3 Stocks to Watch Next Week - February 1 - February 5

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Mattel, Chipotle, and GoPro are all set to report earnings next week.

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3 Stocks to Watch Next Week - February 1 - February 5

  1. 1. February 1 – February 5 3 Stocks to Watch Next Week Mattel, Chipotle, and GoPro 1
  2. 2. 1) Mattel Inc. • The toymaker is set to report its fourth quarter results after the market close on Monday, Feb. 1 • After a disastrous holiday season in 2014, plagued with basic execution issues, Mattel needs to prove to investors that its turnaround efforts are making progress 2
  3. 3. 1) Mattel Inc. Q4 2014 • Global sales slumped 6% year-over-year • Barbie sales fell 12%, Fisher-Price sales fell 11%, American Girl sales fell 4%, and Hot Wheels sales rose 5% • Operating profit plunged 50% year-over-year, driven by lower revenue and higher costs Q4 2015 • Analysts expect a 4.2% year-over-year decline in sales, with currency having a major impact • Non-GAAP EPS is expected to rise to $0.61, up from $0.52 during the year-ago quarter • Cost cutting should help boost margins despite lower sales 3Source: Mattel, Seeking Alpha, and Yahoo Finance
  4. 4. 1) Mattel Inc. • Shares of Mattel are nearly flat over the past year but down substantially since the start of 2014 • Profits have collapsed as the company struggles with a lower level of sales • The turnaround effort is making progress, but demand for core brands remains weak, and a strong dollar isn’t helping 4
  5. 5. 2) Chipotle Mexican Grill Inc. • The fast casual restaurant chain is set to report its fourth quarter results after the market close on Tuesday, Feb. 2 • With comparable sales expected to plummet due to food safety issues, investors will be looking for any good news from the company 5
  6. 6. 2) Chipotle Mexican Grill Inc. Last Quarter • Revenue rose 12.2% year-over-year to $1.2 billion • Comparable restaurant sales increased 2.6% • EPS came in at $4.59, up 10.6% year-over-year • Guided for low single-digit comparable sales growth in 2016 This Quarter • Chipotle expects comparable sales to decline by 14.6% • EPS between $1.70 and $1.90 expected, down from $3.84 in the prior year period • Comparable sales for the month of December plunged 30% 6Source: Chipotle, Seeking Alpha, and Yahoo Finance
  7. 7. 2) Chipotle Mexican Grill Inc. • Shares of Chipotle are down nearly 40% over the past year due to E. coli and norovirus incidents at its stores • Sales could be negatively affected for multiple quarters, or even years, to come • Any good news at all from management could send the stock soaring 7
  8. 8. 3) GoPro Inc. • The action camera company is set to report its fourth quarter results after the market close on Wednesday, Feb. 3 • GoPro’s preliminary results point to a very disappointing holiday season • A steep revenue decline and layoffs have unnerved investors 8
  9. 9. 3) GoPro Inc. Last Quarter • Revenue rose 43% year- over-year to $400 million. • Non-GAAP EPS of $0.25 more than doubled compared to the prior year period • Announced the re-launch of the HERO4 Session at a lower price This Quarter • GoPro expects revenue of $435 million, down 31% year-over-year • The HERO4 Session was a disaster, and a lower price failed to save GoPro’s fourth quarter • 7% of the company’s workforce is being laid off due to the poor results 9Source: GoPro, Seeking Alpha, and Yahoo Finance
  10. 10. 3) GoPro Inc. • GoPro stock has lost more than three-quarters of its value over the past year • Concerns that the action camera market is not big enough to support GoPro’s previous valuation seem to have been borne out • Investors should listen closely to the conference call. Management has a lot of explaining to do 10
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