Stock Market Daily Update – June 26, 2023

Welcome back to our daily stock update! Today we’ll be highlighting some exciting news from U.S. Global Investors, Crown Crafts, Steelcase, Winnebago Industries, and La-Z-Boy. From noteworthy financial reports to dividend announcements, keep reading to stay in the know on your favorite stocks

avel Company Reports Increased Bookings in Q2 2023

U.S. Global Investors, Inc. (NASDAQ: GROW) Reports Strong Q1 2023 Results; Affirms Confidence in Upcoming Growth

U.S. Global Investors, a global investment advisory firm specializing in various sectors including emerging markets and gold mining, has reported operating income of $730,000 in Q1 2023 on total revenues of $3.6 million. The Company recorded net income of $1.6 million with $0.11 per share in earnings, marking an 89% increase over the previous quarter’s net income. The first quarter of 2023 saw key industries the Company tracks end strongly in positive territory, from gold to airlines to luxury goods.

“Despite the restatement process taking longer than expected, we remained profitable in the first calendar quarter of 2023. Our Global Luxury Goods Fund (USLUX) performed well during the period, with Tesla being the fund’s top-performing holding,” says Frank Holmes, the Company’s CEO and Chief Investment Officer.

Moreover, the Company’s position is strengthened by the fact that the luxury goods sector is showing promising growth, especially in China. Sales of European-listed luxury goods manufacturers and retailers have moved higher on hopes that China’s economic reopening following pandemic lockdowns would increase sales. LVMH, one of the companies GROW has invested in, surpassed a $500 billion market cap in April, becoming the first European company to do so.

My personal thoughts on GROW revolve around the confidence affirmed by the Company in their future growth, especially with the stated resurgence of key industries they track such as gold, airlines, and luxury goods. Furthermore, GROW’s investment in LVMH, coupled with China’s anticipated boost in luxury goods consumption, leads me to remain optimistic about the Company’s position. Additionally, GROW’s AUM of $2.3 billion at period-end reflects the Company’s continued potential for growth.

Overall, I recommend buying GROW stock based on their strong Q1 2023 results and their positive outlook for future growth.

Crown Crafts Reports Mixed Results for Fiscal 2023

Crown Crafts (NASDAQ-CM: CRWS), a company that designs, markets, and distributes infant, toddler, and juvenile consumer products, has reported its fiscal 2023 results. The company faced several challenges throughout the year, including inflationary pressures, decreased consumer spending trends, and excess inventory levels. Despite these challenges, Crown Crafts delivered its thirteenth consecutive year of profitability, thanks to lower marketing and administrative expenses.

In Q4 2023, the company’s net sales decreased by 16%, totaling $21.6 million, compared to $25.7 million in the prior-year quarter. Net income was also impacted, with a decrease of around 66%, totaling $828,000, compared to $2.4 million in the prior-year quarter. Gross margin was 25.7% of net sales, compared to 27.8% in the prior-year quarter. As a result, Crown Crafts declared a quarterly dividend of $0.08 per share of Series A common stock.

For the full year, net sales decreased by 14%, totaling $75.1 million, compared to $87.4 million in fiscal 2022. Gross margin was 26.4% of net sales, compared to 26.7% in the prior year. The net income for fiscal 2023 was $5.7 million, or $0.56 per diluted share, compared to $9.9 million, or $0.98 per diluted share, in the prior year.

The acquisition of Manhattan Group, LLC, which was acquired in March 2023, provides several opportunities to increase Crown Crafts’ top and bottom line in fiscal 2024, including better purchasing power, broader product offerings, and greater distribution channels. Despite the setback, the company remains well-positioned to withstand the macroeconomic environment, thanks to its strong balance sheet.

In my opinion, Crown Crafts’ mixed results are a cause for concern. Although the acquisition of Manhattan Toy is exciting, the decline in net sales and net income is alarming. The company’s efforts to minimize the impact on gross margins and reduce marketing and administrative expenses are commendable. However, given the current market conditions, I would recommend holding off on buying Crown Crafts stock until there are clear signs of growth or buying opportunities. For those who own CRWS, I suggest holding onto the stock for now.

