• GRIT
  • Posts
  • Nailing Down The Numbers

Nailing Down The Numbers

Home Depot, Amazon Gaming, Stellantis

Good Morning!

Get ready! We have an exciting newsletter for you. Here’s what is going on today:

👉 Home Depot beats estimates 🏠

👉 Amazon restructures gaming division 🎮

👉 Stellantis shifts EV strategy 🚗

Let’s get into it!

HOME DEPOT: Unpacking Mixed Earnings

Home Depot's recent earnings report revealed a slowdown attributed to weaker sales, yet the company still managed to surpass the expectations of Wall Street analysts. Home Depot mentioned that smaller improvement jobs are still showing robust performance, which forms a significant portion of its business operations.

The company experienced a 3.1% decline in sales at stores open for at least a year, primarily due to a slowdown in the housing market, which has been a challenging factor for the business.

Source: Business Journal

The retailer was cautious about its prospects in the upcoming months, refining its projections for the full year. Home Depot now expects its annual sales to decrease by 3% to 4% compared to the previous year, a slight adjustment from its earlier forecast of a 2% to 5% decline. Additionally, the company predicts that its earnings per share will decrease by 9% to 11%, which is a narrower range than its previous estimate of a 7% to 13% fall.

According to government data, housing starts in the first nine months of this year have fallen by 12%.

Earnings:

EPS: $3.81 vs. $3.76 expected

Revenue: $37.7 billion vs. $37.6 billion expected

🎯 GRIT TAKE: From 2020 to 2022, large numbers of consumers… upgrade to VIP to read the full GRIT take. Click below!

AMAZON: Gaming Division Overhaul

Amazon's strategy shift in its gaming division was detailed in a recent internal memo, as first reported by CNBC. On Monday, the company announced a significant restructuring, which includes discontinuing its Game Growth and Crown Channel initiatives. This realignment is part of Amazon's new focus on developing and launching its own game titles, moving away from supporting streaming and third-party games.

The restructuring will result in the termination of more than 180 jobs within the Amazon Games division. Christoph Hartmann, the vice president of Amazon Games, outlined in the memo to employees that the company's future efforts will concentrate on upcoming projects. These include games like "Throne and Liberty" and "Blue Protocol," as well as anticipated titles, such as "Tomb Raider" and the "The Lord of the Rings" series. This marks a significant pivot in Amazon’s gaming strategy.

Source: Protocol

Recently, Amazon has undergone the most significant layoffs in its history, eliminating 27,000 positions since the previous fall under the leadership of CEO Andy Jassy. This move is part of a broader cost-reduction effort by Jassy, who has been steering the company through a period of economic challenges, including rising interest rates and inflation. In addition to the job cuts, Amazon has implemented a freeze on corporate hiring and has been actively seeking ways to reduce expenses across various departments of the company.

STELLANTIS: Shift in EV Strategy

Stellantis, Chrysler's parent company, has embarked on a significant workforce reduction effort in its North American operations, seeking to cut costs amid industry-wide economic challenges. On Monday, the company announced its new strategy: offering voluntary separation packages to a substantial segment of its U.S. white-collar workforce. This initiative targets 6,400 of the 12,700 non-bargaining unit employees in the U.S., specifically those who have been with the company for five or more years.

This move by Stellantis reflects a broader trend in the U.S. automotive sector, where major players are adjusting their strategies in response to economic uncertainties and the imperative to invest in new technologies, such as electric vehicles.

Source: freep

As part of this industry-wide shift, other major automakers like General Motors and Ford Motor have also reduced their salaried staff over the past year, highlighting a collective effort to streamline operations and manage expenses.

Headlines You Need To Know: 🎙

  • Inflation cooled to 3.2% last month

  • The world’s best and brightest are moving to these countries

  • Apple gets 36% of Google's revenue in search deal

  • House Speaker Johnson predicts bipartisan spending bill

  • UBS sees tons of rate cuts next year

  • British fintech Wise sees a 280% boost in profits due to interest rates

  • Airlines are feeling the impact of the Israel-Hamas war

  • Look past gas prices for the state of inflation

  • With interest rates above 9%, small businesses hit the brakes

  • Why big oil is combining agriculture and solar energy production 

Consumer Banking Woes 💳

Goldman Sachs just openly admitted to a massive failure. In 2016, Goldman Sachs launched a consumer banking division with the goal of creating a new revenue stream that could even out the rocky nature of its trading business. It makes sense, right? One of the most famous investment banks ever would be successful in consumer banking. Wrong. Goldman launched their Marcus Savings account in 2017, but it never gained any traction. So, Goldman turned to the largest company in the world and launched the Apple Credit Card. Unfortunately, the partnership didn’t go as planned, and Goldman lost $1 billion.

Source: Payments Journal

Their plan the whole time was to have a plethora of card partnerships, but after the Apple flop, only General Motors wanted to do business with them. Goldman is on the verge of closing the doors on their venture into consumer banking after an almost $5 billion loss.

Chart of the Day

📊 The Performing Stocks Over The Last 20 Years

Monster Beverage leads the way with a 39% annualized return

Source: CNBC

GRIT Meme of the Day 😂

Tag GRIT Capital on social media for a chance to be featured in our meme or Tweet of the day in our GRIT daily newsletter! 👇

Source: @wallstreetoasis

Don’t follow us on social yet? Follow us on Instagram, TikTok, and Twitter.

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Grit is a publisher of financial information, not an investment advisor. Grit does not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient. Grit does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.

THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. INVESTORS SHOULD OBTAIN INDIVIDUAL INVESTMENT ADVICE BASED ON THEIR OWN CIRCUMSTANCES BEFORE MAKING AN INVESTMENT DECISION

No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and Grit undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.

Grit does not accept any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.

By using the Site or any related social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

If you have any questions please contact us at  [email protected]

Reply

or to participate.