Monday’s Headlines: Farfetch Strikes a Win for Retail

Monday’s Headlines: Farfetch Strikes a Win for Retail

Here were the biggest movers in the MyWallSt shortlist on Friday:

Moving Up ⬆️

Farfetch (FTCH) +26.7%

Upstart Holdings (UPST) +16.8%

Ulta Beauty (ULTA) +12.5%

Autodesk (ADSK) +10.3%

Lemonade (LMND) +10.0%

Moving Down ⬇️

Baozun (BZUN) -6.4%

Workday (WDAY) -5.6%

Duolingo (DUOL) -0.6%

Vail Resorts (MTN) -0.3%

BlackLine (BL) -0.1%

1. Luxury fashion platform Farfetch (FTCH) saw its shares skyrocket by over 26% on Friday following a better-than-expected earnings call. The company posted an adjusted loss per share of $0.24 against analyst estimates of a $0.28 loss, on revenue of $514.8 million versus a predicted $560.3 million. Unusually, investors seemed not to care about the revenue miss, with Farfetch’s outperformance on earnings driving a flurry of buys. According to founder and CEO José Neves, “our core business remains very strong, in spite of the macro events in China and ceasing operations in Russia, which impacted our performance and outlook.” However, it must be noted that Farfetch is still down over 70% year-to-date despite this significant stock pop. Retail stocks have taken a hammering this quarter, so this will be seen as very welcome news for an industry struggling with major headwinds. Find out more on the story here.

2. Considering the aforementioned hammering that retail stocks have been getting, Ulta Beauty (ULTA) has been one of the few to buck the trend and deliver exceptional results. Reporting its earnings last Thursday, the beauty store chain recorded sales growth of 21% to hit $2.3 billion in the last quarter, while net profits jumped 44% to hit $331 million. CEO Dave Kimball explained that the strong consumer demand was driven by more people getting out of the house to go shopping in physical stores, paired with the return of social events. Even more encouraging was the outlook going forward — management said that they do not see inflationary pressure having much impact on consumers, with expected comparable sales being updated to 6%-8% from a previous forecast of 3%-4%, indicating that sales could reach close to $9.5 billion this fiscal year. Find out more here.

3. Another week, another antitrust probe for Google (GOOG). In what is the second major antitrust investigation to target Google's ad practices in the UK, the Competition and Markets Authority (CMA) is assessing whether the company's role in the ad tech industry is distorting competition or not. Central to this is the fact that Google operates on both sides of the digital ads market — offering publishers’ ad inventory to marketers while also running an ad exchange that lets advertisers compete for advertising space. There are concerns that Google favors its own ad exchange services to the detriment of rivals, while also purposefully making it difficult for other ad services to use its exchange. This is just the latest in a series of international investigations into the alleged anti-competitive practices of big tech giants like Google, Apple (AAPL), and Meta (FB). Whether these investigations actually have any material impact upon these companies, however, is an entirely different matter. Read more here.

Pádraig BolgerPádraig Bolger

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