Vipshop Holdings (VIPS) is making another new 52-week high today. In case you're not familiar, VIPS is a Chinese online discount retailer that specializes in selling luxury brand name products via what are known as "flash sales," which are events where VIPS will offer deeply discounted merchandise for a short period of time.
VIPS' largest category is apparel but they also focus on fashion items, shoes and cosmetics. Smaller categories include home goods, leisure travel packages and other lifestyle products. VIPS uses mostly a consignment business model so they do not purchase most of the merchandise they sell. By not purchasing inventory upfront, this allows VIPS to use very little working capital. Its customer breakdown is 75% female and 25% male. Of note, VIPS' cosmetics business got a lot bigger when VIPS acquired a 75% stake in Lefeng.com, an online cosmetics retailer, in February 2014. While VIPS specializes in apparel, the goal was to broaden VIPS' categories.
The company has been capitalizing on the lack of large online discounters in China, as this is a new concept there. The stock made its IPO debut in March 2012 and after months of doing nothing it started moving in the fall of 2012 and has not looked back. In fact, the stock has more than doubled in the past year alone.
In 2014, revenue increased by 122.4% to US$3.77 billion, primarily driven by growth in the number of new active customers, total active customers, total orders, as well as the increasing revenue contribution from the mobile platform. The number of active customers for the full year of 2014 increased by 150% to 23.6 million from 9.4 million in the prior year. The number of total orders for the full year of 2014 increased by 118.3% to 107.3 million from 49.2 million in the prior year.
In sum, VIPS has been posting some impressive quarters which is why the stock has been so strong. However, this is a thin margin business with non-GAAP operating margins in the mid single digits and margins have been compressing in recent quarters. Looking ahead, VIPS has not set a date for reporting Q1 results yet but they are usually late in the cycle so figure around mid-May. The company has already guided to Q1 revenue of US$1.25-1.30 billion.
Restaurant Brands Int'l reports mixed Q1, TH/BK comparable sales increase
Restaurant Brands Int'l (QSR 42.54, +0.97) is trading higher by about 2.3% this afternoon following the company's mixed Q1 results. QSR reported Q1 earnings per share (EPS) of $0.18, which was better than expected, on revenues of $932 million.
This report marks the first following the Burger King and Tim Hortons combination. The deal was approved in early December, and as a result, the first three month period following the closing of the deal just ended.
In terms of the Q1 breakdown, Burger King reported total revenues of $249.6 million, growth of 3.6% on a year-over-year basis mainly due to comparable sales growth and the opening of 710 new restaurants for the trailing twelve month period, offset by unfavorable foreign exchange to the tune of $14.5 million. Comparable sales in the quarter were up 4.6% on system wide sales growth of 9.6% compared to last year's period.
Tim Hortons saw Q1 total revenues of $682.4 million, a 1.2% decline over last year primarily due to foreign exchange headwinds. System wide sales at TH grew 8.1% in Q1 on 53 net new restaurants in the quarter. Comparable sales were up 5.3% and about 370 basis points versus last year.
In sum, while TH represents the majority of sales now, the opening of more stores under the BK namesake shows that more revenue yielding locations are in the works in the United States. Shares are trading higher today, as is the broader market, (S&P 500 2121.27, +3.58).
Marine Transportation Play Scorpio Tankers Trades 2% Higher Following Earnings
Scorpio Tankers (STNG 10.25 +0.20) is trading this morning following its quarterly earnings results.
Scorpio Tankers is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 67 tankers (12 LR2 tankers, 15 Handymax tankers, and 40 MR tankers).
The company owns and/or operates a fleet of modern product tankers. Its ships are "downstream" in the petroleum supply chain, distributing products like gasoline, heating oil, and fuel oil from refineries to end users.
The company reported first quarter earnings of $0.24 per share, excluding non-recurring items, which topped expectations. On the top line, revenues rose 109.5% year/year to $160.7 million, which also beat expectations.
For the three months ended March 31, 2015, the Company recorded net income of $40.7 million compared to net income of $53.3 million for the three months ended March 31, 2014. TCE revenue increased $85.9 million to $158.6 million.
This increase was driven by an increase in the average number of operating vessels (owned and time chartered-in) to 84.0 from 50.7 for the three months ended March 31, 2015 and 2014, respectively, along with an increase in time charter equivalent revenue per day to $21,138 per day from $15,906 per day for the three months ended March 31, 2015 and 2014, respectively.
Spot rates across all operating segments improved during the first quarter as fundamentals in the product tanker market remained strong. These fundamentals were driven by increased refining capacity in the Middle East and India along with improved refining margins worldwide which have had a resultant, positive impact on the demand for our vessels. Furthermore, we have benefited from the collapse in crude oil prices through the consequent decline in bunker costs, positively impacting our TCE revenue. Time charter equivalent, or TCE revenue, a non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges).
