Dollar Tree, Inc. (DLTR) reported its first quarter earnings on Wednesday, June 5. The discount retailer's stock fell approximately 5% despite reporting net sales for the quarter that met expectations.

Net sales reached $7.6 billion during the quarter. This was up 4.2% from $7.3 billion in net sales last year at this time and was in line with analysts' expectations.

"We are pleased to deliver first quarter adjusted EPS results that are towards the high end of our outlook range," said Dollar Tree CEO, Rick Dreiling. "At Dollar Tree we remain focused on rapidly rolling out our next generation of multi-price stores and at Family Dollar we are taking the steps necessary to position the business for long-term success."

The company posted net income of $300.1 million or $1.38 per adjusted share. This was up from $299.0 million or $1.35 per adjusted share during the same quarter last year.

Dollar Tree opened 116 new Dollar Tree stores and 41 Family Dollar stores during the quarter, ending the quarter with a total of 16,397 stores throughout North America. The company continued to expand its multi-price Plus products, which are products priced between $3 to $5, to an additional 926 Dollar Tree stores. Family Dollar Stores generated $3.5 billion in net sales during the first quarter, up from $3.4 billion in the same quarter last year. The company reaffirmed its guidance and anticipates net sales to be in the range of $31.0 billion to $32.0 billion for fiscal 2024.

Dollar Tree, Inc. (DLTR) shares ended the week at $111.29, down 5.5% for the week.

Campbell Soup Dishes Up Results

Campbell Soup Company (CPB) released its third quarter earnings report on Wednesday, June 5. Despite reporting increased net sales for the quarter, the company's shares decreased almost 2% following the release.

Net sales came in at $2.37 billion for the quarter, up 6% from $2.23 billion in net sales during the same quarter last year. This exceeded analysts' expectations of $2.34 billion in net sales.

"We delivered a solid third quarter with sequential volume improvement, stable organic net sales, double-digit adjusted EBIT and adjusted EPS growth," said Campbell's CEO, Mark Clouse. "We are excited about the integration of the Sovos Brands business, which already is bringing significant incremental growth to our company as we continue to navigate the pace of consumer recovery."

For the quarter, Campbell Soup reported net income of $133.0 million or $0.44 per adjusted share. This was a decrease from $160.0 million in net income or $0.53 per adjusted share at this time last year.

The company's Meals & Beverages segment, which includes its line of soups and beverages such as Swanson, Prego, Pace, V8 and Pacific Foods, posted revenues of $1.27 billion, a 15% increase in net sales for the quarter. The Snacks segment, which includes Pepperidge Farm cookies and Goldfish crackers, reported a 2% decrease in net sales and net revenue of $1.10 billion. Campbell Soup raised its full year fiscal 2024 guidance and now expects an increase of net sales of 3% to 4% and an increase in adjusted share earnings of 2% to 3% to $3.07 to $3.10.

Campbell Soup Company (CPB) shares ended the week at $42.86, down 3.7% for the week.

Lululemon Reports Comfortable Earnings

Lululemon Athletica, Inc. (LULU) released its first quarter earnings report on Wednesday, June 5. The athletic-apparel company's quarterly revenue increased year-over-year, causing its shares to increase by almost 4%.

Lululemon reported quarterly revenue of $2.2 billion. This was a 10% increase from last year's first quarter revenue of $2.0 billion and met analysts' expectations for the quarter.

"In the first quarter, we saw strong momentum in our international markets, demonstrating how our brand continues to resonate around the world," said Lululemon CEO, Calvin McDonald. "Guests responded well to our product innovations across categories, and we are pleased by the progress we are making to optimize our U.S. product assortment. Looking ahead, we continue to have a significant runway for growth and are confident in our team's ability to powerfully deliver for our guests in 2024 and beyond."

The company announced net income of $321.4 million or $2.54 per adjusted share for the quarter. This is up from net income of $290.4 million or $2.28 per adjusted share one year ago.

Lululemon opened five new company-operated stores and closed five during the first quarter, maintaining a total of 711 open stores at the end of the quarter. The company reported comparable sales increased 6% in the first quarter. Inventory for the first quarter decreased 15% to $1.3 billion compared to the $1.6 billion at the end of the first quarter last year. The company expects fiscal 2024 revenue between $10.7 billion and $10.8 billion or $14.27 to $14.47 per adjusted share.

Lululemon Athletica, Inc. (LULU) shares closed at $317.86, up 1.8% for the week.

The Dow started the week of 6/3 at 38,710 and closed at 38,799 on 6/7. The S&P 500 started the week at 5,297 and closed at 5,347. The NASDAQ started the week at 16,866 and closed at 17,133.

U.S. Treasury yields fell early in the week as markets reacted to the latest data on U.S. labor demand. Yields experienced a surge toward the end of the week after the May jobs report was released and jobless claims continued to rise back to pre-pandemic levels.

On Tuesday, the U.S. Department of Labor announced that U.S. jobs openings, a measure of labor demand, fell 296,000 to approximately 8.06 million in April. This was less than the 8.4 million job vacancies expected for April and marked the lowest level for the available jobs per applicant since February 2021.

"From a policy perspective, the Fed's challenge will be to maintain rates at a level that not only helps keep inflation in check but also prevents a significant weakening in the labor market going forward," said chief U.S. economist at High Frequency Economics, Rubeela Farooqi.

The benchmark 10-year Treasury note yield opened the week of June 3 at 4.50% and traded as low as 4.27% on Thursday. The 30-year Treasury bond opened the week at 4.65% and traded as low as 4.43% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased 8,000 to 229,000 for the week ending June 1. Continuing unemployment claims increased 2,000, reaching over 1.79 million. On Friday, the May jobs report indicated strong growth of 272,000, exceeding estimates of 180,000. The unemployment rate rose to 4%, reaching the highest level in two years, up from 3.9%.

"The level (of weekly jobless claims) remains in a range that suggests the labor market remains tight," said Thomas Simons, U.S. economist at Jefferies. "Continuing claims are still very low by any historical standard, and we still see the data as supporting the notion that people who lose a job are able to find a new one with relative ease."

The 10-year Treasury note yield finished the week of 6/3 at 4.44%, while the 30-year Treasury note yield finished the week at 4.56%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, June 6. The survey showed mortgage rates decreased for both the 30-year and 15-year fixed rates to under 7%.

This week, the 30-year fixed rate mortgage averaged 6.99%, down from last week's average of 7.03%. Last year at this time, the 30-year fixed rate mortgage averaged 6.71%.

The 15-year fixed rate mortgage averaged 6.29% this week, down from 6.36% last week. During the same week last year, the 15-year fixed rate mortgage averaged 6.07%.

"Mortgage rates retreated this week given incoming data showing slower growth," said Freddie Mac's Chief Economist, Sam Khater. "Rates are just shy of 7%, and we expect them to modestly decline over the remainder of 2024. If a potential buyer is looking to buy a home this year, waiting for lower rates may result in small savings, but shopping around for the best rate remains tremendously beneficial."

Based on published national averages, the savings rate was 0.45% as of 05/20. The one-year CD averaged 1.80%.

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