Shares in Cheesecake Factory (CAKE) surged 8% in Tuesday’s after-hours trading after the company provided a positive business update given the ongoing Covid-19 pandemic.CAKE began to reopen dining rooms in the second week of May. Currently approximately 25% of the company’s restaurants, including 34 Cheesecake Factory restaurants, have reopened dining rooms with limited capacity.Most encouragingly, the reopened Cheesecake Factory restaurants have recaptured, on average, approximately 75% of prior year sales levels, which CAKE says “reflect[s] continued strength in off-premise sales and building dine-in business.”For restaurants that are continuing to only operate off-premise, current weekly off-premise sales would equate to nearly $4 million per unit on an annualized basis, on average, the company said.Overall, fiscal second quarter to-date comparable sales at Cheesecake restaurants are down 63%, including the impact of 87 full or partial closures due to recent demonstrations across the United States.Looking forward, the company expects to have approximately 65% of dining rooms that closed due to Covid-19 reopened with limited capacity by mid-June, including an anticipated 124 Cheesecake Factory restaurants.However this is subject to any closures due to further demonstrations and other factors related to the ongoing Covid-19 pandemic, CAKE added.Shares in Cheesecake Factory are currently trading down 46% on a year-to-date basis, and analysts have a cautious Hold consensus on the stock. The average analyst price target stands at $22 (3% upside potential). (See CAKE stock analysis on TipRanks.)“We believe management’s efforts to reduce costs will position the company to survive and take share when things normalize but also expect a slower sales recovery this year given its mall dependency and reduced earnings power longer-term from the expensive financing the company secured last month,” BTIG analyst Peter Saleh explained, as he recently reiterated his Hold rating without a price target.Related News: Starbucks Is Said To Further Cut Worker Hours Due To Sales Demand Lyft Rises 5% After-Hours On Strong May Performance More recent articles from Smarter Analyst: * Alibaba Rolls Out Online Business Services As Covid-19 Boosts Digitalization Need * Glu Mobile Sinks On $100M Public Offering Announcement * Zoom Lifts Full-Year Sales Guidance As Quarterly Revenue Balloons 169% * Microchip Gains 7% After-Hours On Boosted Guidance; Top Analyst Ups PT

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Popular video-conferencing company Zoom Video Communications (ZM) far outpaced sales expectations in the first quarter as millions of users flocked to use its technology to host business and social meetings during the coronavirus pandemic.First-quarter revenue surged 169% to $328.2 million year-on-year, beating analysts’ estimates of $202.7 million. Zoom now has about 265,400 customers with more than 10 employees, up about 354% from the same quarter last fiscal year.“The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom,” said Zoom founder and CEO Eric S. Yuan. “Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives. We also supported an unprecedented number of free participants, including over 100,000 K-12 schools.”Commenting on the earnings, five-star analyst Ittai Kidron at Oppenheimer, said that while Zoom reported “exceptional” results, “its gross margin significantly contracted (-1,480bps QoQ and -1,149bps YoY) due to high levels of free meeting minutes (K-12 schools) and increased public cloud hosting costs”. Indeed, cost of revenue in the first quarter skyrocketed 330% to $103.7 million year-on-year.Shares rose 1.9% to close at $208.08 ahead of the earnings release on Tuesday and dropped 1.7% in after-market trading.Looking ahead, the company raised its full-year revenue forecast to a range of $1.78 billion to $1.80 billion from $905 million to $915 million. This compares with analysts’ average estimates of $935.2 million for the fiscal year ending January 2021.Shares have more than tripled this year as Zoom has gone from an average of 10 million daily users to about 300 million this year. The analyst community will now wait to see if the user boom is sustainable as some countries are starting to relax their lockdown restrictions and employees are beginning to go back to their work place.Oppenheimer’s Kidron, who maintained a Hold rating on the stock due to valuation, says that Zoom has seen strong adoption, which calls into question how this develops as businesses reopen.“Zoom reported robust net expansion and user growth,” Kidron wrote in a note to investors. “Going forward, exposure to multiple growth levers (new customer growth and use cases, upselling, cross-selling Rooms/ Phones, int'l expansion, etc.) leaves us feeling positive. However, we admit we likely missed an entry point earlier this year and remain Perform-rated on valuation.”The rest of the Street is cautiously optimistic on the stock. The Moderate Buy consensus showcases 14 Hold and 2 Sell ratings versus 8 Buy ratings. Following this year’s sharp rally the $131.18 average analyst price target, now implies shares may decline 37% from current levels. (See Zoom stock analysis on TipRanks).Related News: Lyft Rises 5% After-Hours On Strong May Performance Beleaguered Hertz Sinks 36% In After-Market On Bankruptcy Protection Filing Carl Icahn Initiates Position in Delek US Holdings, Boosts Occidental Petroleum More recent articles from Smarter Analyst: * Alibaba Rolls Out Online Business Services As Covid-19 Boosts Digitalization Need * Glu Mobile Sinks On $100M Public Offering Announcement * Microchip Gains 7% After-Hours On Boosted Guidance; Top Analyst Ups PT * Cheesecake Factory Spikes After-Hours As 75% Sales Recaptured

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At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each […]

