Jack in the Box Inc. (JACK) reported its second quarter earnings on Tuesday, May 14. Despite reporting decreased revenue and earnings for the quarter, the fast-food company’s shares rose almost 9% following the release of the report.

The company reported revenue of $365.3 million for the quarter, missing analysts’ expected revenue of $368.6 million. Quarterly revenue was down from $395.7 million reported at the same time last year.

"I am proud of the execution by our Jack and Del Taco teams, delivering better-than-expected earnings and margin performance while navigating through increasing macro headwinds, pressure on low-income consumers and the implementation of California's minimum wage legislation," said Jack in the Box CEO, Darin Harris. "Top-line performance was impacted by the shift in consumer behavior and an unexpected delay in our Smashed Jack launch, but sales have improved since its introduction in mid-March. We have a clear plan to regain same store sales traction through a strong marketing calendar, new LTO's, and an expanded value menu throughout the remainder of 2024.”

The company reported net earnings of $25.0 million for the quarter or $1.26 adjusted earnings per share. This is down from $26.5 million or $1.27 adjusted earnings per share during the same quarter last year.

Jack in the Box reported same-store sales decreased 2.5% during the quarter, while Del Taco same-store sales fell 1.4%. The decline in sales was partially offset by an increase in the average check. During the second quarter, the company entered into franchise development agreements for expansion, including 31 future Jack in the Box locations in Florida, 10 Del Taco locations in Atlanta and three Del Taco locations in North Carolina. The fast-food chain opened six new restaurants during the quarter and had no closures. The company’s Board of Directors declared a cash dividend of $0.44 per share payable on June 25, 2024, to shareholders of record as of June 6, 2024.

Jack in the Box Inc. (JACK) shares ended the week at $52.85, down 1% for the week.

Home Depot Hammers Out Earnings

The Home Depot, Inc. (HD) released its first quarter earnings report on Tuesday, May 14. The home improvement retailer reported lower revenue and earnings for the quarter.

Home Depot reported first quarter revenue of $36.4 billion, down 2.3% from $37.3 billion during the same quarter last year. This missed analysts’ expected revenue of $36.7 billion for the quarter.

"The team executed at a high level in the quarter, and we continued to grow market share," said Home Depot CEO, Ted Decker. "And while the quarter was impacted by a delayed start to spring and continued softness in certain larger discretionary projects, we feel great about our store readiness, our product assortment in stores and online, and our associate engagement."

Home Depot reported quarterly net earnings of $3.6 billion or $3.63 per adjusted share. This was a 7% decrease from net earnings of $3.9 billion or $3.82 per adjusted share during the same quarter last year.

The Atlanta, Georgia-based home improvement retailer reported that its U.S. comparable sales declined 3.2% during the first quarter. Home Depot also reported a decrease in customer transactions of 1.0% to 386.8 million during the quarter. Customers also spent less during the quarter as the average ticket fell 1.3% to $90.68. The company reaffirmed its guidance and expects total sales to increase approximately 1.0% for the full year but comparable sales to fall by 1.0%.

The Home Depot, Inc. (HD) shares ended the week at $344.21, down 1% for the week.

Walmart Releases Earnings Report

Walmart Inc. (WMT) announced its first quarter earnings on Thursday, May 16. The company’s shares rose almost 6% after the company delivered an earnings report that included both strong revenue and sales growth.

The company posted quarterly revenue of $161.5 billion, up 6% from $152.3 billion reported during the same quarter last year. This exceeded analysts’ expectations of $159.5 billion.

“Our team delivered a great quarter,” said Walmart CEO, Doug McMillon. “Around the world our goal is simple – we are focused on saving our customers both money and time. It is inspiring to see how our associates are simultaneously executing the fundamentals and innovating to make shopping with us more enjoyable and convenient. We are people-led and tech-powered, and that combination is propelling our business.”

For the quarter, Walmart reported net income of $5.1 billion or $0.63 per adjusted share. This was up from the $1.7 billion or $0.21 per adjusted share reported in the same quarter the previous year.

The Arkansas-based retailer reported eCommerce sales growth of 21% globally for the quarter. Walmart’s U.S. comparable sales, excluding fuel, increased 3.8% for the quarter. Walmart’s membership-based warehouse store, Sam’s Club, also reported an increase of 4.4% in comparable sales, excluding fuel. The company revised its second quarter outlook to expect net sales to increase between 3.5 to 4.5% and for its full-year adjusted earnings per share to be between $2.23 to $2.37.

Walmart, Inc. (WMT) shares ended the week at $64.65, up 7% for the week.

The Dow started the week of 5/13 at 39,591 and closed at 40,004 on 5/17. The S&P 500 started the week at 5,233 and closed at 5,303. The NASDAQ started the week at 16,400 and closed at 16,686.

U.S. Treasury yields edged lower early in the week as investors digested the latest consumer data. Yields moved lower later in the week after investor’s digested inflation data and declining unemployment claims.

On Wednesday, the U.S. Department of Labor announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, rose 0.3% in April, less than economists’ expected growth of 0.4%. The CPI year-over-year increased to 3.4%, slightly down from 3.5% from March’s annual gain but met economists’ expectation for April’s year-over-year growth.

"The lack of a nasty surprise this time around is welcomed," said senior economist analyst at Bankrate, Mark Hamrick. "With the 3.4% year-over-year headline increase and 3.6% in the core (excluding food and energy), these remain irritatingly high. The status of the battle against inflation requires that interest rates remain elevated in the near-term."

The benchmark 10-year Treasury note yield opened the week of May 13 at 4.50% and traded as low as 4.31% on Thursday. The 30-year Treasury bond opened the week at 4.64% and traded as low as 4.47% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 10,000 to 222,000 for the week ended May 11. Continuing unemployment claims increased by 13,000 to reach 1.79 million.

“Claims had remained unusually steady and low by historical standards signally that the labor market remains strong, so this partial reversal suggests the previous week’s jump was more noise than signal,” said economic advisor at PNC Financial Services, Stuart Hoffman.

The 10-year Treasury note yield finished the week of 5/13 at 4.43%, while the 30-year Treasury note yield finished the week at 4.56%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, May 16. The survey showed mortgage rates slightly alleviating for the second straight week.

This week, the 30-year fixed rate mortgage averaged 7.02%, down from last week’s average of 7.09%. Last year at this time, the 30-year fixed rate mortgage averaged 6.39%.

The 15-year fixed rate mortgage averaged 6.28% this week, down from 6.38% last week. During the same week last year, the 15-year fixed rate mortgage averaged 5.75%.

“Mortgage rates decreased for the second consecutive week,” said Freddie Mac’s Chief Economist, Sam Khater. “Given the news that inflation eased slightly, the 10-year Treasury yield dipped, leading to lower mortgage rates. The decrease in rates, albeit small, may provide a bit more wiggle room in the budgets of prospective homebuyers.”

Based on published national averages, the savings rate was 0.46% as of 04/15. The one-year CD averaged 1.81%.

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