In today’s briefing:
- Disney 4Q2022: Cord Cutting Exacerbating DTC Losses
- Wynn Resorts Ltd: Possible Macau Openings, Las Vegas Recovery,big Investor Takes 6.1% Position
- ARLO: Service in a Tough Market, PT to $8
- ACCO: Free Cash Flow Begins to Show
- XPER: New Launches Reduce Execution Risk
Disney 4Q2022: Cord Cutting Exacerbating DTC Losses
- Across the board miss as DTC losses peak, park margins weaken, and linear likely to fall off a cliff.
- Big FY2023 guide down on revenues (HSD vs. LDD previously) and OI growth (HSD vs. ~25% consensus previously).
- Disney profitability lower for longer as macro headwinds on parks, accelerating cord cutting, and pushed out D+ profitability means OI likely down $2B in both FY23-24.
Wynn Resorts Ltd: Possible Macau Openings, Las Vegas Recovery,big Investor Takes 6.1% Position
- Billionaire US investor Tillman Fertitta has bought into what he believes is an undervalued stock as the Las Vegas market recovery speeds up.
- Stock could now be in play as Fertitta, Wynn’s ex-wife and Macau giant Galaxy now control a al of 20% the outstanding shares.
- Stock is up 18% since Fertitta’s buy last week. It could well be in play.
ARLO: Service in a Tough Market, PT to $8
- ARLO affirmed the slowdown in consumer purchasing that began in September and is expecting the market to remain soft through the middle of 2023
- While ARLO had reduced channel inventory in the second quarter, it had started to ship more product into the channel by the time there was a shift in the market
- Number of paid subscribers continues to rise in Q3 with ARLO adding 195 thousand. ARLO is expecting paid subscriber growth to continue as the channel sells units to the consumer
ACCO: Free Cash Flow Begins to Show
- ACCO had already warned of the sales shortfall in the third quarter but followed through on exhibiting the free cash flow capabilities of the business.
- Retailers have changed their purchasing habits and that has led to slower sales at ACCO.
- Looking ahead to the fourth quarter, back to school season begins in Brazil and Australia, which should give a lift to sales.
XPER: New Launches Reduce Execution Risk
- XPER reported third quarter results after becoming a separate operating business at the beginning of October
- XPER is progressing in adding new customers for its different product lines with revenue expected to ramp in subsequent quarters
- The third quarter did not have much in the form of surprises with XPER maintaining its full year guidance.
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