Thursday's Headlines: Disney Rediscovers Its Magic
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
The Trade Desk (TTD) +36.2%
Upstart Holdings (UPST) +17.8%
ShotSpotter (SSTI) +14.3%
Bill.com (BILL) +12.1%
Wix (WIX) +11.9%
Moving Down ⬇️
Bumble (BMBL) -1.7%
Wynn Resorts (WYNN) -1.0%
Trip.com Group (TCOM) -1.0%
Casey's (CASY) -0.7%
Baozun (BZUN) -0.6%
Here are the stories that you need to know ahead of market-open today, Thursday the 11th of August.
Disney Rediscovers Its Magic 🪄
Yesterday saw Disney (DIS) post beats on both the top and bottom line in its fiscal third-quarter earnings report, sending its stock skyward pre-market today. The ‘House of Mouse’ is currently trading up over 7% as investors revel in its unexpected outperformance.
Disney posted earnings per share of $1.09 on revenue of $21.5 billion, blowing past the consensus estimates of $0.96 per share and $20.96 billion respectively. Much of this success appears to be as a result of a marked increase in spending at Disney’s domestic theme parks, with its parks, experiences, and products division increasing revenue by 72% year-over-year.
CFO Christine McCarthy highlighted that “we have not yet seen demand abate at all and we still have many days when people cannot get reservations…we’re still seeing demand in excess of the reservations that we are making available for our guests.”
However, the undoubted star of the show here — sorry Mickey — was the success of the Disney+ streaming service. Subscribers rose to 152.1 million, beating the mark of 147 million that had been expected by analysts. This is a huge win for the company when you consider that chief rival Netflix is actively losing subscribers. In fact, when Disney+’s numbers are combined with the firm’s other streaming offerings — ESPN+ and HULU — the combined total of 221 million subscribers has actually passed Netflix for the first time.
Despite this subscriber spike, it’s not all rosy for Disney+. Average revenue per user dropped by 5% in the quarter, and Disney’s streaming services as a whole actually lost $1.1 billion as a result of higher content production costs. With plans for a new pricing structure that will now support ads, shareholders will be eager to see if Disney can capitalize on its growing audience.
Bumble Shares Slide on Mixed Results 💔
Online dating company Bumble (BMBL) saw sales rise 18% in its second quarter, beating out analyst estimates for revenue. The company brought in $220.5 million when $219 million was expected.
However, the company posted losses on the bottom line and cut revenue guidance for the remainder of the year, causing shares to slide 11% in after-market trading. Bumble, which also owns Badoo and Fruitz, lost $6.4 million in the quarter. That was an improvement on the $11 million lost in the same quarter last year, but bigger than the $2.4 million Wall Street was expecting.
The Austin-based business said it now expects to bring in between $920 and $930 million for 2022. That’s down from its previous guidance of between $934 to $944 million. Management said the cut is largely due to foreign exchange fluctuations, with the U.S. dollar particularly strong.
Revenue from the Bumble app rose 33% in the quarter, while Badoo and its other apps saw revenue decline by 14%. Total paying users hit 3 million, while average revenue per user was $23.65, up from $20.88 in the same period last year.
The results come just a week after rival Match Group also disappointed investors with tepid guidance for the coming year. Bumble CEO Whitney Wolfe Herd was one of the co-founders of Match’s Tinder App, but left the company in 2014 before filing a lawsuit against the company for sexual harassment.
In 2021, upon Bumble’s IPO, Wolfe Herd became the youngest female to take a company public and the youngest female self-made billionaire.
Dutch Bros Delivers Solid Earnings ☕️
The coffee chain Dutch Bros impressed in last night’s earnings call as revenue and store openings soared. Revenue was up 44% year-over-year to $186 million and the company opened up 31 new shops across 9 states. This takes the company’s total store count beyond the 600 mark, and it’s showing no signs of slowing down, with management reaffirming its plans to open at least 65 more in the second half of the year.
It was not all roses for Dutch Bros though, as the quarter saw a decline of 3.3% in same-store sales. The company also posted a net loss of $2 million compared to net income of $12 million for the same period last year, however, $10 million of this can be attributed to a non-cash stock-based compensation expense. Management reaffirmed its full-year guidance with total shop openings expected to be at least 130, and revenue projected to be at least $715 million. It also expects same-store sales growth to be approximately flat.
Founded in 1992 from humble origins, Dutch Bros’ first location was a simple pushcart in downtown Grants Pass, Oregon. Since then, it has become one of the fastest-growing restaurant chains in the United States, operating over 600 drive-thru coffee and beverage shops across the country — although its presence is currently concentrated on the West Coast.
The company wholly owns the majority of its stores, while also operating a franchise model for a small portion. Having gone public late last year, the stock is flat, however, it has been incredibly volatile since its inception. With long-term goals of 4,000 stores across the country, Dutch Bros is showing no signs of letting up anytime soon.