- Starbucks soars on Mr Fixit appointment
- Walmart impresses
- Victoria’s not so secret new CEO
Worries about a widespread US bear market or recession have proved short-lived and tech stocks have been the real winners over the past week on Wall Street with investors piling back in to names they know and trust. Think Nvidia (NVDA:NASDAQ), Micron Technology (MU:NASDAQ), Broadcom (AVGO:NASDAQ), who have led the charge, while Apple (AAPL:NASDAQ), Amazon (AMZN:NASDAQ) and Microsoft (MSFT:NASDAQ) all chalked-up 4% to 6% gains.
Strong retail sales and jobless claims data helped ease concerns over an economic slowdown while soft inflation data released earlier in the week bolstered bets that the Federal Reserve will cut interest rates in September, adding to the positive sentiment.
But investors should tread carefully, not all data read positive, with industrial output shrinking far more than expected in July, amid a global slowdown in manufacturing.
Coffee chain Starbuck (SBUX:NASDAQ) was the big weekly winner, more on this later, while Nike (NKE:NYSE) found a friend in Bill Ackman, who declared a three million stock stake in the under pressure sportswear giant through his Pershing Square Capital Management investment company, which recently toyed with its own IPO.
Another interesting stake shift came at Intel (INTC:NASDAQ), which revealed it had sold its entire 1.18 million shareholding in UK chip designs champion Arm Holdings (ARM:NASDAQ), as it continues to push through restructuring and cost-cutting efforts as it struggles to keep up with competitors in the chip race.
STARBUCKS
Long-suffering Starbucks shareholders were rewarded for their patience over the past week as the struggling coffeehouse giant rallied 25% to $94.1 after recruiting its own CEO Mr Fixit.
That’s Brian Niccol, poached from burritos purveyor Chipotle Mexican Grill (CMG:NYSE), where sales surged almost 800% during his tenure, Niccol replaces Laxman Narasimhan, who has failed to arrest Starbucks’ market share losses since taking over in March 2023 and whose abrupt exit follows criticism from former CEO Howard Schultz with activists agitating for change.
Investors are counting on Niccol, a rockstar restaurants operator whose rich fast food background includes a stint as Taco Bell CEO before joining Chipotle, to bring some spice to the Starbucks story. Shares in Chipotle soured 5.2% to $52.2 on disappointment surrounding Niccol’s surprise departure.
WALMART
Retail giant Walmart (WMT:NYSE) impressed as it once against demonstrated its resilience and appeal to value-conscious shoppers with its second-quarter earnings. Given its huge share of the US retail market the numbers also offer some reassurance on the health of the world's largest economy.
US sales were up 4.2% for the three months to the end of July and the company raised guidance for the remainder of the year too. Walmart said it now expects sales to rise by 3.75% to 4.75% for the full year, and adjusted earnings to come in between $2.35 and $2.43 per share.
Previously the company said it expected to be on the high end or slightly above its initial full-year guidance, which called for net sales growth of 3% to 4% and adjusted earnings per share of between $2.23 and $2.37.
Jefferies analyst Corey Tarlowe hailed the ‘improved consistency’ of the business as he indicated AI and automation would continue to play crucial roles.
VICTORIA’S SECRET
You might think buying fancy lingerie wouldn’t be a priority for supposedly cash-strapped shoppers, but not so, according to forecast-beating earnings guidance and the appointment of a new ‘Super’ CEO.
Victoria’s Secret (VSCO:NYSE) soared this week, continuing the stock’s remarkable 30%+ run since the start of the month, after telling the market that second-quarter sales would be down less than expected. EPS (earnings per share) was pitched between $0.34 and $0.39, a massive uptick on previous $0.05 to $0.20 guidance.
The one-time market darling has been trying to get its act together for ages, a task now in the hands of Hillary Super, unveiled as the new CEO. She’ll replace Martin Walters, who has been in the role since 2021.
Super brings more than three decades of retail experience to the company and was most recently head of intimates and accessories at pop star Rihanna’s lingerie brand Savage X Fenty.
Victoria’s Secret shares leapt 16% with investors betting that Super can be the firm’s Wonder Woman, perhaps in a similar vein as Fran Horowitz as overseen at Abercombie & Fitch (ANF:NYSE), another iconic US brand which seemed lost but has well and truly rediscovered its form with a 270% increase in its stock price in the last year.