TCE revenue is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management.
On the cost side, vessel operating costs increased $24.4 million to $37.5 million from $13.1 million for the three months ended March 31, 2015 and 2014, respectively. This increase was primarily driven by an increase in the Company's owned fleet to an average of 63.0 vessels from 20.2 vessels for the three months ended March 31, 2015 and 2014, respectively.
WTI Crude Oil Prices Start The Week Off Lower Despite More Bullish Bets From Speculators
The dollar index is trading higher this morning, which is helping weigh on some commodities.
However, this isn't affecting metals such as gold, silver and copper futures, which are all trading higher in current trade.
Copper futures spiked overnight, around 3am ET and are now holding modest gains at +0.3% at $2.76/lb. Gold and silver have been trading near today's high the whole day so far (overnight/early morning trade), largely trading in a tight, consolidated pattern.
Silver hit today's current high in overnight trade at $15.84/oz and is now +1.3% at $15.84/oz. June gold futures hit today's high in recent trade at $1187.10/oz, after a small extension of gains, and is now +0.9% at $1185.70/oz. Platinum futures are now +0.6% at $1128.60/oz, while palladium futures are +0.8% at $776.00/oz.
In the energy space, on the other hand, natural gas futures have been in the red all day so far and WTI crude oil has been trading around the flat line and in negative territory in recent trade, mostly in the red, despite another week of bullish COT data.
On Friday, the Commodity Futures Trading Commission's (CFTC) released its weekly Commitment of Traders report, which showing that crude oil speculators boosted bullish bets for WTI crude oil for a fourth consecutive week.
May natural gas futures are now -2.9% at $2.46/MMBtu, while June crude oil is -0.6% at $56.83/barrel.
Shares of Applied Materials (AMAT 20.22, -1.58, -7%) have tumbled 7% prior to the open this morning after it announced plans to terminate its business combination agreement with Tokyo Electron Limited (TOELY 13.10, -3.07, -19%).
The deal, initially announced back in Sept 2013, was expected to provide cost savings of $250 million in the first year after completion. However the companies had significant regulatory hurdles to jump before the merger could close. This led to delays in the closing and then ultimately to today's announcement, which came after the U.S. Department of Justice advised the parties that the proposal submitted to all regulators would not be sufficient to replace the competition lost from the merger. Based on this decision by the DoJ, the companies no longer believe the completion of the merger is a realistic prospect.
In addition to the termination of the business agreement, AMAT also announced that its Board of Directors has approved a $3 billion share repurchase program, to be completed over the next three years beginning in the third quarter of fiscal 2015.
Marvell Technology Warns of Q1 Revenue Shortfall
When the closing bell rang on Friday, both the Nasdaq Composite and S&P 500 had closed at record highs. Semiconductor company Marvell Technology Group (MRVL 14.31), however, had some unfinished business. After the close, the company made it known that it expects to report fiscal first quarter revenue well below its prior expectation.
Specifically, Marvell anticipates its first quarter revenue will now range between $710 million and $740 million. When the company reported its fiscal fourth quarter results in mid-February, it was expecting first quarter revenues between $810 million and $830 million (the midpoint of which was below analysts' average expectation at the time).
The downward revision was pinned primarily on weaker than expected PC and storage markets and lower than expected emerging market demand.
Marvell Technology is a fabless semiconductor provider of high-performance application specific standard products. Its expertise is the development of complex System-on-a Chip and System-in a Package devices. According to the company's 10K filing, its product offerings are primarily in three broad end markets: storage (47% of revenue), mobile and wireless (29% of revenue), and networking (18% of revenue). Other categories comprised the remaining portion of the company's total net revenue of $3.71 billion for fiscal 2015.
Its two biggest customers in fiscal 2015 were Western Digital (WDC 99.75) and Seagate Technology (STX 58.34), which accounted for 20% and 13% of total net revenue, respectively.
Avago Technologies (AVGO 119.50) is its major competitor in the storage business. For its mobile and wireless segment, Broadcom (BRCM 44.46) and Qualcomm (QCOM) are among its main competitors. Major competitors in its networking business include Broadcom, Intel (INTC 32.08), and Freescale Semiconductor (FSL 38.86), the latter of which is being acquired by NXP Semiconductors (NXPI 95.33).
Marvell, which is down 1.3% year-to-date and 9.9% over the last 52 weeks, will release its first quarter results on May 21. In conjunction with the revenue warning, Marvell said it is withdrawing all other financial outlook expectations and will update them on its earnings conference call.
MRVL is down 4.9% in pre-market trading.
Expected IPO Pricings April 27 - May 1
The following IPOs are expected to price and begin trading this week:
Monday, April 27