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E-Commerce Automotive Market Is the Next Big Thing and the U.S. Auto Parts Network Is The Player to Pay Attention on

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US Auto Parts

The global e-commerce automotive market is forecasted to grow with the highest CAGR from 2020 to 2029, according to a latest industry study by Market.us. And one of the market’s key players, U.S. Auto Parts Network, Inc. Common Stock (NASDAQ:PRTS) U.S. Auto Parts Network, Inc. is expected to report earnings for its third quarter that ended on September 30th on November 1 after the market closes. U.S. Auto Parts Network Inc that was established in 1995, together with its subsidiaries, operates as an online provider of aftermarket auto parts and accessories primarily in the United States and the Philippines. It offers a range of exterior and interior automotive parts and accessories to individual consumers through its large network of online marketplaces.

News that influenced the quarter

One of the largest online providers of aftermarket automotive parts and accessories has announced an appointment of Jim Barnes to its Board of Directors. Barnes is currently a CEO enVista, LLC, a supply chain and unified commerce consulting firm that he co-founded in 2002. Mr Barnes feels that the company is well equipped and positioned to grow its business by providing U.S. consumers with affordable auto parts. He seems as the perfect fit for the company to go forward and fuel that growth as the company has been facing a drop in its revenues. For this quarter’s earnings, analysts expect the company to deliver a year-over-year decline. When we look at the last four quarters, they only managed to beat analyst expectations once, with remainder being surprise-free. But even that’s better news than missing estimates. And many stocks can still lose ground even after exceeding estimates due to other qualitative factors influencing the investor’s sentiment. So let’s try to figure out what those catalysts might be.

Prior results

Through the first quarter, the company reported that 91% of its revenue comes from e-commerce and online marketplace with the remaining being offline or wholesale. When it comes to product portfolio, 57% of products are from the collision parts line, 31% of engine parts, and 11% is represented by performance and accessories. As for the latest annual filing, net sales were $289.5M with adjusted EBITDA $10.4M.

Previous quarter earnings

The specialty auto parts retailer reported ($0.04) earnings per share for the quarter, successfully meeting the Thomson Reuters’ estimate. U.S. Auto Parts Network did have a negative return on equity of 23.48% with a negative net margin of 3.21%. But the company had revenue of $73.69 million during the quarter with analyst estimates of $74.66 million.

Analyst expectations

The down-trending stock of U.S. Auto Parts Network, Inc. has declined 15.11% since October 25, 2018. It has underperformed S&P500 by 15.11%. But, it crossed above its 200-day moving average during trading on October 14th as the stock’s 200-day moving average of $1.21 was exceeded by shares trading as high as $1.55.
On average, analysts expect U.S. Auto Parts Network, Inc. to report $-0.03 EPS on November, 1 with $0 EPS for the current as well as the following fiscal year. Some anticipate $0.04 EPS change or 400.00% from last quarter’s $0.01 EPS. After having $-0.04 EPS previously, U.S. Auto Parts Network, Inc.’s analysts see -25.00% EPS growth. The stock decreased 1.24% or $0.02 during the last trading session, reaching $1.59.
There’s the ‘surprise’ potential which underlines the whole industry
Back on August 17th, after its prior quarter earnings were released, Zacks Investment Research upgraded their shares from a “hold” to a “buy” rating, by setting a $1.25 price target. So together with the unexpected growth of the e-commerce auto-parts industry, this industry peer is able to pull out a few surprises. One week ago, Lamp News reported that institutional sentiment increased to 0.86 in Q2 2019. Its ratio improved by 0.65 as it was 0.21 in the first quarter of 2019 fiscal year.

Competitors

One of its main competitors, Autozone Inc (NYSE:AZO) rose 2.77% on October 24 post its earnings report. What’s more impressive that its up-trending stock has risen 60.79% since October 27, 2018. But focusing more on e-commerce and speaking of the giant itself, Amazon (NASDAQ:AMZN) was just heavily beaten by Microsoft in getting the US$10 bn cloud deal so its throne is surely shaken up.
A giant of another kind, the Chinese Alibaba group (NYSE:BABA) is now a strong buy as its earnings report is on the horizon. But, the US-China trade dispute continues to loom over the stock. Although its fate might not be entirely tied to this scenario but we have to wait for October 31 to see if they can manage to beat estimates like they did last quarter. Yet, if shares fall short of estimates, there could be a significant material decline that would be a clear indicator that the trade war is influencing the business. We still have to wait to see the impact of the weakening economy and intensifying trade disputes, but one thing is clear: U.S. Auto Parts Network operates in a highly competitive environment.

