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Wednesday June 19, 2013

Finances

Finances
 

Investors Sold on Earnings by Costco Wholesale

Costco Wholesale Corporation (COST) announced its earnings results for the second quarter this past week. The company's positive earnings were driven in part by inflation in gasoline prices.

For the quarter, Costco reported net sales of $22.51 billion. This is a 10% increase from the same period last year, up from $20.14.

Costco also reported an increase in its net income for the quarter. Net income rose $394 million, or $0.90 per share. This compares to net income of $348 million, or $0.79 per share, from the same period last year.

For the quarter, Costco met market expectations. The market expected earnings per share of $0.90.

Shares of Costco Wholesale Corporation (COST) closed the week at $86.08 per share.

Investors See Healthy Return on Vitamin Shoppe Earnings


New Jersey-based Vitamin Shoppe, Inc. (VSI) announced its preliminary earnings report this past week. The leading retailer of nutritional products has seen 25 consecutive quarters of sales growth.

Vitamin Shoppe reported net sales of $214.9 million in its 14 week fourth-quarter, an increase of $34.6 million from the 13 week similar period last year. Net sales increased 19.2%. Adjusted for the additional week in the quarter, Vitamin Shoppe posted an increase in net sales of $19.0 million, or 10.6%.

The company also reported a profit increase of $14.9 million for the quarter. Profits rose to $74.5 million, an increase of 24.9%.

Tony Truesdale, Vitamin Shoppe's Chief Executive Officer stated, "We are pleased with the consistent results we achieved this quarter. We delivered our 25th consecutive quarter of positive comparable sales growth. Revenue was robust, merchandise margins strong, operating margins expanded and earnings per share grew at a healthy double-digit pace." He added, "I want to thank all the Vitamin Shoppe team members for their contributions. It is due to all their hard work that we were able to successfully execute our strategic initiatives and deliver another quarter and year of outstanding financial results."

Vitamin Shoppe has been voted the number one ranked vitamin store three years in a row by ConsumerLab.com.

Trading for shares of Vitamin Shoppe, Inc. (VSI) ended the week at $43.10.

Domino's Pizza Delivers in Latest Earnings Report


Domino's Pizza, Inc. (DPZ) reported its fourth-quarter earnings this past week. The company's earnings rose 28% for the quarter, beating market expectations.

The pizza chain's growth is largely driven by its success with its international business operations. The company projects that at some point in 2012 the number of international stores will exceed the number of stores located inside of the U.S.

Domino's reported a quarterly profit of $30.9 million, or $0.52 per share. Market estimates had predicted earnings per share of $0.49. In the same period last year, the company reported a profit of $24.2 million and a per share profit of $0.39.

Domino's President and Chief Executive Officer, J. Patrick Doyle, stated in a company press release that Domino's "positive results this year provide yet more evidence that we have successfully reset the bar for Domino's Pizza." Doyle also noted that "The global momentum that we are driving through our innovation, commitment to food quality and outstanding service continues to energize our franchise owners and team members and inspire their terrific performance."

At week's close, shares of Domino's Pizza, Inc. (DPZ) ended trading at $37.85.

The Dow started the week at 12,983 and closed at 12,978. The NASDAQ started the week at 2,964 and finished at 2,976.The S&P 500 started the week at 1,366 and ended at 1,369.
 

Treasuries Remain Attractive in Face of European Debt Concerns

Treasuries rose at the end of the week following four days of declines. The gain was attributed to concern that efforts to spur lending in Europe would be insufficient to encourage growth. Investors moved to Treasuries in search of safety.

Shortly after noon on Friday last week, the yield for 10-year Treasuries fell 0.05 percentage points to 1.98%. The gap between Treasury yields and 10-year German debt grew by 0.18 points. This represents the largest gap since November.

In Germany, retail sales declined 1.6% from December. Investors see Treasuries as a safe haven investment in the face of concern over the global economy. David Ader, of CRT Capital Group, LLC, said in a recent radio interview that he did not "think this is an atmosphere where there's going to be a lot of risk appetite."

The 10-year Treasury note yield finished the week at 1.98%, while the 30-year Treasury note yield finished the week at 3.11%.
 

Mortgage Rates Dip Slightly for the Week

Freddie Mac released its most recent Primary Mortgage Market Survey (PMMS) on March 1, 2012. The results of the survey show that the average rate for a Fixed Rate Mortgage (FRM) declined slightly this week after a slight increase last week.

The 30-year FRM averaged 3.90% for the week, down from 3.95% last week. Last year at this time, the average 30-year mortgage was 4.87%. This marks the thirteenth week in a row that the 30-year FRM remained below 4.0%.

The average 15-year FRM also trended downward, averaging 3.17% for the week. Last week, the 15-year FRM averaged 3.19%. During the same period last year, rates for the 15-year FRM averaged 4.15%

"Fixed mortgage rates bottomed out in January and February of this year which is helping spur the housing market. For instance, pending existing home sales rose in January to its strongest pace since April 2010 and sales figures for December saw upward revisions," stated Frank Nothaft, Vice President and Chief Economist of Freddie Mac. Nothaft added, "In addition, the Federal Reserve noted in its February 29th regional economic review (or Beige Book) that residential real estate activity increased modestly in most of its Districts over the course of January and early February, with several reports of increased home sales."

The money market fund finished this week at 0.50%. The 1-year CD finished at 0.60%.

Published March 2, 2012

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