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Tuesday January 18, 2022



Simply Good Foods Reports Earnings

The Simply Good Foods Company (SMPL) released its latest quarterly earnings and year-to-date results on Wednesday, April 7. The nutritional food and snacks developer, marketer and seller reported increased revenue and earnings.

Simply Good Foods reported quarterly net sales of $230.6 million, up 1.5% from $227.1 million at the same time last year. Year-to-date sales came in at $461.8 million, up 21.8% from $379.3 million at the same time last year.

"In the second quarter we executed well against our initiatives driving sales and earnings growth in a challenging operating environment due to continued reduced consumer mobility related to COVID-19," said Simply Good Foods President and CEO Joseph E. Scalzo. "Retail takeaway in measured channels was slightly better than the last quarter and our e-commerce momentum continued. Our earnings growth and strong cash flow have provided us with flexibility to invest in our business and deleverage."

The company announced net earnings of $19.1 million for the quarter, an increase from $10.7 million a year ago. The company reported quarterly earnings of $0.19 per share, up from $0.11 per share. Year-to-date earnings came in at $41.6 million, up from $5.9 million at the same time last year.

Simply Good Foods is the maker and seller of Atkins branded low carbohydrate frozen food, snacks and shakes. In 2020, the company completed the acquisition of Quest Nutrition, a healthy lifestyle food company which makes protein products such as snack bars, shakes and powders. The company noted that earnings in the comparison period last year were negatively affected by costs related to the Quest Nutrition acquisition. Second quarter sales this year were driven by strong Quest performance and an increase in e-commerce sales for both Atkins and Quest brands.

The Simply Good Foods Company (SMPL) shares ended the week at $31.33, relatively unchanged for the week.

Levi Strauss Posts Earnings

Levi Strauss & Co. (LEVI) reported its latest quarterly earnings on Thursday, April 8. Although sales fell during the quarter, shares increased 6% after the release of the report.

The company reported net revenue of $1.31 billion for the quarter. This was down 13% from $1.51 billion at the same time last year, but exceeded analysts' estimates of $1.25 billion.

"We've started the year strong, beating our internal expectations even as we are lapping a particularly good quarter in the prior year," said CEO of Levi Strauss & Co. Chip Bergh. "Our strong results this quarter were driven by faster-than-expected recovery in our business from our relentless focus on the priorities that are driving outsized performance. We continue to lean into our strategies – leading with our brands, investing in direct-to-consumer and diversifying our business – while still operating prudently to manage the ongoing uncertainty, especially in Europe. As the vaccine rollout continues and consumer excitement returns, I am more confident than ever that we will emerge from the pandemic a stronger business and drive sustainable, profitable growth."

Net income for the quarter came in at $143 million. This was down 7% from $153 million in net income during the same quarter last year.

Levi Strauss & Co. reported 15% of its stores were closed during the quarter. The company noted the lack of a Black Friday in the first quarter of fiscal 2021 adversely affected year-over-year net revenues by approximately three percentage points. As the company navigates the impact of the COVID-19 pandemic, it continues to invest in digital tools to diversify across geographies, product categories and distribution channels. The company increased its 2021 first-half net revenue outlook to 24-25% growth compared to the first half of 2020.

Levi Strauss & Co. (LEVI) shares ended the week at $25.67, up 6.5% for the week.

WD-40 Reports Earnings

WD-40 Company (WDFC) reported quarterly earnings on Thursday, April 8. The maintenance, homecare and cleaning products company reported increased revenue and income for the quarter, but fell short of analysts' estimates.

WD-40 reported net revenue of $111.9 million for the second quarter, up 12% from $100.0 million at this time last year. This fell short of analysts' estimates of $114.3 million for the quarter.

"We continue to experience very high demand for our maintenance products due to renovation trends associated with the pandemic, or what we call isolation renovation," said WD-40 Company's CEO Garry Ridge. "In addition, we are seeing improved market conditions due to a reduction of COVID-19 lockdown measures in many markets, particularly in China, as well as increased sales through the ecommerce channel."

WD-40 reported net income of $17.2 million, or $1.24 per share. This is up from $14.3 million, or $1.04 per share at the same time last year, but fell short of analysts' estimates of $1.32 per share.

The San Diego-based company is best known for its multi-use lubricant housed in a blue and yellow can with a red top. Net revenue in the second quarter increased 39% in the Asia-Pacific region, with revenue in China increasing 251% compared to the prior year. The company attributed increased sales to renovation trends, improved market conditions and reduction of lockdown measures. The company identified the further development of the WD-40 specialist line as a key objective, and noted the use of the iconic color scheme helped customers identify its products up to 26% faster.

WD-40 Company (WDFC) shares ended the week at $280.07, down 9.0% for the week.

The Dow started the week of 4/5 at 33,801 and closed at 33,801 on 4/9. The S&P 500 started the week at 4,034 and closed at 4,129. The NASDAQ started the week at 13,595 and closed at 13,900.

Treasury Yields Fluctuate

Yields on U.S. Treasurys fell from recent highs after weekly jobless claims unexpectedly increased, but rebounded early Friday after the March producer price index (PPI) showed an increase in wholesale price inflation.

On Thursday, the U.S. Department of Labor reported 744,000 initial jobless claims during the week ending April 3. This was up 16,000 from the prior week and exceeded analysts' estimates of 694,000 new claims.

Jobless claims "have been improving lately, with a downward trend reported since early in January that generally has coincided with vaccine distribution and a reduction in new COVID-19 cases," said JPMorgan economist Bruce Kasman. "Initial claims did jump in the latest weekly report, but the four-week moving average for regular state filings hit its lowest level in over a year."

On Friday, the Bureau of Labor Statistics reported the PPI increased 1.0% in March, exceeding the 0.5% gain analysts expected. The PPI increased 4.2% in the 12 months prior to March, which is the largest increase since September 2011.

"The Fed will likely want to see evidence on whether the pickup in inflation this year is indeed a temporary burst associated with the economy's full-reopening versus a shift to a higher inflation environment post-COVID," said Wells Fargo Securities senior economist Sarah House. "That should keep the [Federal Open Market Committee] on the sidelines in the coming months, even as inflation turns higher."

The benchmark 10-year Treasury note yield was at 1.68% during trading on Friday, up from 1.63% at close on Thursday. The 30-year Treasury bond yield reached 2.36% during trading on Friday, up from 2.31% at close on Thursday.

The 10-year Treasury note yield closed at 1.66% on 4/9, while the 30-year Treasury bond yield was 2.33%.

Mortgage Rates Decrease

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, April 8. After weeks of steady increases, mortgage rates decreased this week.

This week, the 30-year fixed rate mortgage averaged 3.13%, down from last week's average of 3.18%. Last year at this time, the 30-year fixed rate mortgage averaged 3.33%.

The 15-year fixed rate mortgage averaged 2.42% this week, down from 2.45% last week. At this time last year, the 15-year fixed rate mortgage averaged 2.77%.

"After moving up for seven consecutive weeks, mortgage rates have dropped due to the recent, modest decline of U.S. Treasury yields," said Freddie Mac's Chief Economist, Sam Khater. "As the economy recovers, it should experience a strong rebound in the labor market. Combined, these positive signals will continue to bolster purchase demand. The drop in rates creates yet another opportunity for those who have not refinanced to take a look at the possibility."

Based on published national averages, the national savings rate was 0.07% for the month of April. The one-year CD finished at 0.15%.

Published April 9, 2021

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