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Saturday September 20, 2014

Finances

Finances
 

Men’s Wearhouse Reports Earnings

Men’s Wearhouse, Inc. (MW), a men’s clothing retailer, reported its latest quarterly earnings on Thursday, June 5. The company reported solid earnings and will soon complete its acquisition of Jos. A. Bank.

Men’s Wearhouse reported net sales of $630.47 million for the quarter. This represents an increase of 2.26% from the same period last year when the company reported net sales of $616.54 million.

“We are excited about our near-term and long-term opportunities,” said Doug Ewert, Men’s Wearhouse President and CEO. “As previously disclosed, the Federal Trade Commission terminated the waiting period under the Hart-Stock-Rodino Antitrust Improvements Act of 1976, as amended. We now expect to complete the combination of Men’s Wearhouse and Jos. A. Bank within the next few weeks and look forward to achieving the benefits of the combination for our shareholders.”

The company reported quarterly net income of $16.49 million. This represents a decrease from the comparable period last year when the company reported net income of $33.09 million.

Men’s Wearhouse announced in March that it would acquire men’s clothing store Jos. A. Bank for $1.8 billion. The Federal Trade Commission then announced that it would be investigating the proposed acquisition for possible antitrust violations. The FTC announced this week that the merger would not violate antitrust laws. Men’s Wearhouse is expected to finalize its acquisition of Jos. A. Bank very soon.

Men’s Wearhouse, Inc. (MW) shares ended the week at $54.26, up 9% for the week of 6/2.

J.M. Smucker Co. Reports Earnings


The J.M. Smucker Company (SJM), manufacturer of food products for worldwide distribution, reported its fourth quarter and fiscal year 2014 results on Thursday, June 5. The company reported a decrease in sales but an increase in net income for the year.

The company reported net sales of $1.23 billion for the quarter and $5.61 billion for the year ending April 30, 2014. The annual sales figure represents a decrease of 4.9% from fiscal year 2013 when the company reported net sales of $5.9 billion.

“Our 2014 record earnings per share achievement once again demonstrates that the principles that have guided our Company for 117 years continue to deliver results regardless of the headwinds encountered,” said Richard Smucker, CEO of J.M. Smucker Company. “We delivered 5% non-GAAP earnings per share growth and returned over $730 million in cash to shareholders through dividends and share repurchases in 2014. These accomplishments are a product of our long-term, forward-looking growth strategy, the strength of our iconic brands, an aggressive innovation pipeline, and the commitment and perseverance of our team.”

The company reported quarterly net income of $118.5 million and annual net income of $565.2 million. Annual net income increased 3.86% from fiscal year 2013 when the company reported net income of $544.2 million.

The J.M. Smucker Company was founded by James Monroe Smucker in 1897. James was an Ohio farmer that began by selling apple butter from the back of his horse-drawn wagon. Since then, the company has had five CEOs all within the Smucker family. James Monroe was chief executive until 1947 when his son Paul Smucker took over. Paul was CEO until 1987 when his sons Timothy and Richard Smucker took over and now share the position. Mark Smucker and Paul Smucker are currently Division Presidents and waiting their turn for the big chair. This sort of longevity is rare in such a large public company. However, as long as the company is doing well for shareholders then the Smucker legacy is likely to continue.

The J.M. Smucker Company (SJM) shares ended the week at $105.70, up 2.9% for the week of 6/2.

Vail Resorts to Make Improvements


Vail Resorts, Inc. (MTN), operator of resorts in the United States, reported its quarterly earnings on Thursday, June 5. The company plans to make improvements to its ten mountain resorts for the winter season.

The company generated $543.05 million in revenue during the latest quarter. This represents an increase from the same period last year when the company generated $469.69 million in revenue.

“We are very pleased with our performance in the third quarter of fiscal 2014,” said CEO Rob Katz. “We saw continued strong performance in Colorado and improved results in Tahoe, leading to an 11.2% increase in total visitation this quarter compared to the prior year. Total lift revenue increased by 17.1%, ski school revenue increased by 16.8% and total mountain revenue increased by 14.6% compared to the prior year. Our mountain performance includes the results of Canyons, which were in line with our previous public estimates, and the results of our Urban ski areas, whose performance was ahead of our expectations.”

The company reported net income of $117.87 million. This is an increase from the comparable quarter last year when the company reported net income of $97.59 million. Earnings per share came in at $3.18 per share.

Vail Resorts announced that it will spend $85 million to improve its 10 mountain resorts during fiscal year 2015. This is in addition to the $407 million in improvements the company has already made during the past four years. The company will add several express chairlifts, restaurants and room renovations.

Vail Resorts, Inc. (MTN) shares ended the week at $76.23, up 7.9% for the week of 6/2.

The Dow started the week of 6/2 at 16,717 and closed at 16,924 on 6/6. The S&P 500 started the week at 1,924 and closed at 1,949. The NASDAQ started the week at 4,248 and closed at 4,321.
 

Treasuries Fall After Jobs Data Release

Treasuries fell and yields rose after the U.S. Department of Labor released jobs data for May. While the figures were in line with economist’s expectations, the labor force participation rate remains low.

The U.S. economy added 217,000 jobs in May. Economists had expected that 215,000 would be added. May is the fourth consecutive month with job growth exceeding 200,000 jobs. The last similar streak was from September 1999 to January 2000. The unemployment rate remained at 6.3%.

“The number suggests a pattern of consistency and a gradually improving labor market,” said Christopher Sullivan, Chief Investment Officer at United Nations Federal Credit Union. “Until there is a big change in the data, one way or the other, we will continue to hover around these levels.”

On Thursday the 10-year note yield reached a high of 2.64%. During early Friday morning trading the 10-year note yield dropped two basis points to 2.57%.

Fed Chair Janet Yellen stated that the federal funds rate will stay at almost zero for a “considerable time.” Currently futures prices put the likelihood that the federal funds rate will begin to rise by June 2015 at 43%.

The 10-year Treasury note yield finished the week of 6/2 at 2.6% while the 30-year Treasury note yield finished the week at 3.44%.
 

Interest Rates Increase Slightly

Freddie Mac released the results of its latest Primary Mortgage Market Survey (PMMS) on Thursday, June 5. The results showed average mortgage rates rising slightly compared to last week.

The 30-year fixed rate mortgage averaged 4.14% this week. This represents an increase from last week when it averaged 4.12%. Last year at this time, the 30-year fixed rate mortgage averaged 3.91%.

This week, the 15-year fixed rate mortgage averaged 3.23%. This represents an increase from last week when it averaged 3.21%. One year ago, the 15-year fixed rate mortgage averaged 3.03%.

“Mortgage rates were little changed amid a week of light economic reports,” said Frank Nothaft, Vice President and Chief Economist at Freddie Mac. “Of the few releases, real GDP was revised down to 1% growth in the first quarter of 2014. ADP Research Institute estimated the private sector added 179,000 in May, which followed a slight downward revision of 5,000 jobs in April. Meanwhile, the Institute for Supply Management reported the manufacturing industry saw a slight acceleration in monthly growth for May.”

The money market fund finished the week of 6/2 at 0.3%. The 1-year CD finished at 0.7%.

Published June 6, 2014


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