🦅 This Exceptional Stock is up 108%

MARKET UPDATE

Good Morning Investor! Shares of grocery store chain Kohls Corp (KSS) took a nosedive, plummeting 22% after the company reported a massive earnings miss and took a chainsaw to its full-year guidance. It seems Kohl’s is stuck in the express checkout line of investor disappointment. Meanwhile, in the digital realm, shares of cybersecurity firm Okta (OKTA) fell over 6% despite the company boosting its earnings outlook.

TODAY’S BIG HEADLINES

This Exceptional Apparel Brand is up 108%

Salesforce is Back to its Old Ways

Riding the Cannabis Wave

CONSUMER DISCRETIONARIES

This Exceptional Apparel Brand Keeps Surging🦅

New Look, New Money: Abercrombie and Fitch’s (ANF) has come a long way since its days as a humble hunting gear retailer in the 1890s. This week, the company strutted its stuff on the earnings catwalk, reporting a double beat that sent shares skyrocketing by 25%. It seems this old dog has learned some stylish new tricks!

A Brand Reborn: Abercrombie's history is a fashion show in itself, each era showcasing a different look. None, however, have been quite as effective as the current style under CEO Fran Horowitz since 2017. The brand has managed to reinvent itself and win the hearts of the younger crowd, unlike some brands that are still fumbling with the fashion remote (cough Victoria’s Secret cough).

• By shedding its exclusive "cool kid" vibe, revamping its product lineup, and hopping on the 90s nostalgia bandwagon beloved by Millennials and Gen Zers, Abercrombie has become a fashion phoenix.

• The apparel company is also planning on launching new stores in Germany, the UK, and the US along with testing out new apparel lines including wedding attire.

Singing Numbers: The rebranded apparel company just reported its most impressive first quarter results ever. Despite facing tough comparisons, Abercrombie has managed to keep the momentum going with double-digit growth.

• Revenue hit a high note at $1.02 billion, outstripping the expected $963.3 million and marking a 22% growth compared to last year.

• Earnings per share rolled in at $2.14, well above the $1.74 expected.

• And profits? They exploded by 586% year-over-year, jumping from $16.6 million to a whopping $113.9 million. Who knew balance sheets could be so glamorous?

Abercrombie’s Crystal Ball: To top off these stellar financials, management gazed into their crystal ball and liked what they saw. They boosted their revenue forecast for fiscal year 2025, now predicting a 10% growth—beating the consensus estimates of 7%. They're also expecting revenue to grow in the teens and earnings to rise by 9% in the second quarter. Clearly, Abercrombie isn’t just riding the wave, they’re making it.

B2B SOFTWARE

Salesforce is Back to its Old Ways👎

Broccoli For Dinner: On Wednesday evening, after the market closed, B2B software provider Salesforce (CRM) reported its quarterly earnings. Unfortunately, much like a dog being fed a plateful of vegetables, investors were left with a sour taste. Salesforce’s first revenue miss since 2016 sent shares diving 18% in pre-market trading on Thursday.

Slimdown Backfire: This unexpected plot twist comes on the heels of Salesforce adopting the Meta playbook—laying off staff to become leaner and meaner, which initially led to improved margins and higher profits. However, it seems the company has reverted to its old habits of questionable capital allocation and management misadventures. The first quarter saw Salesforce grappling with budget scrutiny and longer deal cycles than usual.

Financial Disappointment: Overnight, Salesforce transformed into the ugly stepchild of the mega-cap world following its earnings call, where it reported a miss on sales but a slight beat on earnings. Here’s the lowdown:

• Revenue came in at $9.13 billion, below expectations of $9.17 billion. This represents sales growth of 11% year-over-year.

• Adjusted earnings per share was $2.44 vs the expected $2.38—a small victory, but a victory nonetheless.

• On a brighter note, the company boasted a record level of free cash flow for the quarter and repurchased $2.2 billion worth of shares.

Soggy Fortune Cookie: Management also provided some rather soft guidance which left analysts feeling underwhelmed. The company is forecasting for the second quarter, sales of $9.2 billion and earnings per share of $2.34 well below the analyst estmates of $9.37 billion in sales and $2.40 in earnings per share.

• For fiscal 2025, the company did manage to lift its earnings per share forecast to a range of $9.86 to $9.94. However, revenue guidance remained unchanged and below expectations.

SIN STOCKS

Riding the Cannabis Wave🌿

Blazing a New Trail: For the longest time, a niche of investors has been chanting for the mass adoption of cannabis, predicting shares of its producers would skyrocket. Until recently, these hopes were more pipe dream than reality. But it seems times are finally changing, with shares of Canopy Growth Corp (CGC) lighting up 8% after reporting quarterly earnings on Thursday morning.

Rising Adoption: Move over, booze—there’s a new favorite in town. Daily cannabis consumption in the US has officially surpassed alcohol for the first time. Carnegie Mellon University finding that as of 2022, there were 17.7 million daily cannabis users compared to 14.7 million daily alcohol drinkers.

• These figures represent a near 15 fold increase in usage since 1992, when there were a mere 900,000 daily users of the plant.

Financial Gymnastics: Canopy Growth pulled off an impressive financial backflip, reporting narrower losses thanks to slashing operational costs. Here’s the lowdown:

• Revenue grew 5% year-over-year reaching $72.8 million CAD.

• Earnings per share came in at $

• Total operating expenses saw a significant decline from $480.46 million down to $122.2 million CAD. This resulted in a net loss of just $92.3 million CAD for the quarter, down from a whopping $640.1 million.

Secret Sauce: A few key factors drove these promising results. Notably, the cost of goods sold in Canada dropped by 54%. Additionally, medical cannabis revenue in Canada grew by 16%, and sales of Canopy’s Storz & Bickel vaporizer brand hit a new record.

Wall Street Whispers: Shares of Canopy Growth are up a whopping 81% year-to-date while the AdvisorShares Pure US Cannabis ETF (MSOS) is up an sizzling 16% year-to-date.

MORE NEWS

Additional market-moving events🌎

PayPal Joins Crypto: PayPal have just launches the $PYUSD stablecoin on the Solana blockchain. (Watcher)

The Next AI IPO: Nvidia backed cloud computing startup CoreWeave is in talks to go public via an IPO. The company has gone from just $30 million in revenue in 2022, to being set to generate $5 billion in revenue in 2024 thanks to the AI boom. (CRN)

WeDone: Adam Neumann’s pursuit of his former company WeWork has come to an end. (nytimes)

EARNINGS

This Week’s Earnings Calendar📅

OUR PICKS

Our selections performance👾

On Monday the 11th of March, we released our “two superperformers” stock picks which we believe will provide significant outperformance compared to the S&P 500.

Here’s how the two stocks have performed since then:

• Evolution AB: 1,112.00 SEK (📉-15.27%)

• Hims & Hers Health: $20.98 (📈+44.92%)

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