☕️ Starbucks Falls 12%

1) Starbucks Sales Drop 2) AMD Expects $4B in AI Chip Sales, 3) Hermès Leads In The Luxury Race and more!  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

May 01, 2024   |   Read Online Together with Happy Wednesday! If you've been enjoying my emails, please be sure to move the newsletter to your primary inbox, "star" this email, and drop a 1-word reply (like "thanks"). Doing this ensures you'll always receive my newsletter. Plus, it improves sender reputation so email providers like Gmail don't send my newsletters to your junk folder. Following this Friday's send, the newsletter schedule will be changing! I'll be shifting back to a weekly release every Sunday, beginning May 12th. I'm also be experimenting with a fresh format over the next few weeks that I think you'll really enjoy. Stay tuned! Some key data bites you should know:  McDonald's $MCD saw global comparable sales increase 2% in Q1. U.S. oil and gas deals hit a record $51B in Q1. Roughly a third of all S&P 500 stock trades are now executed in the last 10 minutes of the session. Robinhood $HOOD saw $81B in equity trading volume in February, it's largest since November 2021. Hertz $HZ is trying to sell all of its 30,000 Tesla EVs by the end of the year. Domino's $DPZ global retail sales grew 7.3% in Q1. Amazon's $AMZN Q1 net income tripled from a year ago. Apollo $APO is accused of setting up a $20B human life wagering scheme. Snapchat $SNAP Daily Active Users hits 422M in Q1 2024. SoFi's $SOFI total net revenue increased 37% to $645M in Q1. In today's newsletter: ☕️ Starbucks Sales Drop 💾 AMD Expects $4B in AI Chip Sales 👜 Hermès Leads In The Luxury Race Let's dive right in! More people are making their coffee at home. Starbucks stock plummeted 12% after hours last night following the release of its Q2 FY24 earnings results. Here are some key numbers: 🔴 Earnings: $0.68 vs. $0.79 Est. 🔴 Revenue: $8.56B vs. $9.13B Est. 🔴 Global Same Store Sales: -4% vs. +1% Est. The numbers speak for themselves. This was a quarter to forget for Starbucks. Year over year, net revenue dipped by 2%, earnings dropped by 7%, and operating margin shrank by 140 basis points to 12.8%. The most telling sign was the fall in comparable store sales across the board—a crucial metric that tracks consistent revenue across established locations. Looking ahead, the outlook isn't much brighter. Starbucks anticipates low single-digit declines to flat comparable store growth for the full year 2024. This forecast, combined with expected low single-digit revenue growth and stagnant operating margin and EPS, had investors running to the woods. With the stock now hovering below $80 and trading at roughly 20x earnings, it's not exactly "cheap," especially given the flat earnings projection for this year. However, it is trading at a discount compared to its historical 10-year median PE ratio of 31x, per YCharts. The strength of Starbucks' brand and global presence will likely always bolster the stock price, adding a premium to the valuation. So the question to ask now is can Starbucks reverse course and re-accelerate growth in the short term? What happens when a stock that has surged over 75% in the last year meets or slightly beats expectations? It often drops—and that's precisely what happened to AMD. Shares fell about 7% following the release of their Q1 FY24 earnings, even though the numbers were good: 🟢 Earnings: $0.62 vs. $0.61 Est. 