TRANSCRIPT:
Dave & Buster's (PLAY), Q4 2019, Apr 2, 2019
Call Time:
4/2/2019, 5:00pm
Transcript Analysis Time :
4/10/2019, 8:05am

Our operating payroll and benefits cost as a percentage of sales was 23.8% or 110 basis points worse year-over-year due to higher incentive compensation expense, the unfavorable impact of nearly 5% wage inflation and incremental investment in labor related to virtual reality, higher medical insurance claims compared to last year and the impact of noncomp stores.

G&A expenses were $16.1 million, up from $14.4 million in the prior year, reflecting higher bonus expense, increased headcount to support a growing store base, greater medical insurance claims and higher IP and legal expenses, partially offset by lower share-based compensation expense. As a percentage of revenues, G&A expenses were 10 basis points unfavorable versus the prior year.

EBITDA was $72.1 million, up 1.9% and EBITDA margins were 21.7% down 150 basis points versus the prior year. On a comparable week basis, EBITDA was up 5.6% year-over-year and EBITDA margins were down 210 basis points. Adjusted EBITDA of $80.2 million was down 2.8% but on a comparable week basis was up 1.2%.

Net interest expense for the quarter increased to $3.7 million, up from $2.6 million in the prior year, driven by increases in the underlying LIBOR rate and higher average debt levels resulting from our capital allocation initiatives, including share repurchases and the quarterly cash dividends.

Sentiment bottomed but comps and labor headwinds are concerning

Our operating payroll and benefits cost as a percentage of sales was 23.8% or 110 basis points worse year-over-year due to higher incentive compensation expense, the unfavorable impact of nearly 5% wage inflation and incremental investment in labor related to virtual reality, higher medical insurance claims compared to last year and the impact of noncomp stores.

G&A expenses were $16.1 million, up from $14.4 million in the prior year, reflecting higher bonus expense, increased headcount to support a growing store base, greater medical insurance claims and higher IP and legal expenses, partially offset by lower share-based compensation expense. As a percentage of revenues, G&A expenses were 10 basis points unfavorable versus the prior year.

EBITDA was $72.1 million, up 1.9% and EBITDA margins were 21.7% down 150 basis points versus the prior year. On a comparable week basis, EBITDA was up 5.6% year-over-year and EBITDA margins were down 210 basis points. Adjusted EBITDA of $80.2 million was down 2.8% but on a comparable week basis was up 1.2%.

Net interest expense for the quarter increased to $3.7 million, up from $2.6 million in the prior year, driven by increases in the underlying LIBOR rate and higher average debt levels resulting from our capital allocation initiatives, including share repurchases and the quarterly cash dividends.

Dave & Buster's Inc.
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PLAY
Dave & Buster's Inc.
Audited Copy
Dave & Buster's (PLAY), Q4 2019, Apr 2, 2019
Dave & Buster's (PLAY), Q4 2019, Apr 2, 2019
Dave & Buster's Q4 earnings were positive, is there a runway?
Let's check the transcript
Financial
Cost-Price
TRANSCRIPT:
FedEx Corporation (FDX), Q3 2019, Mar. 19, 2019
Call Time:
3/19/2019, 5:30pm
Transcript Analysis Time :
3/21/2019, 2:50pm

Growing international macroeconomic conditions and weaker global trade growth trends continue. Asia volume weakness, which we experienced during peak season, deepened post-Chinese New Year. Reflecting these macro challenges, FedEx Express International revenues declined year-over-year in the third quarter. U.S. volume growth continued to benefit from the expansion of our e-commerce solutions. Yields were pressured by this expansion, lower weight per shipment and service mix changes. With that, total FedEx Express revenue declined 1% year-over-year in Q3 versus growth of 8% year-over-year in the first half of this fiscal year.

Our Strategic Management Committee has been investing a significant amount of time identifying operational and financial steps to address the challenges we are facing. To mitigate the lower-than-expected revenue trends, we have further reduced our variable incentive compensation, launched our voluntary employee buyout program and limited hiring and discretionary spending.

FedEx Ground and FedEx Freight both had strong volume and revenue growth in the third quarter. FedEx Freight continued to focus on balanced volume and yield growth and produced another strong quarter of operating results. FedEx Ground operating results were negatively impacted by the inflationary impact, the tight labor market on our purchase transportation rates and employee wages. Higher costs related to staffing and network expansion in the January launch of year-round 6 day per week operations also impacted Ground's performance.