Outlook

Even Amazon made losses several years after its listing, but all those who bought and held the shares from the company’s beginnings ended up making a fortune. And this is the reason why investors are often drawn to ‘seemingly’ unprofitable companies. The main concern for U.S. Auto Parts Network is the possible cash burn scenario which would bring the company to a distressful position. So the question that analysts want answered is can this company afford to keep investing in its growth? But, on the bright side, the company was debt free in June this year with its balance sheet showing US$890k in cash. Its balance of cash reserves and cash burns did alter significantly through the years but the company did have a positive cash flow last year. Unfortunately, its revenues are down sliding this year as they declined 5.1%. The good news is that it would be easy for the company to fund a year of growth by either taking out a loan or issuing new shares. So, if they can work on their offerings to enhance their sales, there are many reassuring factors to support its way forward- hopefully to growth.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com
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BenzingaEditorial

Bed Bath & Beyond’s Stock Plunges With Hard Times on the Horizon

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On Wednesday, January 8, third quarter earnings and revenue miss caused the share price of Bed Bath & Beyond Inc (NASDAQ:BBBY) to plunge 8 percent with the retailer withdrawing fiscal 2019 outlook. On Thursday, stock was down 11 percent in premarket trading.

Third quarter earnings

Oh, how the mighty have fallen seems as the appropriate phrase to describe net earnings from of $24.4 million from one year ago dropping to a net loss of $38.6 million. Refinitiv expected earnings of 2 cents whereas the retailer delivered an adjusted loss per share of 38 cents. Revenue dropped 9 percent and amounted to $2.76 billion with same store sales dropping 8.3 percent versus the 5 percent expected. Both sales and profitability are expected to remain under heavy pressure in the fourth quarter as well. The retailer found that its results were significantly impacted by the fact Thanksgiving fell later than usual, resulting in one week less of holiday sales.

Tritton’s shakeup

On Monday, the retailer announced that it accomplished a real estate deal that netted the company $250 million in proceeds, what according to Tritton is the first step towards unlocking valuable capital. And only in December, Tritton decided to let six senior executives go and is currently in the recruitment process for their roles. Bed Bath and Beyond’s turnaround strategy is well underway with these swift changes but surely, there are many more to come as some of these executives have been with the company for more than 20 years – so “out with the old, in with the new” it is.

Intense competition

Amazon (NASDAQ:AMZN) has vigorously shaken up the retail landscape, but Target Corporation (NYSE:TGT) and Walmart Inc (NYSE:WMT) are by no means, left behind, but are in fact doing beyond great as they are successfully luring customers with more attractive websites and speedier shipping. And all of them are selling pretty much all the products that Bed Bath & Beyond has in store, leaving the struggling company in quite a turmoil.
But Amazon is by no means still the emperor sitting on the e-commerce throne as it is literally bleeding out to retain its crown. The world’s biggest online stores is losing money on its sales in order to achieve its shipping policy and in the world of ‘free-shipping’, it seems it could soon be beaten by Walmart, world’s third largest store but America’s largest retailer. And it is growing fast into online retail with its online sales exploding 78 percent up since 2016, but more importantly, now growing twice as fast as Amazon. And here’s the trick, Walmart is using its physical stores as warehouses for online sales. And since these stores are already turning a profit, maintaining extra warehouse space is nothing but a small addition to costs and that makes its strategy far different. Amazon only has 110 warehouses across the US so Walmart will soon have the biggest and more effective shipping network. Although both have great growth potential, Walmart is going full speed ahead in the online retail wars. Not good news for Amazon and especially for poor old Bed Bath & Beyond.

Outlook

CEO Mark Tritton, a Target veteran who started commanding the ship in October has announced that strategic plans for creating a long-term profitable growth will be revealed within the next two months, showing his discontent with these unsatisfactory results which are more than an imperative for change of the current business model. Bed Bath & Beyond desperately needs a new vision and hopefully, Tritton will be able to deliver it, otherwise things could get even worse.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Walgreens Isn’t Getting Closer to Turning Sickness to Health

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Walgreens News

Walgreens Boots Alliance (NASDAQ:WBA) reported its first fiscal quarter earnings on Wednesday, January 8 before the market opened. Its profits were harmed by increased competition from online and discount retailers, resulting in less prescriptions. Despite the slow start of 2020, the company hopes to be one of the rare survivals of the intense shakeout that is upon the pharmacy sector and is expected to wipe out thousands in the years to come.

