Daily Brief Consumer: Prosus NV, JD.com , Wheat, Expedia Group, Inc., TSE Tokyo Price Index TOPIX, WideOpenWest Inc, Floor & Decor Holdings, Phinia , Texas Roadhouse, Wayfair Inc Class A and more

• Naspers and Prosus have announced the appointment of Fabrício Bloisi as Group CEO, effective from 1 July 2024. Unlike his predecessor, Bloisi has an entrepreneurial background.
• Prosus and Naspers have sold off on the news. Prosus is down 1.7%, widening the discount by 80bps. Naspers is down 1.3%, widening the discount by 50bps.
• Since Bob van Dijk stepped down in September last year, both discounts have narrowed.

• JD.com (9618 HK) announced a set of in-line results for 1Q24.  Sales growth was 7% yoy, in-line with my 1Q24 preview.
• Operating profit margin for the core JD retail business declined by 0.5ppt yoy to 4.1%, which is also in-line with my preview. 
• The positive surprise was a big reduction in losses in the JD logistics business, which brought the overall non-GAAP net profit growth to 17% yoy for 1Q24. 

• Wheat prices are experiencing a significant resurgence due to extreme weather events and global supply-demand imbalances. Price is 22% higher over the past month. 
• May WASDE report indicates a positive outlook for global wheat production despite recent weather challenges, suggesting potential underestimations in global supply disruptions. 
• The anticipated shift to La Niña, coupled with historically low stocks-to-use ratios, threatens global wheat supply, heightening the potential for increased market volatility and price spikes.

• Expedia Group’s Q1 2024 performance reflected a primarily healthy market environment, but growth differed according to geographical area and product line.
• Notably, North America had the slowest growth compared to other major international markets.
• Additionally, despite meeting projections on revenue and EBITDA, Expedia experienced weaker gross bookings, with its Vrbo business producing slower recovery than anticipated.

• Few companies have disclosed their cost of capital, so TSE provided specific indicators for this purpose. On the other hand, allergies to cost of capital disclosure are persistent in companies.
• It is a concern that many companies still have more fixed remuneration than variable remuneration for compensation incentives, which are a mechanism for achieving capital profitability goals like ROE.
• Engagement with overseas investors can be effective, but there are challenges, such as the existence of passive funds and companies with small market capitalizations that are not eligible for investment.

• WOW is a cable and fiber overbuilder with a modern network but is facing financial struggles
• The company trades at a distressed valuation, making it an attractive investment opportunity for private equity firms
• Despite being undervalued compared to its industry peers, WOW’s assets have been acquired for higher valuations in the past, presenting a potentially lucrative opportunity for investors

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Floor & Decor Holdings, Inc.’s First Quarter 2024 Earnings revealed several important financial developments.
• The company’s diluted earnings per share (EPS) for Fiscal 2024 came in at $0.46, surpassing expectations.
• Interestingly, this success was achieved despite the ongoing weak demand for hard surface flooring and can be attributed to the firm’s ability to strategically grow their gross margin rate and prudently control expenses.

• Phinia (PHIN) presents significant upside potential for investors in the vehicle parts sector
• PHIN focuses on aftermarket replacement, commercial vehicles, and off-highway markets
• Despite strong geographic diversity and solid financial performance, PHIN is undervalued compared to peers, indicating potential for stock price increase

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Texas Roadhouse’s Q1 2024 earnings highlight a robust display of operational performance, driven by solid momentum across all segments and brands.
• With quarterly revenue surpassing $1.3 billion, a same-store sales growth of 8.4%, and continued commitment to guest experience and quality consistency, Texas Roadhouse has set a robust start for 2024.
• Despite a climate of economic uncertainties, the company posted record sales, margin dollars, and net income for the first quarter.

• Wayfair reported a marginal year-over-year decrease in revenue for Q1, around 2%, even as its customer base grew again, signifying the company’s continued momentum.
• Inventory levels are healthy and Wayfair noted the positive feedback from suppliers who are past the tough phase of facing elevated input costs and transportation prices in late 2022.
• Suppliers are substantially interested in partnering with Wayfair and featuring their products in promotional events and stores, among others.