International and supply chain challenges are to blame

Growing international macroeconomic conditions and weaker global trade growth trends continue. Asia volume weakness, which we experienced during peak season, deepened post-Chinese New Year. Reflecting these macro challenges, FedEx Express International revenues declined year-over-year in the third quarter. U.S. volume growth continued to benefit from the expansion of our e-commerce solutions. Yields were pressured by this expansion, lower weight per shipment and service mix changes. With that, total FedEx Express revenue declined 1% year-over-year in Q3 versus growth of 8% year-over-year in the first half of this fiscal year.

Our Strategic Management Committee has been investing a significant amount of time identifying operational and financial steps to address the challenges we are facing. To mitigate the lower-than-expected revenue trends, we have further reduced our variable incentive compensation, launched our voluntary employee buyout program and limited hiring and discretionary spending.

FedEx Ground and FedEx Freight both had strong volume and revenue growth in the third quarter. FedEx Freight continued to focus on balanced volume and yield growth and produced another strong quarter of operating results. FedEx Ground operating results were negatively impacted by the inflationary impact, the tight labor market on our purchase transportation rates and employee wages. Higher costs related to staffing and network expansion in the January launch of year-round 6 day per week operations also impacted Ground's performance.

FedEx Corporation
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FedEx Corporation
Audited Copy
FedEx Corporation (FDX), Q3 2019, Mar. 19, 2019
FedEx Corporation (FDX), Q3 2019, Mar. 19, 2019
What's at the root of FedEx's Q3?
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Deception
Guidance
The Kroger Co., (KR), Q4 2019, Mar. 7, 2019
Call Time:
3/7/2019, 10:00am
Transcript Analysis Time :
3/7/2019, 3:36pm

I'll take that one, Karen. Well, obviously, a lot of -- we made a lot of investments in 2018, which affects a wide variety of different lines. And it's difficult to say, obviously fuel had a good quarter or -- and a good year. When you look at trying to back into the core, what do you do with digital, which has been a headwind, and we continue to invest in digital. If you don't back that headwind out and put that in the growing a new business category, yes, that would drag the core down the way you do it. But if you look at the digital investments we've made along with the other investments we've made, in the fourth quarter, I talked about the new warehouses that we opened up to support our digital business. That -- if you look at that all in the core, yes, the core declined. I won't go into a specific number, but it really is how you slice and dice all of this. All of that said, and I wouldn't necessarily discourage you from looking at the different pieces of the business because we do have to do a better job of helping you all understand and explain where the alternative profit streams are going to come from because some of them won't affect the top line. Some of them will just be profit. But when you're trying to transform a company and you have a first year of a plan, we take all the pieces and all the available flows and profitability together and then decide how to invest them in which business, which is what we did in 2018.

Pressure increasing from digital and core competitors

I'll take that one, Karen. Well, obviously, a lot of -- we made a lot of investments in 2018, which affects a wide variety of different lines. And it's difficult to say, obviously fuel had a good quarter or -- and a good year. When you look at trying to back into the core, what do you do with digital, which has been a headwind, and we continue to invest in digital. If you don't back that headwind out and put that in the growing a new business category, yes, that would drag the core down the way you do it. But if you look at the digital investments we've made along with the other investments we've made, in the fourth quarter, I talked about the new warehouses that we opened up to support our digital business. That -- if you look at that all in the core, yes, the core declined. I won't go into a specific number, but it really is how you slice and dice all of this. All of that said, and I wouldn't necessarily discourage you from looking at the different pieces of the business because we do have to do a better job of helping you all understand and explain where the alternative profit streams are going to come from because some of them won't affect the top line. Some of them will just be profit. But when you're trying to transform a company and you have a first year of a plan, we take all the pieces and all the available flows and profitability together and then decide how to invest them in which business, which is what we did in 2018.

The Kroger Co.
Financial
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The Kroger Co.
Edited Copy
The Kroger Co., (KR), Q4 2019, Mar. 7, 2019
The Kroger Co., (KR), Q4 2019, Mar. 7, 2019
Kroger disappointed, what's the source?
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Financial
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