Tuesday Morning Rebel Brief — Oh SNAP

Snap Inc. ($SNAP) Posts Worst Day In Its History

The biggest news this morning comes from $SNAP. CEO Evan Spiegel issued a grim warning after hours on Monday: Snap was going to miss both its revenue and EPS targets this quarter. 

The macroeconomic environment has deteriorated further and faster than anticipated.

As a result, $SNAP has lost more than 33% of it’s value overnight, dropping below $15 per share. For comparison, $SNAP started the calendar year $46.59. The company was already down more than 50% YTD without counting todays massive loss — the worst day in $SNAP’s history. 

Over $100B In Value Removed From Social Media, Ad Stocks

It isn’t just $SNAP that’s suffering on the news. The market has taken this as an omen. According to an analyst at Piper Sandler, 

“Our sense is this is more macro and industry-driven versus Snap specific,”

As a result of the Snapchat shake-up:

• Twitter ($TWTR) is down -3.2%
• Alphabet ($GOOGL) is down -4.37%
• Roku ($ROKU) is down -6.83%
• Meta ($FB) is down -7.86%
• The Trade Desk ($TTD) is down -11.43%
• Pinterest ($PINS) is down -17.04%

Abercrombie & Fitch (A&F) Down 31% On Poor Earnings & Guidance

$ANF reported a steep EPS miss of -485.7% (a loss of -$0.27 versus an expected positive $0.07). The mall retailer reported a revenue beat of 1.9% ($812.76M vs an expected $797.93M).

Freight costs. Product costs. Inflationary pressures. This was the story behind Walmart, Target, Ross, and many other retailers this season. Abercrombie & Fitch was no exception. 

The retailer said it expects second quarter revenue to come in at $843.2M — the Q2 consensus estimate was $890.12M. The company also lowered it’s 2023 revenue expectations to reflect the new inflationary headwinds. 

Best Buy ($BBY) Reports a Mixed Quarter

Best Buy reported an EPS miss of -1.3% ($1.57 vs an expected $1.59) and a revenue beat of 2% ($10.65B vs an expected $10.44B). The computer and tech retailer is currently trading down by 0.5% in the premarket.

Best Buy also slightly lowered it’s 2023 guidance, expecting earnings of between $8.40 to $9.00 per share versus a previous guidance of $8.85 to $9.15 per share. The company now expects revenue of $48.30B to $49.90B, which is lower than it’s previously expected revenue of $49.30B to $50.80B.