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Tuesday January 31, 2023



Rivian Announces Quarterly Earnings

Rivian Automotive Inc. (RIVN) posted its fourth quarter and full-year earnings report on Thursday, March 10. The electric automotive company's stock fell 7.5% following the release of the report.

Revenue came in at $54 million for the quarter and $55 million in 2021. The new electric car company recently began production of customer vehicles in late 2021, delivering 900 vehicles during the quarter which constituted most of Rivian's activity for the year.

"Rivian and the electric vehicle ("EV") industry had a truly unprecedented year in 2021," said Rivian founder and CEO, RJ Scaringe. "We are at the tipping point of EV adoption as the trillions of miles traveled each year across the planet transition to EVs. Excitement and interest toward EVs continues to grow as consumers and commercial customers increasingly understand EVs offer a compelling experience, performance, operating cost, and environmental benefits."

The company posted net losses of $2.46 billion for the quarter, compared to $353 million during the same quarter last year. For the full year, the company reported net losses of $4.69 billion compared to $1 billion in 2020.

Rivian noted in its earnings release that it would be scaling back its production of vehicles in 2022. The company planned on delivering more than 50,000 vehicles in 2022, however, supply chain constraints have prevented the company from obtaining the necessary parts and materials required to manufacture that number of vehicles. As such, the company now expects to produce 25,000 vehicles for the year and anticipates operating losses to reach upwards of $4.75 billion for 2022.

Rivian Automotive Inc. (RIVN) shares ended the week at $45.60, up 32.3% for the week.

Ulta Beauty Reports Earnings

Ulta Beauty Inc. (ULTA) reported its fourth quarter and full-year earnings report on Thursday, March 10. The cosmetics and fragrance company's shares dropped 3% following the report's release.

Ulta reported quarterly revenue of $2.73 billion, a 24% increase from $2.2 billion reported in the same quarter last year. This exceeded analysts' estimates of $2.69 billion in revenue. Full-year revenue came in at $8.6 billion compared to $6.2 billion from the prior year.

"Our fiscal year ended with better-than-expected performance, reflecting excellent, enterprise-wide execution against our fourth quarter plans as well as stronger consumer demand and the strength of Ulta Beauty's differentiated model," said Ulta Beauty CEO, Dave Kimbell. "I want to express my sincere appreciation to all Ulta Beauty associates who continue to provide exceptional care and service to our guests and to each other, while successfully navigating pandemic-related challenges and delivering strong results for all our stakeholders."

The company reported net income of $289.4 million or $5.41 per adjusted share for the quarter compared to $171.5 million or $3.03 per adjusted share during the same quarter last year. For the full year, the company reported net income of $985.8 million compared to $175.8 in 2020.

The company's growth was felt largely in its cosmetic segment, which accounted for 43% of Ulta's total sales in 2021. In August, the company partnered with Target to open mini-shop locations within Target stores. Ulta has since opened more than 100 mini-shops and plans to open an additional 250 locations this year. Ulta's partnership with Target has helped grow its loyalty program, Ultamate Rewards, which added 4 million members during 2021 for a total of 37 million members.

Ulta Beauty Inc. (ULTA) shares ended at $391.23, up 5.8% for the week.

Red Robin Releases Earnings

Red Robin Gourmet Burgers, Inc. (RRGB) released its fourth quarter and full-year earnings report on Thursday, March 10. The casual-dining restaurant chain's stock fell 4.8% following the release of the report.

The company reported revenue of $283.4 million during the quarter. This was an increase of 40.1% year-over-year from $201.1 million. Total revenue for the year was $1.2 billion, an increase from $868.7 million in 2020.

"As the Omicron variant has receded in recent weeks, we are seeing encouraging signs that our business is beginning to normalize with improved staffing levels across our system, growing dine-in sales and sustained off-premises volumes," said Red Robin CEO, Paul J. B. Murphy III. "We remain intently focused on continuing to strengthen our staffing levels and reducing operational complexity to deliver a memorable quality Guest experience and meet the increasing level of demand as Guests are returning to our restaurants."

Red Robin reported a net loss for the quarter of $21.3 million. This was a decrease net loss from the prior year's quarter of $39.3 million.

The restaurant chain's increased revenue was attributed to a 26.6% increase in guest count and a 13.5% increase in average guest check during the quarter. The increase in average guest check resulted from a 4.2% increase in pricing. The decrease in the company's net loss from last year was due to an $81.1 million increase in restaurant revenue, along with restaurants returning to fuller capacity as the Omicron variant continues to diminish.

Red Robin Gourmet Burgers, Inc. (RRGB) shares ended the week at $17.98, up 10.5% for the week.

The Dow started the week at 33,000 and closed at 34,755 on 3/18. The S&P 500 started the week at 4,202 and closed at 4,463. The NASDAQ started the week at 12,795 and closed at 13,894.

Treasury Yields Rise

U.S. Treasury yields climbed throughout the week as the Federal Reserve approves its first interest rate increase to fight rising inflation. Yields continued to rise on Friday despite unemployment numbers returning better-than-expected.

On Wednesday, the Federal Reserve announced that it will be raising interest rates for the first time since 2018, bringing the benchmark rate between 0.25%-0.5%. The Federal Reserve's decision to raise interest rates comes as inflation continues to rise at a record pace during the pandemic.

"By raising interest rates, the Federal Reserve has begun the process of unwinding their pandemic-era stimulus measures in an effort to tame inflation," said chief financial analyst at Bankrate, Greg McBride. "This isn't a one-and-done but the start of a series of rate hikes for the remainder of this year and well into next."

The benchmark 10-year Treasury note yield opened the week of 3/14 at 1.998% and traded as high as 2.248% on Wednesday. The 30-year Treasury bond yield opened the week at 2.357% and traded as high as 2.538% on Wednesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment insurance totaled 214,000. This was better than market estimates of 220,000 and was a decline from the prior week's revised number of 229,000.

"This is a sign that our economy is going in the right direction and that we are heading into a year of solid job gains," said CEO of Healthy Hippo, Ashley Paterson. "I believe that this positive trend will continue and we will keep seeing an increased demand of labor given the huge appetite of people to go back to their ‘normal lives' after what we have experienced in the last two years."

The 10-year Treasury note yield closed at 2.15% on 3/18, while the 30-year Treasury bond yield was 2.42%.

Mortgage Rates Increase

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, March 17. The mortgage rates saw an increase this week due largely to the Federal Reserve raising interest rates in an effort to ease rising inflation.

This week, the 30-year fixed rate mortgage averaged 4.16%, up from last week's average of 3.85%. Last year at this time, the 30-year fixed rate mortgage averaged 3.09%.

The 15-year fixed rate mortgage averaged 3.39% this week, up from 3.09% last week. During the same week last year, the 15-year fixed rate mortgage averaged 2.40%.

"The 30-year fixed-rate mortgage exceeded four percent for the first time since May of 2019," said Freddie Mac's Chief Economist, Sam Khater. "The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year. While home purchase demand has moderated, it remains competitive due to low existing inventory, suggesting high house price pressures will continue during the spring homebuying season."

Based on published national averages, the savings rate was 0.06% as of 2/22. The one-year CD averaged 0.14%.

Published March 18, 2022

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