Finances

PriceSmart Inc. (PSMT) reported its second quarter earnings on Tuesday, April 9. The company reported an increase in revenue and income, causing its shares to rise nearly 5% following the release of the report.

Revenue for PriceSmart's second quarter reached $1.29 billion. This is up 13% from $1.14 billion in revenue at this time last year and exceeded analysts' estimates of $1.28 billion.

"I want to extend my appreciation to everyone at PriceSmart for contributing so much to a very successful second quarter," said PriceSmart's CEO, Robert Price. "I also want to thank our merchandising teams in the U.S., and in our countries for their outstanding management of inventory flow during the holidays, resulting in strong sales, low markdowns, and excellent inventory churn."

PriceSmart reported net income of $39.27 million or $1.31 per adjusted share. This is up from net income of $31.35 million or $1.02 per adjusted share in the same quarter last year.

The San Diego-based company that owns and operates membership warehouse clubs in Latin America and the Caribbean reported comparable net merchandise sales increased 8.8% year-over-year. The company's Central America segment sales increased 12.4%, while the Caribbean segment sales also increased 7.2%. The Colombia segment saw an increase of 34.5%, which was attributed to the significant appreciation of the Colombian currency. Membership accounts grew 5.0% to 1.86 million with Platinum membership accounts reaching 9.6% of the total membership base. PriceSmart currently operates 54 warehouse clubs and plans to open its newest warehouse club in Cartago, Costa Rica in early 2025. PriceSmart's board of directors declared a special cash dividend of $1.00 per share payable on April 30, 2024, to stockholders of record on April 19, 2024.

PriceSmart Inc. (PSMT) shares ended the week at $79.45, down 4% for the week.

WD-40 Announces Earnings Report

WD-40 Company (WDFC) announced its second quarter earnings on Tuesday, April 9. The manufacturer of household and multi-use products missed revenue estimates resulting in its shares slipping 3% following the release.

The company's net sales for the second quarter totaled $139.1 million. This was up 7% from sales of $130.2 million during the same quarter last year but below analysts' estimates of $140.5 million.

"For the second quarter, global net sales were up 7% over the prior year with growth across all trade blocs," said WD-40 Company CEO, Steve Brass. "We also continue to expand gross margin, which improved 160 basis points over the prior year. Overall, we are incredibly pleased with our performance and are confident in achieving our long-term targets to drive sustainable, profitable growth."

WD-40 reported net income of $15.5 million or $1.14 per adjusted share for the quarter. This was down from earnings during the same quarter last year of $16.5 million or $1.21 per adjusted share.

WD-40's Americas segment net sales increased by 1.0% reaching $63.5 million for the quarter. The Europe, Middle East, Africa and India segment reported an increase in sales of 16% in the second quarter to $54.3 million primarily due to an increase in sales of maintenance products in France, India and Iberia. Sales in the Asia-Pacific segment rose by 4% to $21.3 million. WD-40 Company's board of directors declared a quarterly dividend of $0.88 per share payable on April 30, 2024, to stockholders of record at the close of business on April 19, 2024. The company updated its full fiscal year guidance and expects revenue to be between $570 million and $600 million.

WD-40 Company (WDFC) shares ended the week at $236.29, down 6% for the week.

CarMax Reports Earnings

CarMax, Inc. (KMX) released its fourth quarter and full year earnings report on Thursday, April 11. The automobile retailer's stock dropped almost 9% after the company missed earnings and revenue estimates.

CarMax reported net sales of $5.63 billion during the quarter, down 1.7% from $5.72 billion in net sales at this time last year and below the expected quarterly revenue of $5.78 billion. For the full year, revenue came in at $26.54 billion, down 10.6% from $29.68 billion in the previous fiscal year.

"Our third quarter performance reflects the continued efforts of the team that have resulted in several quarters of sequential improvements across key components of our business, despite the persistent widespread pressures in the used car industry," said CarMax CEO, Bill Nash. "Key results this quarter include year-over-year growth in wholesale units, further SG&A reductions, a strengthened credit mix in CAF's portfolio, strong retail and wholesale gross profit per unit, and year-over-year growth in profitability."

The company reported quarterly net income of $50.27 million or $0.32 per adjusted share. This was down from $69.01 million or $0.44 per adjusted share one year ago. For the full year, the company reported net income of $479.20 million, a decrease from net income of $484.76 million reported last year.

CarMax sold 287,603 vehicles in the quarter, a decrease of 0.9% from the same time last year. CarMax's wholesale vehicle sales declined by 4% to 115,546 vehicles. The company's comparable store used sales decreased 0.1%. CarMax's finance segment reported income grew by 18.9% for the quarter to reach $147.3 million. The company added four locations during the fourth quarter for a total of 245 locations by the end of the fourth quarter.

CarMax, Inc. (KMX) shares ended the week at $83.07, down 14% for the week.

The Dow started the week of 4/8 at 38,916 and closed at 37,983 on 4/12. The S&P 500 started the week at 5,211 and closed at 5,123. The NASDAQ started the week at 16,285 and closed at 16,175.

U.S. Treasury yields dropped early in the week as investors waited for the latest inflationary data. Yields moved higher later in the week after reports of continued higher inflation and a resilient job market dimmed prospects for the Federal Reserve to begin cutting interest rates.

On Wednesday, the U.S. Department of Labor announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, rose 0.4% in March, higher than economists' expected growth of 0.3%. The CPI year-over-year increased to 3.5% from 3.2% the prior month but also exceeded economists' expectation of 3.4% year-over-year.

"This marks the third consecutive strong reading and means that the stalled disinflationary narrative can no longer be called a blip," said chief global strategist at Principal Asset Management, Seema Shah. "In fact, even if inflation were to cool next month to a more comfortable reading, there is likely sufficient caution within the Fed now to mean that a July cut may also be a stretch, by which point the US election will begin to intrude with Fed decision making."

The benchmark 10-year Treasury note yield opened the week of April 8 at 4.41% and traded as high as 4.61% on Thursday. The 30-year Treasury bond opened the week at 4.56% and traded as high as 4.69% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 11,000 to 211,000 for the week ending April 6. Continuing unemployment claims increased by 28,000 to 1.82 million.

"Even though hiring growth is slowing, net payroll growth remains strong thanks to the low level of layoffs in the economy, and there is no sign from the claims data that the story is changing," said deputy chief U.S. economist at Oxford Economics, Michael Pearce.

The 10-year Treasury note yield finished the week of 4/8 at 4.53%, while the 30-year Treasury note yield finished the week at 4.63%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, April 11. The survey showed mortgage rates increased for both the 30-year and 15-year fixed rates.

This week, the 30-year fixed rate mortgage averaged 6.88%, up from last week's average of 6.82%. Last year at this time, the 30-year fixed rate mortgage averaged 6.27%.

The 15-year fixed rate mortgage averaged 6.16% this week, up from 6.06% last week. During the same week last year, the 15-year fixed rate mortgage averaged 5.54%.

"Mortgage rates have been drifting higher for most of the year due to sustained inflation and the reevaluation of the Federal Reserve's monetary policy path," said Freddie Mac's Chief Economist, Sam Khater. "It is clear that while the trend in inflation data has been close to flat for nearly a year, the narrative is much less clear and resembles the unrealized expectations of a recession from a year ago."

Based on published national averages, the savings rate was 0.47% as of 03/18. The one-year CD averaged 1.81%.

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