This comes amid growing concerns about inflation, and yet, Ron Gross, to borrow from Taylor Swift, investors are shaking off those inflation fears.
But the question is, will all that stimulus money that was pumped into the economy plus the fed’s quantitative easing programs lead to more sustained inflation? Supply chain problems, labor shortage have added to the increase in prices we’re seeing now.
We definitely should watch that, but I am glad to see the Fed’s recent announcement that it will begin to taper its quantitative easing program, it’s bond buying program in August or September.
Gross: No, primarily because stocks are a pretty good place to be even in an inflationary environment.
It’s something worth keeping in mind and given the nature of their market that they pursue in pets, there is some durability there I think, but when we look at the actual quarter itself, really strong results.
Hill: Huge first quarter results from RH, the home furnishings retailer, formerly known as Restoration Hardware, had profits and revenue higher than expected.
But still this is pretty exciting and we’ve talked about the performance of the stock before over the last five years up more than 2,500% as they really transform their business and this quarter is no exception.
Shares up more than 5% this week after first quarter profits came in higher than expected.
With that said, you could be forgiven if this company was off of your radar over the last five or so years because the top-line really hasn’t gone anywhere as we have seen so much saturation in the mobile market.
All in all, I think this is a company that’s made a lot of investments, really excited to see what they’ve got in store for the next decade.
Wall Street was expecting Dave and Buster’s to report a loss in the first quarter but the restaurant and entertainment chain surprised the analysts with an actual profit Ron, shares of Dave and Buster’s up 7% this week.
They’ve provided us with comparisons to 2019 which a lot of retailers, a lot of restaurants have been doing, I appreciate that.
Overall, comparable store sales declined 35% when you compare it to the first quarter of 2019, so it’s just very important to get a good picture of what’s going on there.
It was up a decent amount but not so much that they left a lot of money on the table.
The value proposition seems to be that the workplaces tend to shape themselves based on pre-packaged software that they are given and monday.com is ultimately trying to let the workplace shape the software based on what it needs.
Moser: I was going to lead with that Chris, but decided to try to be a little bit more optimistic.
But these numbers look pretty good to me, so total sales up 31% inside the store revenue up almost 15% inside same-store sales up almost 13% as guest counts steadily improve as the pandemic subsides, obviously inside margins improved by 100 basis points.
They’ve got both organic growth as well as acquisition growth on the table here, which will bode well for the coming quarters and end years.
Hill: Interesting to see that expansion because in different parts of the country, people are in some cases very loyal to their brand.
Their new stores, as you said, are also Illinois and Nebraska is big for their new acquisition.
I don’t know, Jason, this seems like one of those quarters that if you’re a shareholder, it wet your appetite but they’re moving in the right direction.
Active clients, 4.1 million now, that was up 20% from a year ago and net revenue per active client, however, down slightly $481, it’s down 3% from a year ago.
Hill: I don’t know about you, but the first time I had heard of Daniel Kahneman, it was in Michael Lewis’s best-selling book, The Undoing Project: A Friendship That Changed Our Minds.
Maria Gallagher: When we’re talking about investing, there is an incredible amount of information that we get about companies on a minute-by-minute basis.
There are a few, very few who are able to do this, mostly with mathematical tools, but individuals who have just the feeling that they can do it, had better take a shower.
In general, you would say that the larger the market, the closer it is likely to be statistically, to be more or less wise, more or less efficient, and deciding that you can beat it, is a risk that you’re taking.
Kahneman: Actually, when we looked at it from the little information we have, and this is really the study of noise in some way, we always knew that there is noise because methods of judgment by definition, we expect some disagreement.
Kahneman: Well, one obvious way of reducing noise is taking judgment out of the equation, by imposing rules or algorithms. But we know, and when that happens, because algorithms are noise-free, when you present the same problem to an algorithm on two occasions, you’ll get the same answer, which isn’t true when you ask two underwriters.
You don’t want to do without intuition, but intuition tends to jump to conclusions, and so so you are better off by delaying intuition, looking at the various facets of the problem, and when you have the whole profile of the problem, then and only then, let your intuition free in integrating the information.
Another thing that happens is that when you conduct an interview in what is called the non-structured way, then what happens is you get your gut feeling and you spend the rest of the time confirming your gut feeling by asking questions that effectively lead the candidate to confirm your initial hunters.
Hill: If you’re listening to us on the radio, we have a new station to welcome to the Motley Fool Money affiliate family, KRQX AM 600 in Youngstown, Ohio.
From long time listener Gary Car in Tucson, Arizona, and he adds parenthetically, “Warm, dry, and cicada free.” , Spotify, Apple, or on the flip side, if the other aspects add up, does it matter if you don’t, particularly like the service or product?” It’s a great question, Jason, because there are great investments to be had in businesses that for one reason or another rub people the wrong way.
Because I feel like all of those things that they are asking me to pay for, I feel like those are the things they should have been developing here over the last five, six, seven years that they just didn’t.
Then conversely, I don’t think I would enjoy being an owner of a company for five or ten years that I didn’t think was doing a good job, or didn’t make the world a better place, or didn’t make a product or service that I agreed with.
Hill: Well, and it’s an opportunity, particularly as you said, Ron, consumer-facing businesses, to do your own boots on the ground research to see what the stores are like? Are they crowded? What is the staff like? All that sort of thing.
In that just as they tremendously installed a base that really ramps up those switching costs as time goes on and the adhesive sensors, those consumables, the blades that they’re very high margin and that’s something that they will continue to sell as long as they keep those machines installed.
I just remember I knew this older kid in my neighborhood growing up, he was Ian, that was his name.
I’m not sure where it is right now, but like I’ve told you before, my sartorial sensibilities are not the greatest.
But this company has actually been incorporated in Dublin, Ireland since 2009, so some changes to the company over the years, but they produced steady growth, strong cash flow.
Boyd: I was going to make fun of the name accent on the future, but I was thinking about it just now, and Accenture is probably the best they could have done.
Hill: No kidding, right? Hopefully they got more than just a gift certificate or something like that.