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Tuesday January 18, 2022



Walgreens Boots Alliance Reports Earnings

Walgreens Boots Alliance, Inc. (WBA) released its latest quarterly earnings on Thursday, January 7. The pharmacy company posted increased sales but receding profits for the quarter.

The company's sales totaled $36.3 billion during the quarter. This was up from $34.3 billion during the same quarter last year.

"Our first quarter results exceeded expectations as we continue to deliver on our strategic priorities," said Walgreens Boots Alliance Executive Vice Chairman and CEO Stefano Pessina. "As announced yesterday we have taken a major step forward in our transformation; we are divesting our pharmaceutical wholesale business with plans to use the proceeds to accelerate our investments in healthcare."

The company reported net loss of $308 million during the quarter. This was down from net earnings of $845 million during the same quarter last year.

Walgreens Boots Alliance's Retail Pharmacy USA segment reported a comparable store sales increase of 3.7%. This included a 2.7% increase in prescriptions filled during the quarter in comparable stores. The company's comparable pharmacy sales rose 5% during the quarter. Comparable retail sales increased 0.4%.

Walgreens Boots Alliance, Inc. (WBA) shares ended the week at $45.21, up 12.5% for the week.

Bed Bath & Beyond Releases Earnings Report

Bed Bath & Beyond Inc. (BBBY) posted its latest quarterly earnings on Thursday, January 7. The company's sales fell from the prior year's quarter.

Net sales came in at $2.6 billion for the quarter. This was down from $2.8 billion in sales at the same time last year.

"The consistent execution of our growth strategy is unlocking improved financial performance and we delivered a second consecutive quarter of comparable sales and profit growth," said Bed Bath & Beyond President and CEO Mark Tritton. "Additionally, we drove strong cash flow generation and balance sheet improvements in the third quarter and have re-initiated capital return to shareholders."

The company reported a quarterly net loss of $75.4 million. Last year at this time, the company reported a net loss of $38.6 million.

In addition to its namesake flagship brand, Bed Bath & Beyond operates buybuy BABY, Harmon Face Values and Decorist. The Bed Bath & Beyond brand gained 2.2 million online customers during the quarter, bringing its annual total of new online customers to 7 million. The company's digital sales increased 77% overall during the quarter with the Bed Bath & Beyond brand growing 94%. The company's comparable store sales grew 2% overall during the quarter.

Bed Bath & Beyond Inc. (BBBY) shares ended the week at $18.94, up 5.4%.

WD-40 Company Reports Earnings

WD-40 Company (WDFC) released its first quarter earnings report on Thursday, January 7. The San Diego-based manufacturer of household and multi-use products reported an increase in net sales and income.

WD-40 posted quarterly net sales of $124.6 million. This was up 26% from $98.6 million in net sales reported at the same time last year.

"We offer a variety of maintenance and cleaning products that have been in very high demand during these highly unusual times," said Garry Ridge, WD-40 Company's CEO. "Our sales increased 26% compared to the first quarter of last year due primarily to increased demand for our products linked to renovation trends associated with the pandemic. We call this phenomenon 'isolation renovation' and we are experiencing it in nearly all of our direct markets around the world."

For the quarter, WD-40 reported net income of $23.6 million. This is up 94% from $12.2 million reported at the same time last year.

The company saw year over year net sales growth in all three regions of distribution. Net sales in the Americas segment increased 16% to $54.2 million. The Europe, Middle East and African (EMEA) segment increased 40% to $54.7 million, and the Asia-Pacific segment increased 24% to $15.6 million. Despite the strong start to 2021, WD-40 Company continues to withhold future guidance due to the COVID-19 pandemic.

WD-40 Company (WDFC) shares closed at $301.15, up 12.4% for the week.

The Dow started the week at 30,627 and closed at 31,098. The NASDAQ started the week at 12,959 and finished at 13,202. The S&P 500 started the week at 3,765 and ended at 3,825.

Treasury Yields Rise

United States Treasury yields rose during a tense week in the nation's capital. Yields increased following the electoral college proceedings in Congress and held steady following the release of the latest jobs report.

Early Thursday morning, a joint session of Congress finalized the certification of Electoral College votes following the November election. The certification was delayed by an emergency recess when members of Congress were evacuated from the Capitol Building due to civil unrest.

"The votes for President of the United States are as follows: Joseph R. Biden Jr. of the state of Delaware has received 306 votes," stated Vice President Pence during the proceedings. "Donald J. Trump with the state of Florida has received 232 votes."

The benchmark 10-year Treasury note yield reached 1.090% during trading on Thursday. This was up from 0.919% on Monday. The 30-year Treasury bond yield reached a high of 1.872% on Thursday after opening the week at 1.649%.

On Friday, the Department of Labor released the December 2020 jobs report. Nonfarm payrolls decreased by 140,000. Analysts expected a gain of 50,000 jobs for the month.

"If we can get the virus under control, the economy has shown there's a lot of pent-up consumer demand," said Patrick Leary of Incapital. "People want to go out and engage in a variety of activities. Even though the vaccine rollout has been slow to start, it will eventually come into play. The market is rationally looking at that desired outcome."

The 10-year Treasury note yield closed at 1.10% on 1/8, while the 30-year Treasury bond yield was 1.86%.

Mortgage Rates Set New Record Low

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, January 7. The report showed interest rates continue to reach new lows.

The 30-year fixed rate mortgage averaged 2.65% this week, down from last week's average of 2.67%. Last year at this time, the 30-year fixed rate mortgage averaged 3.64%.

This week, the 15-year fixed rate mortgage averaged 2.16%, down from 2.17% last week. During the same time last year, the 15-year fixed rate mortgage averaged 3.07%.

"A new year, a new record low mortgage rate," said Freddie Mac's Chief Economist, Sam Khater. "Despite a full percentage point decline in rates over the past year, housing affordability has decreased because these low rates have been offset by rising home prices. However, the forces behind the drop in rates have been shifting over the last few months and rates are poised to rise modestly this year. The combination of rising mortgage rates and increasing home prices will accelerate the decline in affordability and further squeeze potential homebuyers during the spring home sales season."

Based on published national averages for the week of 1/4, the national savings rate was 0.05%. The one-year CD averaged 0.16%.

Published January 8, 2021

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