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Friday October 22, 2021



Domino's Pizza Delivers Earnings

Domino's Pizza, Inc. (DPZ) released its latest quarterly earnings on Thursday, October 8. The restaurant company reported increased sales and profits for the quarter.

Revenue came in at $967.7 million during the quarter. This was up from $820.8 million during the same quarter last year.

"I am extremely proud of our global franchisees, operators and corporate teams for their relentless passion and energy as we continue to navigate through the pandemic," said Domino's CEO Ritch Allison. "Our strong third quarter results once again demonstrated our focus on value, service, quality and innovation to meet customer needs."

Domino's reported net income of $99.1 million. This was up from $86.4 million last year at this time.

The company's domestic same-store sales increased 17.5% during the quarter. Domino's attributed this increase to changing consumer behavior related to the coronavirus pandemic. Internationally, Domino's stores posted same store growth of 6.2%. Additionally, the company reported a net increase of 44 stores in the U.S. and 39 new stores abroad.

Domino's Pizza, Inc. (DPZ) shares ended the week at $390.95, down 9.8% for the week.

Levi Strauss Posts Earnings

Levi Strauss & Co. (LEVI) reported its latest quarterly earnings on Tuesday, October 6. Sales fell during the quarter.

The company reported net revenue of $1.06 billion for the quarter. This was down 27% from $1.4 billion at the same time last year.

"As we continue to navigate the COVID-19 pandemic and its impact, we are laser focused on the areas that will drive value and enable us to emerge stronger on the other side, including elevating our already iconic brand, investing in digitization, and accelerating our efforts to diversify across geographies, product categories and distribution channels, including doubling down on our fast-growing direct-to-consumer business," said Levi's President and CEO Chip Bergh. "These investments are already paying off- we exceeded our expectations for the third quarter, our total digital business has doubled as a share of total net revenues, and Levi's remains the global leader in denim, where our women's business continues to take market share. And the brand has gotten even stronger during the pandemic."

Net income for the quarter came in at $27 million. This was a 78% decline from $124 million in net income during the same quarter last year.

Levi's attributed its sharp drop in sales and earnings to the effects of the ongoing pandemic. Prolonged retail store closures impeded a large portion of the company's revenue source for much of the year. In the Americas Levi's net revenue totaled $550 million for the quarter, down 29%. The company's best regional performance came from the European market with only a 16% decline in sales. In Asia, Levi's net revenue fell 42% during the quarter.

Levi Strauss & Co. (LEVI) shares ended the week at $15.21, up 5.9% for the week.

Acuity Brands Releases Earnings Report

Acuity Brands, Inc. (AYI) reported its fourth quarter and full-year earnings on Thursday, October 8. The company's results fell year-over-year.

Net sales reached $891.2 million during the quarter, down from $938.1 million during the same quarter last year. For the full year, the company posted net sales of $3.3 billion.

"Our company achieved strong financial results in the fourth quarter despite the backdrop of a weak market environment associated with the COVID-19 pandemic which continues to negatively impact our end markets," said Acuity Brands CEO Neil Ashe. "We were able to manage to a 5% decline in sales while balancing a strategic investment in price and maintaining our gross profit margins."

Acuity Brands reported quarterly net income of $73.7 million, down from $96.1 million during the same period last year. For the full year, the company reported $248.3 million in net income.

The Atlanta, Georgia-based manufacturer of lighting products experienced a slowdown in sales during the pandemic-affected quarter. Despite the headwinds, the company reported a virtually unchanged gross profit margin of 42.1% during the quarter. The company's operating profit margin was 11.9%, a 2% drop from the prior year.

Acuity Brands, Inc. (AYI) shares ended the week at $99.62, down 6.9% from last week.

The Dow started the week of 10/5 at 27,825 and closed 28,587 on 10/9. The S&P 500 started the week at 3,367 and closed at 3,477. The NASDAQ started the week at 11,169 and closed at 11,580.

Treasury Yields Rise as Stimulus Talks Continue

Yields on U.S. Treasurys increased this week amid continued speculation over the fate of another round of proposed COVID-19 relief measures. Congressional leaders have revived negotiations in hopes of providing additional relief to taxpayers in the near future.

On Thursday, President Trump urged Congress to reach a deal on the next economic stimulus before the upcoming election. This was a reversal in course after the president announced earlier in the week that he had put a halt to the negotiations until after the election.

"The situation is kind of murky and I think the murkiness is a result of the proximity to the election and everybody kind of trying to elbow for political advantage," said Senate Majority Leader Mitch McConnell. "I'd like to see us rise above that like we did back in March and April, but I think that's unlikely in the next three weeks."

The benchmark 10-year Treasury note yield was at 0.794% during trading on Friday, up from the week's opening yield of 0.698%. The 30-year Treasury bond yield reached 1.60% during trading on Friday, up from 1.488% at the start of the week.

On Thursday, the U.S. Department of Labor released a report showing initial jobless claims dropped to 840,000 last week. This was down 9,000 from the prior week but exceeded analysts' estimates of 825,000 new claims.

"These are still high in the grand scheme of things," said Commerzbank economist Peter Dixon. "They've stabilized over the course of the last few months, but they're also not really going down."

The 10-year Treasury note yield closed at 0.78% on 10/9, while the 30-year Treasury bond yield was 1.57%.

Mortgage Rates Hold Steady

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, October 8. Rates remained relatively unchanged this week.

This week, the 30-year fixed rate mortgage averaged 2.87%, down from last week's average of 2.88%. Last year at this time, the 30-year fixed rate mortgage averaged 3.57%.

The 15-year fixed rate mortgage averaged 2.37% this week, up from 2.36% last week. At this time last year, the 15-year fixed rate mortgage averaged 3.05%.

"The year-long slide in mortgage rates seems to be ending as rates have flattened over the last month and the economic rebound has slowed," said Freddie Mac's Chief Economist, Sam Khater. "But with near record low rates, buyer demand remains robust with strong first-time buyers coming into the market. The demand is particularly strong in more affordable regions of the country such as the Midwest, where home prices are accelerating at the highest rates over the last two decades."

Based on published national averages, the national savings rate was 0.05% for the week of 10/5. The one-year CD finished at 0.18%.

Published October 9, 2020

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