products to make up for supply chain price increases. Shares are +3.3% in late trading, +52% year to date.

Meanwhile, meme-stock extraordinaire GameStock GME missed estimates on its bottom line while outperforming on the top: -76 cents per share was notably below the -42 cents expected, though basically cutting in half the -$1.40 reported in the year-ago quarter. Revenues of $1.18 billion did beat the $1.12 billion expected.

No guidance for Q3 or fiscal 2021 were included. GameStop has now posted eight earnings misses in five years. The stock is down -1.9% in late trading, but still +1060% year to date.

Disclosure: None.

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