Market Overview

Reviewing Last Week's Biggest Earnings Reports


Last week was a relatively light week on the earnings calendar, laying the field before third quarter earnings season picks up. Here are the main highlights.


Levi Strauss (NYSE: LEVI) and Paychex Inc (NASDAQ: PAYX) reported their earnings.

Investors were not expecting much good news from Levi Strauss, which was slammed by the pandemic during its second fiscal quarter. But Levi's delivered a surprise, as it achieved profitability and proved its brand has an enduring value. More importantly, Levi's officially entered the resale market last week, being one of the first apparel brands to embrace the idea itself. Besides appealing to sustainable customers of this growing market, this initiative bolsters the company's ability to gather consumer data and then build a digital customer ecosystem out if it. Digital sales were up 50%, accounting for about 25% of its revenue for the latest quarter.

Paychex reported strong results as well, with revenues of $932 million beating expectations by 4.9%. Earnings per share were $0.59, 15% above expectations.


Lamb Weston Holdings (NYSE: LW) made its appearance on the earnings calendar and also exceeded expectations, causing its shares to rise 7.8%. Its first-quarter revenue of $872 million was what the analysts expected, but statutory profit of $0.61 per share was 74% above the forecast.


Domino's Pizza (NYSE: DPZ) reported on Thursday with a mix of positives and negatives. Although revenues increased, costs rose. For the period that ended on September 6th, demand remained strong. But is not merely the pandemic that supercharged sales, as domestic comps have a growth track record that spans over 38 straight quarters with international operations expanding for 107 consecutive quarters.

Some investors were disappointed that the sales weren't as robust as those of Papa John's International (NASDAQ: PZZA) and others noted the elevated expenses that were caused by higher wages and sick pay.

The bottom line is that Dominos' quarterly revenue rose 17.9% to $968 million, but earnings per share were hit and fell short of expectations as they amounted to $2.49 as opposed to $2.79 expected. Consequently, its shares fell more than 6% in morning trading. But it would be a mistake to judge Domino's based on this one quarter, as before this earnings release its shares were up nearly 50% this year. 


Big banks will open the Q3 earnings season, led by JPMorgan Chase & Co (NYSE: JPM), Goldman Sachs Group Inc (NYSE: GS) and Wells Fargo & Company (NYSE: WFC). The financial sector has been one of the worst-performing sectors this year, dropping 18% for the year-to-date through Friday's close. The industry has faced myriad pressures throughout the pandemic, with interest rates remaining near-zero and weighing on banks' net interest income. 

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