Domino's Stacks Up, Target Misses, and Winter Offically Gets the Blame for Everything

Good evening, good lookin'. Here are the five things you need to know on March 1.

Mar 1, 2014 at 7:00PM
Links worth snacking on: Sorry, Jennifer Lawrence. You were phenomenal in American Hustle, but we think that February deserves a gold statue from the Academy -- not only was it the Dow's best month since January 2013, but the S&P 500 closed above a record 1,850 points for the first time ever. With those kinds of performances, Wall Street should be throwing February an after-party worthy of a Miley Cyrus publicity stunt.
 
1. The fourth-quarter earnings winner ...
Domino's Pizza's (NYSE:DPZ) earnings were double-stuffed like their crusts, jumping 18% from last year as the chain opens up new ovens internationally. The U.S. market is tight-packed with pizza spots, from your favorite $1-a-slice deal to luxurious brick-oven operations, so the 570-plus new stores abroad are bringing home the bread for Domino's.
 
But what about expectations? Analysts have already been pretty hungry and bullish on Domino's over 2013. Wall Street was already projecting profit growth of 16% for Domino's and has sent the stock up 63% in the past year.
 
To show the love, Domino's isn't doing a new extra-pepperoni deal, but increasing its dividend by $0.25 per share. The news is a sign that a growing Domino's is ready to return cash to shareholders as its spreads the dough into new lands.

2. ... and the fourth-quarter earnings loser
Target (NYSE:TGT) earnings slid a whopping 46% after the 40-million-credit card security breach in November -- that $520 million drop in profits is the result of a 3.8% sales dip.
 
The worst about this all for Target is timing. Not only did the credit card fiasco occur the week of Black Friday, amplifying the number of customers affected, but it also extended a dark curtain of mistrust over the retailer during the all-important holiday season -- the 5.5% fall in overall transactions at Target was the largest its suffered since it began reporting the statistic in 2008.
 
So how's Target dealin'? According to the bigwig execs running the earnings report, Target said it plans to "absorb breach-related costs," which could reach hundreds of millions of bucks in 2014. The first step to doing so? Cutting back on their share buyback plan for the time being.

3. Mergers, acquisitions, deals, and IPO drama
In the world of suits, Jos. A. Bank Clothiers (NASDAQ:JOSB) rejected the takeover offer from competitor Men's Wearhouse (NYSE:MW), which was for $1.8 billion plus six free jackets -- though Joseph says it's still open to a merger. J. Crew got pseudo-hipster investors nationwide drooling on rumors that it was exploring IPO options with several major banks. And Netflix (NASDAQ:NFLX) struck a Hollywood-worthy deal with cable mammoth Comcast to use its massive broadband network, improving streaming service to its 33 million American subscribers.

4. The Fed admits winter hurt the economy ...
For all of 2014 so far, the two things we've referenced the most are our support of the U.S. men's ice hockey team and the absurd degree to which winter temperatures have been affecting U.S. econ data, from manufacturing to the housing market to retail sales. Well, on Thursday, in testimony to the Senate Banking Committee that had ironically been delayed because of the Valentine's Day blizzard, new Federal Reserve Chairwoman Janet Yellen discussed how multiple polar vortexes had affected consumers -- and slightly slowed the New Year's economy.

5. ... And econ data was mixed
Speaking of econ data, most economic indicators for the U.S. have been unimpressive over the past six weeks, despite all the momentum of 2013. This week, however, featured a mixed batch of reports that surprised most investors. On the downside, U.S. fourth-quarter GDP for the final three months of 2013 was revised down from 3.2% growth to a 2.4% pace, while consumer confidence levels slipped slightly in January, according to research firm The Conference Board. And while December home prices surged more than 13%, making 2013 the biggest annual gain since 2005, sales of new homes unexpectedly jumped 9.6% when analysts had expected a slowdown.

What MarketSnacks is checking out this week:
  • Monday: Motor vehicle sales, ISM Manufacturing Index
  • Tuesday: Fed President Jeffrey Lacker speaks; earnings: RadioShack
  • Wednesday: The Fed's Beige Book; ADP February employment report; earnings: Adidas
  • Thursday: Weekly jobless claims; earnings: Skullcandy
  • Friday: February non-farm payrolls report

MarketSnacks Fact of the Day: Shock Top is America's fastest growing "craft beer," with a 64% jump in production between 2011 and 2012 -- but it's made by the world's biggest brewer.

As originally published on MarketSnacks.com

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