🟢 Revenue: $5.47B vs. $5.46B Est. ⚪️ Q2 Revenue Outlook: $5.7B vs. $5.7B Est. Revenue grew 2% YoY, driven by strong performances in AMD's data center and client segments, which offset slower growth in gaming and embedded segments. CEO Lisa Su announced that AMD is on track to generate $4B from AI chip sales in 2024, an uptick from the $3.5B forecasted in January. The company's MI300 chip has already achieved over $1B in cumulative sales since its launch in Q4 2023. Despite these positive indicators and a slight beat this quarter, along with a bullish outlook for AI chip sales, investors were expecting more, leading to the stock's decline in after hours trading. The demand for those rare Birkin bags isn't slowing down. Hermès recently reported a robust 17% increase in first-quarter sales, reaching €3.8B. Even more impressive — every geographical area Hermès operates in recorded double-digit growth. Asia (excluding Japan) rose by 14%, Japan itself surged an exceptional 25%, the Americas increased by 12%, and Europe (excluding France) grew by 15%. Driving this impressive revenue spike were primarily two segments: Leather Goods and Saddlery and Ready-to-Wear and Accessories. These segments expanded by 20% and 16% YoY, respectively, and together they make up nearly 71% of Hermès' total TTM revenue. With these numbers, Hermès is winning in the luxury race. In comparison, LVMH recently reported a modest first-quarter sales growth of 3%, and Kering, the parent company of Gucci, saw Q1 revenue decline 11%. 📚 Recommended Reading Written by anonymous wall street investors and bankers, The Wall Street Rollup is the best place to find investing, finance, and M&A news that you can read within 5 minutes. The writers of the Wall Street Rollup are on a mission to upgrade your 5 minute newsletter. Sign up for free to get a 2x/week newsletter with all the stories you need to get ahead below👇 Subscribe Automatically Here 🗣️ CEO Skirmish. Facebook $META co-founder Dustin Moskovitz calls Tesla $TSLA "Enron," with Elon Musk responding by calling him an idiot - YF 📱 iOS 18 Gen AI. Apple $AAPL is reengaging with OpenAI for potential iPhone generative AI features - BB 🎬 Media Shakeup. Paramount $PARA CEO Bob Bakish will be stepping down and replaced by three executives - CNBC 🇨🇳 Elon Secures A Win. Tesla $TSLA was given the green light to roll out FSD in China - WSJ 🛒 Brand Launch. Walmart launched a new, affordable private brand called Bettergoods - WMT Notable Companies Reporting Earnings This Week: Monday (4/29): NXP Semiconductors $NXPI, Welltower $WELL, ON Semi $ON, MicroStrategy $MSTR, Domino's Pizza $DPZ, SoFi $SOFI Tuesday (4/30): Amazon $AMZN, Eli Lilly $LLY, Coca-Cola $KO, AMD $AMD, McDonald's $MCD, Stryker $SYK, Starbucks $SBUX, PayPal $PYPL, 3M $MMM, Super Micro $SMCI, Pinterest $PINS Wednesday (5/1): Mastercard $MA, Qualcomm $QCOM, Pfizer $PFE, ADP $ADP, CVS Health $CVS, DoorDash $DASH, Kraft Heinz $KHC Thursday (5/2): Apple $AAPL, Novo Nordisk $NVO, Linde $LIN, Coinbase $COIN, Block $SQ, DraftKings $DKNG Friday (5/3): Hershey $HSY, XPO $XPO All of the companies that are reporting earnings next week can be viewed here. 📣 A Message From Our Sponsor Make Your Money a Multitasker. 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Major Trades Published 04/22 - 04/30 Buys MSCI ($MSCI) Insider: Henry Fernandez (Chairman & CEO) # of Shares Purchased: 13,000 $ Amount: $6,056,955 SEC Forms: [1] Insider: Baer Pettit (President & COO) # of Shares Purchased: 7,500 $ Amount: $3,445,575 SEC Forms: [1] Loar Holdings ($LOAR) Insider: Taiwo Danmola (Director) # of Shares Purchased: 71,429 $ Amount: $2,000,012 SEC Forms: [1] Insider: Margaret McGetrick (Director) # of Shares Purchased: 71,429 $ Amount: $2,000,012 SEC Forms: [1] Heartland Express ($HTLD) Insider: Michael Gerdin (CEO) # of Shares Purchased: 190,696 $ Amount: $1,928,489 SEC Forms: [1] Sells Vertiv Holdings ($VRT) Insider: Philip O'Doherty (Managing Director) # of Shares Sold: 3,000,000 $ Amount: $280,929,588 SEC Forms: [1] Jefferies Financial Group ($JEF) Insider: Richard Handler (CEO) # of Shares Sold: 1,500,000 $ Amount: $65,250,900 SEC Forms: [1] Chipotle ($CMG) Insider: Brian Niccol (Chairman & CEO) # of Shares Sold: 6,406 $ Amount: $20,408,980 SEC Forms: [1] How was today's newsletter? 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