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Lululemon trembles at downbeat forecast

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Last Week’s Highlights

Lululemon forecasts disappointing holidays

Lululemon Athletica Inc forecast that its revenue and profit for the vacation quarter will be below analysts’ estimates. The main reason is that the Canadian sportswear retailer expects shoppers to be more cautious and more reserved about spending on high-priced apparel as the economy suffers from problems such as inflation and later a possible recession. Clearly, this is not the best time for consumers to make purchases of non-essentials, despite the company getting off to a good start with strong traffic over the Thanksgiving weekend. However, the company estimates fourth-quarter revenue between $2.61 billion and $2.66 billion, versus analysts’ estimates of $2.65 billion. Following Lululemon’s forecast, its shares fell 6%. 

Tesla’s impressive Shanghai performance

Tesla ended Friday more than 3% higher in trading after reports emerged about the company’s Shanghai operations and what they did month-over-month. Apparently, according to a report from the China Passenger Car Association, Tesla’s Shanghai plant shipped a total of 37,798 vehicles within the city alone. Across the Asian country, 62,493 vehicles were shipped in total, plus the company also exported 100,291 vehicles made in China in November. However, some electric vehicle companies in China cut production in November, although it is not known if Tesla is among that group. The question remains whether demand for Tesla cars is falling or electric vehicles’ demand in general.

Coming Up This Week

Netflix is uplifted towards 2023

According to research by a Wells Fargo analyst, Netflix has a good outlook for 2023. Despite living in uncertain times due to economic problems and mainly due to recession forecasts, for Steven Cahall, Wells Fargo analyst, Netflix sees light at the end of the tunnel. Cahall noted that the streaming company has a way to stay on top of its market because it is introducing new and exciting content to audiences such as “Wednesday” and “Dahmer – Monster.” In fact, “Dahmer” is already a huge hit due to the fact that it accumulated more than one billion hours watched in the 60 days following its premiere. It is the third title on the platform to reach that level of viewership in such a short time. It is likely that if Netflix continues with these catchy releases and above all drives audiences to consume its content, the company will be able to return to what it once was.

Microsoft-Activision deal halted

The US Federal Trade Commission (FTC) has filed an antitrust complaint against Microsoft and halted the deal with Activision. The FTC believes that the deal would allow Microsoft to harm competition in multiple fast-growing gaming markets and further noted that the company has a history of acquiring popular game content to impede competition from rival consoles. In light of this situation, Microsoft president Brad Smith stated, “While we believed that peace had to be given a chance, we have full confidence in our case and welcome the opportunity to bring it to court.” Following the announcement of Microsoft’s acquisition of Activision at the beginning of the year, Activision’s shares had a significant rise; however, regulatory bodies in several countries are currently investigating this case, so the momentum of the company’s shares has been slowed

MARKET NEWS

Wall Street closed the week with losses. The major U.S. indices had posted two consecutive weeks of gains; however, there are investor fears of a possible economic recession next year due to the prolongation of central bank rate hikes.

During the week, economic data was assessed and speculation was rife about a possible 50 basis point interest rate hike by the US Federal Reserve at its monetary policy meeting next week. The Nasdaq index lost 4%, the S&P 500 was down 3.4% and the Dow fell 2.8%.
3 must-know IPOs to anticipate for 2023.

More Things to Sip On…

Take-Two stock notches up after Citigroup initiates coverage.
Getaround shares tank on first day of trading.
Walgreens offloads $1 billion shares in AmerisourceBergen..

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