Mortgage rates continue to rise. The average 30-year fixed-rate loan has jumped up to 6.34%, the highest national average we've seen since Sept. 2003. Rates have now risen for eight consecutive weeks.
Should you panic if you're in the market for a home? Absolutely not. Interest rates are still historically low, and you still have good options for refinancing if you haven't jettisoned a higher-rate loan yet.
In today's Motley Fool Take:
- Another Wallop From Wal-Mart
- Shameless Plug: Motley Fool Hidden Gems
- Disney's Big Cheese
- Discussion Board of the Day: Disney
- Tiffany Sparkles
- Quote of Note
- Ann Taylor's Class Act
- More on Fool.com Today
An other Wallop From Wal-Mart
By Seth Jayson
Another day, another buck. Well, another few billion bucks if you happen to be Wal-Mart
Today's first-quarter earning release flaunts more record earnings, continuing the same incredible run turned in last year. As W.D. Crotty said then, double-digit revenue and earnings increases are unbelievable in a company that's already as huge as this one. For this quarter, the revenue upswing was 14.2% over last year's Q1, and earnings per share reached $0.50, a 22% advance.
How does the company keep doing it? Well, little things like a 0.06% improvement in gross margin certainly don't hurt. Doesn't sound like much? Well, multiplied by the quarter's $64.8 billion in sales, that fraction of a percentage means a lot more profit.
The headlines today are going to trumpet CEO Lee Scott's remarks about inflation, and this only adds to the dissonant chorus of worrywarts who scream that the sky is about to fall. Wal-Mart investors may be among those who can safely ignore this warning.
Not only is inflation likely to push shoppers to discounters like this one, as well as Target
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By Rick Aristotle Munarriz (TMF Edible)
It's been a rough few months for Disney
Profits of $0.26 were up from $0.15 a year ago. Revenues climbed by 11% to hit $7.2 billion. Despite a dip in its movie studio business after a string of celluloid clunkers, the company reported strong gains everywhere else. From higher attendance at theme parks to a robust season in cable operations, it was a refreshingly vibrant report.
Disney is looking to earn at least $0.98 a share this fiscal year with double-digit annual profit growth over the next three years. The latter is more important than the former. After all, the company earned $0.97 a share in 2001. Pundits will expect more. Disney should be able to deliver more.
But growing beyond this year is where it's really at, and it's gains beyond past levels that will silence the naysayers. If the company keeps this up, bashers of CEO Michael Eisner will clear out faster than Animal Kingdom patrons facing an early afternoon thunderstorm. And if you don't know what I'm talking about, trust me, it's quite the stampede.
Do you think Disney is on the right track for a turnaround? Should Eisner stay or should he go? All this and more -- in the Disney discussion board. Only on Fool.com.
By Seth Jayson
It was a tough act to follow, those dazzling full-year numbers that Tiffany & Co.
Recent retail numbers and some "sky is falling" commentary have cast a shadow over the prospects for America's buying spree, but things haven't cooled too much for Tiffany. This quarter, the figures are still plenty shiny, even if they don't sparkle quite the same.
For Q1, the high-end retailer posted a 15% revenue increase, bringing in $457 million. But foreign-exchange gains were responsible for a big chunk of the performance, leaving the constant-dollar increase at 11%. Comps were up 9%, which is better than just about anyone in the retail game these days. Earnings polished up to $0.27 per share, 12% better than the prior year.
As during last quarter, sales in the good, old U.S.A. outpaced the rest of the world, with 23% growth and an incredible comps improvement of 20%. If there's another economic dip coming up, clearly it hasn't been much of a worry to the folks who shell out $1,800 for a graduation gift like the "cushion bangle" or $6,300 for Tiffany Lace sunburst earrings.
Japan was the soggiest performer once again -- which might make shareholders wonder about the wisdom of planning two more stores for the country -- and overall, international sales had a drop in comps, and only a 2% rise in constant-dollar revenues.
Management's full-year prediction for 12% growth in net earnings was a stitch below the Street's expectations, and the stock received the jittery market's usual 5% haircut on that news. Even so, shares trade at a forward P/E near 22, which looks fair, given the outlook. Conservative guidance from one of the world's best brand names is no reason to run for the exits. But investors with cash burning a hole in their trousers -- who don't want to roll it on those sunburst earrings -- will probably find better value elsewhere.
"I don't know the key to success, but the key to failure is trying to please everybody." -- Bill Cosby
Ann Taylor's first-quarter earnings rocketed 78% to $31.8 million, or $0.65 per share. Net sales increased 23% to $433.2 million, while same-store sales garnered double-digit growth, rising 12%. With its financials, the company attached its cash flow statement -- a move Fools appreciate, as many companies neglect to include it until they file with the SEC.
The lower-priced Loft division has been the real story here for quite some time now; this quarter, the trend continued. These days, Loft represents 43% of sales, and for first-quarter 2004, its same-store sales jetted 25% higher.
While the big question has been what Ann Taylor stores could do to emulate the success of Loft, some of the initiatives -- including de-emphasizing suits and moving towards versatile separates that are suitable for any event -- seem to be panning out, with same-store sales improving compared to last year.
Ann Taylor's gross margins increased to 58.4% from 53.7% last year. One of the major reasons was a reduced dependence on promotions and sales. In fact, seven promotional events this time last year were pared down to three this year. You've got to like it when shoppers are driven to pay full price instead of waiting for the markdowns. It's a sign that the retailer is tuned in to its female clientele's taste for style and price.
With Loft's continued, maybe even increasing, popularity, where, oh where is Ann stealing customers from? According to the company's conference call (transcript courtesy of CCBN StreetEvents), market research has indicated that new customers are defecting from Gap
Ann Taylor didn't up guidance for upcoming quarters, calling for an expectation of high single-digit same-stores growth. That's not too surprising. Ann Taylor's comparisons to the first quarter of last year were fairly easy, and the going will get steeper as this year progresses, based on the anniversary of last year's building momentum.
Investors weren't charmed; the stock was down nearly 2% in recent trading. Maybe they were expecting a little bit more excitement -- after all, Ann Taylor has upped guidance repeatedly over recent months. Also, while it was an attractive quarter, it didn't quite match its rather torrid fourth-quarter showing. The stock seems to be stuck in an awkward phase, 17% down from its 52-week high achieved in March. Though the company faces some tough comparisons coming up, after all the recent success, you've got to wonder if it's a good time to ogle Ann.
Alyce Lomax does not own shares of any of the companies mentioned, but she's contributed to Loft's sales over the past several months.
Charly Travers has a couple of ways to Avoid Biotech Land Mines.... Not that we're calling you good for nothing, but Seth Jayson has 6 Stocks for the Lazy Investor.... Everyone should have a couple of blue-chip stocks to round out a diverse portfolio. Selena Maranjian's got some suggestions in Blue Chips Redux.... Ah, the age-old debate: Telecom vs. Cable. And last but not least, Starbucks Chairman Howard Schultz speaks on his best and worst decisions in A Starbucksian Epiphany.
In other news:
- Cosi's Cookin'
- Microsoft's Wireless Affair Ends
- Keeping CEOs and Chairmen Apart
- Detroit's Quality Pickle
For a list of all our stories from today, see our Today's Headlines page.
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