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business newsTicker Shock: Yum Looks Tasty; Disney Not So Magical
Wednesday's top stories and stocks with potential to move.
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Asian stocks rose sharply overnight with the Hang Seng and the Nikkei both up north of 2%. European stocks were in the green too. Here in the US we're currently trading mixed.
Here's what I’m focused on this morning:
Costco (COST):
I’m guessing my weekend shopping there didn’t help too much. Earlier this morning, the well-known chain offered up its January results and gave its outlook for the second quarter.
It took in $5.1 billion in sales in January, which was a smidge below what it did last year. However, the big news -- and what I have a hunch people will be talking about throughout the session -- revolved around its outlook for the second quarter.
Per the release:
“Currently, earnings per share for the second quarter are expected to be substantially below the current First Call consensus earnings per share estimate of $.70. According to Richard Galanti, Chief Financial Officer of Costco: 'General economic conditions have negatively affected our sales, primarily in non-foods, and merchandise margins. Our margins have also been impacted by aggressive merchandise pricing in our core merchandise business to drive sales and increase market share, particularly during the first four weeks of the fiscal quarter.'"
How “substantially below”?
Oh, and get this from Galanti in the same release: “Given the uncertainties surrounding the economy, including consumer behavior, we will not be providing earnings guidance for the remainder of this fiscal year.”
Needless to say, I’m not going to be a buyer on this news. And that part about no guidance really irks me -- gimme somthing!
The second-quarter results are apparently due out on March 4.
Yum! Brands (YUM):
I’m sure my kids must have had a positive influence on the fast food company’s fourth-quarter results.Excluding items, it earned $0.46 - or a penny more than analysts were expecting. Meanwhile, total sales were apparently in line with expectations.
I think it’s also important to note that same-store sales were up 3%, and the company came out and offered some decent guidance for ’09.
Per the release: “The company expects full year 2009 EPS of at least 10% growth, or $2.10 per share, excluding special items.”
That’s $0.02 ahead of the estimate I’m seeing. But what I think the quarter lacked was serious pop. I wanted to have a little more to sink my teeth into - to give me a reason to forget about fast food rival McDonalds (MCD).
All in all: good quarter, good guidance, good company. But why should I choose them over Mickey D’s or Burger King (BKC) at this point?
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