A mixed day on Wall Street this Tuesday, though off the session lows on the Nasdaq, which finished the day -0.50% on the day. The Dow closed around its mirror image, +0.54%, +194 points and near session highs. The S&P 500 held the middle ground, +0.17% on the day, while the small-cap Russell 2000 dipped for its fifth straight session, -0.15%.
Disappointing PMI Services data for November and slightly better Manufacturing numbers mingled with ongoing European Covid concerns and overall high index levels to keep softness in the market, and this is before a surprisingly active afternoon in earnings releases for both Retail and Tech sectors.
Nordstrom JWN missed bottom-line expectations by a wide margin for the company’s fiscal Q3: 39 cents per share versus expectations of 56 cents. Revenues beat for the quarter: $3.64 billion against the Zacks consensus $3.54 billion. But shares sold off on the news on weakness at Nordstrom Rack and higher labor costs in the quarter, sending shares -21% in after-market trading. This has been an ongoing problem for the department store retailer, now the second earnings miss in the last three quarters, and fifth miss in the past eight.
The Gap’s GPS Q3 numbers came in even worse, missing on the bottom line badly: 27 cents versus 49 cents expected, and only 2 cents higher from the Covid-impacted Q3 a year ago. Revenues of $3.94 billion was woefully below the $4.45 billion analysts were looking for. While Gross Margins grew +42.1%, the highest in more than 10 years, but supply constraints, inventories and port congestion helped all three big Gap brands — The Gap, Old Navy and Banana Republic — go lower for the quarter, although by “only” -15%, still outperforming Nordstrom.
Meanwhile, HP Inc. HPQ outperformed on both top and bottom lines in its fiscal Q1 after Tuesday’s close, posting 94 cents per share on $16.7 billion in sales, which easily surpassed the 88 cents per share and $15.36 billion expected. Fiscal Q2 earnings guidance increased to a range of 99 cents to $1.05 per share; the Zacks consensus had been for 96 cents per share next quarter. As a result, HPQ shares are +8% in late trading, with HP Inc. having already grown +33.5% year to date.
And Silicon Valley cloud tech company VMWare VMW immediately went up +2% following its Q3 earnings release after the bell today (though are slightly in the red as the release gets absorbed) on beats for both earnings and revenues: $1.72 per share topped the $1.54 expected (and positive year over year from $1.66 posted in Q3 2020), on $3.19 billion in sales which outpaced the $3.12 billion, and representing more than 10% growth year over year. VMWare shares are still underwater year to date, however, -16% prior to the earnings report.
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