The world’s largest regional theme park company, Six Flags Entertainment (SIX), has announced preliminary 1Q20 revenues along with significant steps taken to both reduce expenses and boost the overall liquidity outlook.Management expects 1Q20 revenues to be $25-30M lower than the year-ago period, or roughly $98-103M, but added that a sizable portion of the decline was offset by operating expense cuts when the parks closed. SIX also agreed with lenders to suspend the regular dividend until the end of 2021 or the termination of its additional $131 million credit facility.With the timeline for park reopenings remaining unknown, management is reducing expenses and cash outflow by (1) eliminating all seasonal labor; (2) reducing employee pay by 25%; (3) suspending all marketing/advertising costs; and (4) eliminating $30-40M in non-labor operating costs. Lastly, $40-50M of capital projects this year are now deferred or eliminated.Along with an increase in the company’s revolving credit facility, management now...
Warehouse supermarket chain Costco (COST) has reported net sales of $15.49 billion for the retail month of March, an increase of 11.7% from $13.87 billion last year. Comparable sales trends in the US also remained strong with a 12.1% US comp increase for the month of March.Similar to other retailers, COST is also seeing surging consumer demand online with e-commerce sales accelerating by 49.8% in March.However, the results do suggest a recent softening. “We believe this reflects a pull forward in demand, restrictions in stores impeding customer traffic, shoppers browsing less in discretionary areas, and the shutdown of select services” writes Oppenheimer’s Rupesh Parikh.He recommends that investors take advantage of a likely continued volatile trade from here, adding “sales trends could slow further from here.” The analyst reiterated his COST buy rating on April 8 with a $335 price target (9.5% upside potential). COST shares have meaningfully outperformed year-to-date, up 4% vs....
Oil prices rose on Thursday on expectations the world's largest oil producers would agree to cut production at a meeting later in the day as the industry grapples with a coronavirus-driven collapse in global oil demand. U.S. West Texas Intermediate (WTI) crude futures were up 5%, or $1.27 cents, at $26.36 a barrel, after earlier climbing by as much as 6.1%. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - a group known as OPEC+ - are set to convene a video conference meeting on Thursday....
Starbucks (SBUX) is expecting FQ2 adjusted earnings of $0.32 per share, almost half the $0.60 reported in the same period last year, due to the severe impact of the coronavirus pandemic. Starbucks also revealed that business disruption related to COVID-19 in China had an adverse impact to GAAP EPS for Q2 of $0.15 to $0.18.However, the coffee chain warned that worse is still to come. “Based on the late-quarter onset of COVID-19 impacts to our business results in the U.S. and other markets globally—and as the flow-through impact of lost sales in the U.S. is materially greater than the flow-through impact of lost sales in China—we expect the negative financial impacts to Q3 to be significantly greater than they were in Q2 and to extend into Q4.”As a result, Starbucks withdrew its full year guidance- but reassured investors that it continues to believe these impacts are temporary and that its business will...
(Bloomberg) -- The coronavirus market sell-off is probably past its worst, strategists at Morgan Stanley have said. Jeffrey Gundlach sees bigger losses ahead, while Howard Marks went from bearish to more optimistic in a week.For another veteran investor, calls on whether equities have reached a bottom are nothing short of futile.“I think it’s a mug’s game,” said Hugh Young, head of Asia Pacific at the $644.5 billion manager Aberdeen Standard Investments. “Nobody has the answer.”Shares across the world have recovered some of their losses from the rout spurred by the virus. An index of global equities has risen more than 20% from its low in March, technically entering a bull market, though it’s still down more than 18% this year.For Young, it’s possible markets have reached a bottom, but it’s far too early to say with certainty.“It feels as though this is going to go on for a fair old time,”...
(Bloomberg) -- An unprecedented accord between the world’s largest oil producers to ratchet back production and rescue crude markets from a catastrophic pandemic-driven collapse moved closer within reach after Russia signaled it’s ready to make cuts.Moscow, whose grudge against U.S. shale is arguably the biggest obstacle for a deal, said Wednesday it’s willing to reduce output by 1.6 million barrels a day, or roughly 15%. Oil prices surged in New York.At stake is the fate of entire oil-dependent economies, thousands of companies and millions of oil industry jobs as the OPEC+ coalition and Group of 20 oil ministers gather in two key video conferences this week. Crude futures have plunged to the lowest levels in two decades as the lockdowns around the world slash oil demand by as much as 70% in some places and Russia and Saudi Arabia battle for their share of a shrinking market.See also: Goldman Warns Global...
(Bloomberg) -- Oil is set to tumble back toward $20 a barrel as global producers will likely fall short of targeted cuts this week, leaving a supply overhang that will threaten to overwhelm global storage, according to ING Groep NV.Oil giants including Saudi Arabia and Russia are likely only going to be able to cobble together a global agreement to curb 6 million to 7 million barrels a day of supplies, said Warren Patterson, ING’s head of commodities strategy. That’s more than triple what OPEC+ was cutting at the start of this year but is short of the 10 million barrels a day or more that U.S. President Donald Trump proposed last week.It’s also well shy of the loss in demand of about 15 million barrels a day in the second quarter caused by government lockdowns to stop the spread of the virus, Patterson said. Brent crude, which has already plunged...