Earnings report

Wall Street expected $34.6 billion in revenue and earnings per share of $1.41. And results fell short of expectations with revenue of $34.34 billion. Net profits declined sharply, 25 percent to be exact to $845 million for the period ended November 30th, 2019. Despite rumours that that the global pharmacy chain could be taken private in a massive leveraged buyout but Chief Executive, Stefano Pessina, didn’t address this speculation but rather emphasized that the company is making a progress in reinventing new services and digitizing its drugstore chain. The company is investing hundreds of millions of dollars in this reinvention while under a massive cost management program. And at least sales went up 1.6 percent. But the weak pharmacy spots cost its shares a consequent fall of 7 percent after the earnings report and even dragged those of rival CVS Health Corporation (NYSE:CVS) down 2 percent as investors are concerned that the pressures on reimbursement rates from insurers is likely to make further damage to profits.

Miserable 2019

The pharmacy and retail company ‘won’ the award of worst performer for 2019 when it comes to Dow Jones Industrial Average. S&P gained 27% over the last 12 months whereas Walgreens fell 16 percent. During this everything but memorable fiscal year, Walgreens sales grew just 4% and earnings per shares were down from fiscal 2018.

Along with its rival CVS Health Corp., Walgreens is managing to help itself somewhat by benefiting from many closed up pharmacies and acquiring their customers and consequently, their prescriptions. But, Walgreens itself has closed some of its stores as the company announced in August it will close an additional 200 stores to the already announced shutdown of 750 stores. But Walgreens’ strategy is different to of its rival that aims to attract customers with lower cost personal care items and primary care services. Yet, Pessina is more than confident in Walgreens’ strategic partnership approach, which most recently included expanding its relationship with The Kroger Co (NYSE:KR) in order to include a new group purchasing organisation and simply, cushion the impact from all those blows.

Outlook

The two strong headwinds that have hampered the company—the falling reimbursement rates insurance companies pay for prescription drugs and the struggles of its retail business aren’t going to change direction anytime soon. Giants known as insurers are pressuring pharmacies on margins and Amazon.com Inc (NASDAQ:AMZN) along with many other digital competitors are already doing a great job in luring customers. Surely, Walgreens cannot be saved by LED lighting that will save money, which was mentioned by one of its executives during the conference call, but long-term, maybe a very long and severe flu season can help Walgreens in turning its own sickness into health. Yet, Wall Street remains sceptical. Since news broke in November about a possible LBO, the pharmacy chain has now lost all the gains it made since then. One thing is for sure, whoever you are, if you are anywhere near being a pharmacy, it is a very difficult place to be at.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Xerox Continues Pursuit of HP by Showing the Money, $24 billion That Is

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Xerox News

On Monday, Xerox Holdings Corp (NYSE:XRX) revealed a financing commitment with the aim to ease concerns that it is unable to fund its HP Inc (NYSE:HPQ) buyout proposal. In order to remove any doubt and prove it is capable to take over its much larger rival, Xerox secured binding financing commitments worth $24 billion from Citigroup Inc (NYSE:C), Mizuho Financial Group Inc (NYSE:MFG) and Bank of America (NYSE:BAC).

The Takeover Saga

Xerox has a market cap of $8 billion whereas HP’s kingdom is valued at $30 billion but this isn’t the common ‘big fish eat little fish’ scenario. The $33.5 billion takeover bid was daringly offered by Xerox in early November. This cash-and-stock offer was rejected twice HP who felt that $22 per share is not in the best interest of its shareholders and furthermore, that it significantly undervalues their company. When the executives rejected the proposal yet again in late November, they criticized Xerox’s aggressive approach and questioned its 10 percent decline in revenue since last year, further showing concerns about Xerox’s financial abilities to pursue this merger. But Xerox has now shown publicly its capability to pursue this value enhancing opportunity. And although profitable for now, when it comes to printing, earnings are dropping year after year as both companies are struggling and spinning off different ventures in order to leave this aging business behind. According to Xerox, this deal would save both companies $2 billion in costs over the next two years and would boost revenue for $1.5 billion over the next three years.

Outlook

Xerox strongly believes that this union would result in valuable synergy to both parties: increasing the addressable market as well as shareholder returns, ease debt and drive innovation that both companies desperately need to survive in the new era as the printing business continues to age. Moreover, Xerox also finds that it is strong in areas where HP has key market gaps, such as managed services. It obviously presented its value-creating case successfully to the big banks, winning their vote of confidence. But what will it take to win over HP? Now that the major concern is resolved, some shareholders might rethink Xerox’s proposal. But here’s an even bigger question. If successful, what does Xerox intend to do with HP’s PC business which accounts for the majority of HP’s revenues, and moreover, why does it want to get further into not only one but two markets that are slowing down? Or maybe Xerox knows something about printing and PCs that we don’t and this very same reason could also be behind HP’s self-confidence. But Xerox has now shown the money and the ability to get its agenda though so this saga is far from over.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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