Thursday's Headlines: Meli Soars After a Record Quarter
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Upstart Holdings (UPST) +14.2%
Block (SQ) +11.4%
Shopify (SHOP) +11.1%
StoneCo (STNE) +10.8%
Farfetch (FTCH) +10.2%
Moving Down ⬇️
Match Group (MTCH) -17.6%
Cognex (CGNX) -6.6%
Ulta Beauty (ULTA) -5.1%
Markel Corp (MKL) -3.1%
ShotSpotter (SSTI) -2.7%
Here are the stories that you need to know ahead of market-open today, Thursday the 4th of August.
Meli Soars After a Record Quarter 🔥
MercadoLibre (MELI) stock is charging today off the back of yesterday’s earnings. The company posted record payment volume, sales volume, revenue and buyers, improved margins, and profits far exceeding analysts’ expectations. The stock is currently up 12% in pre-market trading at time of writing.
Total gross merchandise volume (GMV) came in at $8.5 billion dollars, up 22% in U.S. dollars and over 26% on an FX-neutral basis. Mexico was highlighted as a success story, accelerating to 30% growth in GMV. This was thanks to a record 40.8 million total buyers in the quarter.
On the fintech side of things, total payment volume surpassed $30 billion dollars, growing 72% in U.S. dollars and 84% on an FX-neutral basis. This encapsulates the company’s payments arm, Mercado Pago, as well as the company’s burgeoning credit book, which has expanded 230% year-over-year and contributed $529 million in revenue this quarter.
Revenue of $2.6 billion marks another quarterly record and represents growth of 53% in U.S. dollars and 57% on an FX-neutral basis. The revenue split is roughly evenly distributed between the commerce and fintech sides of the business, with commerce making the slight majority. Net income came in at $123 million for the quarter, which includes foreign currency losses of $60 million, and lastly, we saw an expansion of gross margins to 49% from 44% this time last year.
All in all, a great report from MercadoLibre!
Under Armour Cuts Profit Outlook ✂️
On Wednesday, Under Armour (UAA) reported results that slightly beat Wall Street expectations. However, the stock is under pressure this morning after the company issued a weak profit outlook owing to increased promotional activity.
For the current quarter, the Baltimore-based company brought in $1.35 billion — slightly more than analysts had expected. Earnings came in as expected at 3 cents per share. North American revenue was flat for the year while the company saw a 3.3% decline in international revenue, largely owing to weakness in the Asia-Pacific region.
However, it was the guidance for the rest of the year that made the headlines after the company cut its profit forecast. Under Armour now expects to generate between 61 and 67 cents per share for fiscal 2023 — a steep decrease on its previous guidance of between 79 and 84 cents. Management put that miss down to increased promotional activity cutting into margins, as well as inflationary and foreign exchange issues. It now expects around a 4% decrease in gross margins for the year.
The company did say it expects revenue to meet previous guidance.
“We delivered our quarter, are holding our full-year revenue outlook, and remain bullish on our brand strength while we navigate the current environment," Under Armour Interim President and CEO Colin Browne said.
Founder and executive chairman Kevin Plank said that he expects a new permanent CEO to be in place “by year end”. Colin Browne has been serving as interim President and CEO since Patrik Frisk suddenly resigned in June this year.
Lucid Falters Again As Deliveries Flag ⚡️
Electric vehicle (EV) maker Lucid has once again cut its production targets for the year, sending its stock plummeting. The California-based company is trading down close to 13% pre-market at the time of writing, and things could get bleaker for the firm.
Previous estimates for vehicles produced for the year ranged between 12,000 and 14,000 as recently as February. Now, however, that number has been halved to between 6,000 and 7,000 — a far cry away from the lofty goal of 20,000 vehicles touted by the company at the end of 2021.
According to CEO Peter Rawlinson, “our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered.” Lucid currently has over 37,000 reservations for its luxury electric sedan, but has only managed to ship 679 in the second quarter.
Lucid Motors is a luxury EV brand that began life in 2007 as a battery and powertrain manufacturer for other automakers. In 2016, it rebranded and set its sights on developing a high-performance, all-electric vehicle. The first iterations of its debut model, the Lucid Air, rolled off the assembly line in September 2021. Since then, Lucid has attracted significant investment from the Saudi Arabian government’s Public Investment Fund, and went public via SPAC to much fanfare.
Prior to market open today, Lucid is already down close to 50% year-to-date as investors rotate away from tech and growth stocks. While there’s still plenty of potential for Lucid to succeed, it will need to start producing and delivering vehicles at a much quicker rate to try and compete with industry titans such as Tesla.