Tuesday's Headlines: Bed Bath & Beyond Rallies Again
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Chegg (CHGG) +1.9%
Ulta Beauty (ULTA) +1.5%
PagerDuty (PD) +1.2%
Upstart Holdings (UPST) +1.2%
Ford Motor Company (F) +1.0%
Moving Down ⬇️
Farfetch (FTCH) -14.1%
Trip.com Group (TCOM) -5.2%
Nautilus (NLS) -4.9%
Sea Limited (SE) -3.9%
Here are the stories that you need to know ahead of market-open today, Tuesday the 30th of August.
Bed Bath & Beyond Rallies Again 🛁
Another day, another meme stock rally. On Monday, shares of home goods store Bed Bath & Beyond jumped more than 25% as Redditors gave the stock a second wind. It would appear that this renewed, frantic optimism was caused by the retailer’s upcoming strategic update.
This surge follows on from last week when BBB jumped almost 500% off the back of a short squeeze, not to mention all the rising and falling the stock did in 2020, when it joined the company of GameStop, BlackBerry, and AMC. In this instance though, the home of toilet brushes, towels, and as-seen-on-tv chatskis soared alone, GME was up a mere 1.9% in trading.
Bed Bath & Beyond has struggled with liquidity issues, slumping sales, and compressing margins following the pandemic. However, it would appear, fans of the giant retailer are holding out hope for a $400 million loan the business is supposedly near closing.
A full business and strategic update will be delivered on Wednesday the 31st of August.
Pinduoduo Soars After Earnings Surprise 🚀
Shares of Chinese e-commerce platform Pinduoduo were soaring on Monday after the company reported better-than-expected earnings. Revenue grew 36% year-over-year to $4.7 billion, well ahead of analysts’ expectations. This growth can be attributed to a successful ‘618’ shopping festival — China’s second largest shopping event — in which pent-up demand from lockdowns earlier in the year shone through.
What makes Pinduoduo’s performance even more impressive is the fact that e-commerce rivals Alibaba posted falling revenue growth for the same period, and JD.com — the pioneer of the ‘618’ festival ironically — posted its slowest revenue growth as a public company. This outperformance can be attributed to Pinduoduo’s focus on the less-affluent customer. As inflation and slowing income hit the Chinese consumer, they have become much more price sensitive.
The company also posted a huge increase in net income. However, this was down to lowered costs and paused projects due to COVID-19 lockdowns and is not expected to be sustained going forward.
Huazhu Group Misses The Mark 🎯
Huazhu Hotels Group (HTHT) reported its second-quarter earnings last night and underwhelmed across the board. The Chinese economy hotel provider missed the mark for both earnings and revenue, sending its stock sliding.
The company reported an adjusted loss per share of $0.17 on revenue of $504 million — coming in below analyst estimates in both. Much of this loss — a reversal of the profit seen in the previous quarter — was attributed to the extensive lockdowns put in place in many Chinese cities as a result of the country’s zero-COVID policy.
However, CEO Jin Hui outlined that the company’s “long-term strategy remains intact”, despite the ravages of COVID over the last number of years. As Hui explained:
“In the second quarter, we established six regional headquarters and shifted from brand-based to regional-based organizational structure for our economy and midscale brands. By doing so, we believe we can become even closer to our local customers, franchisees, and employees, and create more value for all of them in a more efficient, agile, and precise manner.”
Huazhu Hotels Group was founded in 2004 by Chinese entrepreneur Qi Ji. In the time since, it has grown to become the market leader in the economy hotels business in China, with over 8,000 hotels in operation comprising more than 770,000 rooms, and more than 50 million members signed up to its loyalty program.
Its stock is currently up close to 4% year-to-date in a display of strength following a rough number of years for the hospitality industry, but it does still remain more than 37% off all-time highs seen in early 2021 as it continues to recover following the pandemic.