Nordstrom & SentinelOne Surge After Strong Q2 Results

Good morning, it’s August 28th, and in today’s edition we’ll look at why SentinelOne and Nordstrom are rallying, plus a tiny stock in the industrial organic chemicals space that is surging by 141%.

Previous Close 📈

Both the tech-heavy Nasdaq Composite and the S&P 500 climbed 0.16% yesterday. In contrast, the Dow Jones edged up by just 0.02%.

Futures

Stock futures are flat today as investors await NVIDIA's quarterly earnings report.

What to Watch

There are several major tech stocks to watch out for today, but the biggest one is NVIDIA (NASDAQ: NVDA), which will release its quarterly earnings after the closing bell.

Salesforce (NYSE: CRM), CrowdStrike Holdings (NASDAQ: CRWD), and HP (NYSE: HPQ) will also share their numbers during aftermarket trade.

On the economic data front, we will get the Case-Shiller Home Price Index for June at 9:00 a.m. and the Consumer Confidence Index for August at 10:00 a.m.

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Footwear and Apparel

Foot Locker Shares Drop 8% as Full-Year Outlook Remains Unchanged Amid Store Closures

Foot Locker's second-quarter fiscal results are better than analysts' expectations, but it has left its full-year guidance unchanged. This is causing its stock to fall by 8% in premarket trading.

The athletic footwear and apparel retailer reported a net loss of $12 million, or 13 cents per share, for the quarter ending August 3, widening from a $5 million loss, or 5 cents per share, in the same period last year. Excluding one-time items, it posted a per-share loss of 5 cents, beating the FactSet consensus estimate of a 7-cent loss.

Total revenue for the quarter increased by 1.9% to $1.896 billion, slightly above the expected $1.888 billion. Comparable sales rose by 2.6%, outperforming expectations of 1% growth, with gains driven primarily by Foot Locker and Kids Foot Locker stores.

Despite these positive results, the company maintained its full-year forecast for adjusted earnings per share of $1.50 to $1.70, with projected sales growth ranging from -1% to +1% and comparable sales growth between 1% and 3%.

The firm also announced plans to close stores and discontinue e-commerce operations in South Korea, Denmark, Norway, and Sweden as part of its strategic realignment.

Year-to-date, Foot Locker shares have risen 5.3%, trailing the SPDR S&P Retail ETF's 7.4% gain and the S&P 500's 18% increase.

Technology

Strong Q2 Performance Propels SentinelOne to Increase 2025 Revenue Outlook

SentinelOne surpassed market expectations in its second-quarter fiscal 2025 results, reporting adjusted earnings of $0.01 per share, ahead of the consensus forecast of zero earnings.

The company’s revenue reached $198.9 million, exceeding the expected $197.3 million, marking a 33% increase compared to the same period last year.

In premarket trading, SentinelOne is trading 1.4% higher than yesterday’s closing.

CEO Tomer Weingarten attributed the positive performance to growing customer interest in the company's AI-powered Singularity Platform, which provides advanced cyber defense solutions. The platform's appeal lies in its ability to offer a robust and transparent approach to cybersecurity, enhancing customer trust and satisfaction.

The company reported a gross margin of 75% for the quarter and highlighted the escalating complexity and cost of cyberattacks. SentinelOne's letter to shareholders pointed out the recent high-profile breaches and system failures experienced by competitors, positioning the company as a leader in the cybersecurity space.

Retail

Nordstrom Shares Rallying By 7% After Beating Earnings Expectations Despite Cautious Guidance

Nordstrom shares are surging by more than 7% in premarket trading after the retailer posted stronger-than-expected second-quarter earnings yesterday, even as it provided cautious guidance for the full year.

The department store chain reported adjusted earnings per share of 96 cents, surpassing analysts' expectations of 71 cents. Revenue reached $3.89 billion, just shy of the anticipated $3.90 billion, and comparable sales rose by 1.9%.

CEO Erik Nordstrom expressed optimism for the remainder of the year, highlighting the company’s progress in expanding gross margins and boosting profitability.

Despite this confidence, Nordstrom's updated forecast shows a narrower range for adjusted earnings per share, now projected between $1.75 and $2.05, and sales growth ranging from a 1% decline to a 1% increase.

Nordstrom has focused on improving its supply chain and expanding its off-price brand, Nordstrom Rack, to drive growth. The company has seen momentum in this area, with Rack sales up 8.8% and comparable sales increasing 4.1% during the quarter.

The expansion strategy includes opening 22 new Rack locations by the end of the fiscal year, positioning Nordstrom to compete with other off-price retailers like TJ Maxx and Marshall's.

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Bolt Projects Holdings, Inc. [BSLK] - Last Close: $2.07

Bolt Projects Holdings is soaring over 141% in premarket trade.

The industrial organic chemicals company announced major corporate changes following an 8-K filing with the SEC recently.

It completed a significant business combination with Old Bolt and conducted a PIPE investment by issuing 464,801 shares at $10 per share.

The merger involved issuing approximately 0.2949 shares of Bolt’s common stock for each share of Old Bolt capital stock.

New directors and executives, including CEO Daniel Widmaier, have been appointed, and Elliott Davis, PLLC, has replaced WithumSmith+Brown, PC, as the company’s accounting firm.

Waldencast plc [WALD] - Last Close: $2.90

Waldencast shares are up 18% in premarket trading after the company reported a strong second quarter for 2024, with net revenue growth of 25.7% and a 64.5% increase in adjusted EBITDA.

The growth was fueled by the strong performance of its brands, Milk Makeup and Obagi Medical, which have surpassed market trends through innovation and community engagement.

Waldencast expects continued growth and aims for a mid-teens adjusted EBITDA margin for the full fiscal year.

Ambarella, Inc. [AMBA] - Last Close: $52.79

Ambarella’s stock is surging by 20% in the premarket trade today, after it reported better-than-expected Q2 results and guidance last evening.

The semiconductor firm posted an adjusted loss of $0.13 per share, beating the forecasted $0.19 loss. Revenue rose 2.7% year over year to $63.7 million, above the expected $62.1 million.

CEO Fermi Wang highlighted strong growth drivers from IoT and automotive customers, particularly from new products.

For Q3, Ambarella anticipates revenue between $77 million and $81 million, surpassing the $69 million analyst estimate, and an adjusted gross margin of 62.5% to 64%, higher than the estimated 62.5%.

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Everything Else

• LEGO reported 13% revenue growth in H1 2024, driven by diverse product lines and its Fortnite collaboration.

• Apple is strengthening its India footprint with an Airtel collaboration for free music and TV streaming.

• BYD reported a 24.4% profit jump in the first half despite a weak auto market.

• National Bank of Canada sees profit rise amid strength in key units.

• 401(k) millionaires have reached a new peak as average balances grow.

• Buffett reduced his Bank of America holdings, reaping nearly $1 billion.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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