Steelcase Inc. (NYSE: SCS) Reports Revenue Growth and Gross Margin Improvement in Q1 2024

Steelcase Inc., a leading furniture manufacturer for offices, reported a 2 percent increase in revenue for the first quarter of fiscal 2024, compared to the prior year. The company reported a net income of $1.5 million, an improvement compared to a $11.4 million net loss in the prior year.

The revenue growth was primarily driven by higher pricing and faster order fulfillment patterns in the Americas market, offsetting the macroeconomic concerns in the International market. The company reported a decline in orders, adjusted for effects of acquisition, divestitures, and currency translation, which was primarily due to a decline in project business in the Americas and all markets in EMEA and China.

However, the company’s gross margin saw significant improvement, with a 530 basis point increase year-over-year, due to pricing benefits and operational efficiencies. Steelcase Inc. also projects their first half of fiscal 2024 financial targets to be ahead of pace, which is a positive outlook for investors.

As an investor in Steelcase Inc., I am encouraged by the company’s revenue growth and gross margin improvement. Despite the decline in orders, the company is well-positioned to overcome the macroeconomic concerns in the International market. The positive outlook for their first half of fiscal 2024 financial targets is a good sign for the company’s future growth.

I would recommend holding onto the stock for now, as the company shows positive signs of growth in their revenue and gross margin. As always, it’s important to keep an eye on future updates and financial reports, but for now, it seems Steelcase Inc. is on the right track.

Winnebago Industries reports Q3 2023 results with good cash flow and battery solution acquisition

Winnebago Industries, a leading outdoor lifestyle product manufacturer, reported its fiscal Q3 2023 results, showing solid cash flow from operations of $139.6 million and the completion of the acquisition of Lithionics Battery, which accelerates innovation capabilities in diverse battery solutions. Despite challenging market conditions, the company has shown resiliency and strong profitability.

Revenues for the quarter ended May 27, 2023, were $900.8 million, decreasing by 38.2% compared to $1.5 billion for the same period in 2022. The decrease can be attributed to lower unit sales related to RV retail market conditions and higher discounts and allowances. However, the acquisition of Lithionics Battery will allow them to expand their product range and provide innovative solutions in the market.

Although the financial results seem negative, the strong cash flow and acquisition are positive news, indicating the company’s ability to navigate tough market conditions and look to the future.

I recommend holding the stock, as the acquisition of Lithionics Battery will help the company’s diversification and growth in the outdoor lifestyle product market. The company’s ability to maintain strong cash flow despite the decrease in revenues also shows their resilience in challenging markets. Overall, Winnebago Industries continues to be a strong contender in the industry, and the acquisition makes it an even more attractive choice for long-term investors.

La-Z-Boy Inc. Reports Solid Q4 and Record Full Year Results

La-Z-Boy Inc. (NYSE: LZB), a global leader in residential furniture, reported a solid fourth quarter and record full year results for the period ending April 29, 2023. The company’s consolidated sales reached $561 million which is a 12% reduction as compared to last year due to the 53rd week in the previous fiscal year. However, retail segment sales increased by 4% to $243 million, while operating profit margin also increased by 40 basis points to 9.8%.

In fiscal 2023, the company’s consolidated sales reached $2.3 billion, with a 2% increase adjusted for the 53rd week in fiscal 2022. Retail segment sales increased by 22% to $982 million, with record sales, operating profit, and operating margin. La-Z-Boy Inc. also reported record diluted EPS, and cash generated from operating activities more than doubled to $205 million.

I find it impressive that La-Z-Boy Inc. was able to achieve record results in the face of a challenging macroeconomic environment. The company’s strong execution in its company-owned retail stores and disciplined supply chain investments are commendable. La-Z-Boy Inc. is part of my long-term investment strategy, and given its overall solid performance, I recommend holding onto the stock.

Overall, La-Z-Boy Inc. seems to have weathered the economic storm quite well. The increase in retail sales and profit margins is a testament to its unwavering dedication to quality products and services. Given the record-setting results of its full year, the future looks bright for La-Z-Boy Inc.

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