In today’s briefing:
- Lululemon: Ignore The Margin Compression Talk
- Church & Dwight: Major Drivers
- McDonald’s Corporation: Automated Locations & Other Drivers
- Sysco Corporation: Major Drivers
- “Stable Dividend” Tradition May Have Something to Do with Rewarding Cross-Held Shareholders
Lululemon: Ignore The Margin Compression Talk
- Lululemon Athletica Inc.’s calendar year margin compression is due to variable costs that will probably adjust lower this year.
- Many analysts mistake’monetized costs’ such as excess amortization for cash costs.
- Lululemon Athletica Inc. (NASDAQ:LULU) stock has surged by nearly 2000% since its initial public offering in 2007.
Church & Dwight: Major Drivers
- Church & Dwight delivered a strong set of results in the last quarter, with revenue growth of around 0.4% that was beyond Wall Street expectations.
- Its international business delivered 3.2% organic growth, driven by impressive performance across international subsidiaries.
- On the other hand, TROJAN condoms returned to share growth, while OXICLEAN stain removers and ARM & HAMMER baking soda achieved double-digit consumption growth.
McDonald’s Corporation: Automated Locations & Other Drivers
- McDonald’s delivered an all-around beat in its last result as it continued advancing its brand’s top-line momentum and global reach.
- For the fourth quarter, comparable sales increased by double digits, and they kept gaining market share in most key markets.
- In addition, McDonald’s Monopoly made a triumphant comeback to the Canadian market during the fourth quarter, enhancing the experience by employing their app.
Sysco Corporation: Major Drivers
- Sysco delivered a mixed set of results for the last quarter and it was able to surpass the analyst consensus estimate in terms of revenues as result of double-digit sales growth.
- However, despite a decent earnings growth year-over-year and strong volume growth as well as market share gains, the company missed out on meeting earnings expectations.
- Sysco continues to advance its growth strategy with progress in its digital tools, merchandising initiatives, and supply chain investments in sales.
“Stable Dividend” Tradition May Have Something to Do with Rewarding Cross-Held Shareholders
- The Nikkei article addresses high-dividend investing as short-term strategy, while “Quality Income” is in demand by long-term investors seeking stable long-term performance. Both strategies have different investor segments and needs.
- Many Japanese companies have basic policy of “stable dividends,” but it is easier for shareholders seeking to increase shareholder interests to understand a dividend policy based on clear cash allocations.
- Given that Metrical’s analysis also found no correlation between changes in market capitalization and dividend policy scores, linking dividends and stock price is a difficult problem.
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