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Shares in Microchip Technology (MCHP) surged 7.4% after-hours on Tuesday, after the company boosted its guidance for net sales and earnings for the 2021 fiscal first quarter as Covid-19 disruptions ease.Microchip now expects consolidated net sales for the June quarter to be $1.247 billion – $1.326 billion, or between flat and down 6% sequentially. That’s versus prior guidance of $1.194 billion – $1.3 billion (down between 2% and 10%).GAAP earnings per share is now expected to be between $0.25 and $0.39 and non-GAAP earnings per share is expected to be between $1.35 and $1.53. The original guidance for GAAP earnings per share was $0.13 to $0.31 with non-GAAP at $1.25 to $1.45.“With two months of the quarter behind us, our business is performing better than we expected during our May 7, 2020 earnings conference call. COVID-19 related supply chain disruptions which were primarily in Malaysia and Philippines have eased. We have begun to make up for lost production and expect to continue to gain ground through the end of this quarter,” cheered Steve Sanghi, Microchip’s CEO.“Our customers’ factories in China are fully back to work. Some of our other customers’ factories in Europe and North America have also started to reopen, including automotive factories where we saw the largest demand destruction,” he added.Shares in Microchip are currently trading down 7% year-to-date. However the stock boasts a bullish Strong Buy analyst consensus, with both Mizuho Securities and Rosenblatt reiterating their buy ratings on June 2. (See MCHP stock analysis on TipRanks.)Mizuho’s Vijay Rakesh also ramped up his MCHP price target from $92 to $105 (8% upside potential), citing improving auto-industrial and 5G base station trends after a challenging few months.“We continue to believe MCHP can leverage costs and achieve its target 63% GMs over time, and its broad customer base and product mix are competitive advantages as a potential 2H re-opening positions well from depressed levels” he wrote.Related News: AMD Can Keep the Rally Alive, Says Top Analyst Lyft Rises 5% After-Hours On Strong May Performance MongoDB Earnings Preview: Analysts Looking For Beat, Raise Quarter More recent articles from Smarter Analyst: * Glu Mobile Sinks On $100M Public Offering Announcement * Zoom Lifts Full-Year Sales Guidance As Quarterly Revenue Balloons 169% * Cheesecake Factory Spikes After-Hours As 75% Sales Recaptured * Lyft Rises 5% After-Hours On Strong May Performance

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(Bloomberg) — Tiffany & Co. plunged after Women’s Wear Daily reported LVMH’s deal to buy the luxury jewelry company is uncertain as the U.S. economy faces widespread upheaval.LVMH board members arranged to meet on Tuesday to discuss the proposed deal, WWD reported, citing unidentified individuals. Board members are concerned about the Covid-19 pandemic that has disrupted the U.S. economy and growing unrest over police violence, WWD said. They also expressed concern about Tiffany’s ability to cover its debt covenants at the end of the transaction.Tiffany’s representatives didn’t immediately respond to a request for comment from Bloomberg. LVMH declined to comment. The French company’s shares rose 0.8% in early Paris trading Wednesday.Tiffany shares, which were halted for several minutes due to volatility, fell as much as 13%, the steepest intraday drop since 2015, before closing down 8.9% on Tuesday.“I would imagine it is normal that LVMH internally discusses the proposed Tiffany acquisition — given the size of the deal, the Covid-19 situation, and the recent social unrest in the U.S.,” wrote Luca Solca, an analyst at Sanford C. Bernstein. “Having said that, the Tiffany takeover would provide a unique strategic opportunity to LVMH, boosting its position in branded jewelry.”Solca said it’s an “open question” whether LVMH would try to renegotiate better terms.The economic fallout from the pandemic has disrupted or derailed a number of prominent deals, including L Brands Inc.’s agreement to sell a majority stake in Victoria’s Secret to private-equity firm Sycamore Partners. If the LVMH-Tiffany tie-up falls apart, it would be one of the largest so far related to Covid-19.The New York-based jeweler website says, as of June 1, its stores are temporarily closed until further notice. The pandemic has also impacted the company’s ability to offer next-day and express shipping.The stores went dark in mid-March due to the pandemic shutdown. Some of its locations have had their windows boarded up as protests roil cities across the country.LVMH’s planned purchase of Tiffany for more than $16 billion has been the subject of speculation after the coronavirus pandemic suddenly altered the consumer landscape across the globe.For LVMH, the deal originally made a lot of sense: buying U.S.-based Tiffany would help the Louis Vuitton owner challenge Cartier owner Richemont for dominance in the global jewelry business. But as Americans curb discretionary spending and retail stores temporarily close their doors, growing exposure to the U.S. market doesn’t have quite the same appeal as it did when the tie-up was announced last November.Prior to the virus lockdown, the 183-year-old Tiffany was struggling with a lull in international tourist traffic and civil unrest in Hong Kong. In the U.S., management has worked to attract younger clientele, though sales have been slow to rebound. Chief Executive Officer Alessandro Bogliolo made China a priority, counting on the market as a growth engine.(Updates with LVMH shares in third paragraph, analyst comment in fifth)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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(Bloomberg) — Deutsche Lufthansa AG signaled the start of a company-wide revamp spanning job cuts to asset disposals to help repay its 9 billion-euro ($10 billion) bailout from the German government.Europe’s biggest airline will slash employee expenses and look at spinning off non-core units in an effort to reduce costs and bolster cash flow as the coronavirus crisis depresses revenue, it said in a statement Wednesday. The group had a 2.1 billion-euro net loss in the first quarter.“In view of the very slow recovery in demand, we must now take far-reaching restructuring measures to counteract this,” Chief Executive Officer Carsten Spohr said in the release.Lufthansa’s pledge to slash costs is likely to lead to a struggle with Germany’s powerful labor unions, which in the years prior to the pandemic thwarted efforts to trim expenses with pilot and cabin-crew strikes. The situation may be complicated by the state’s 20% holding in the airline as part of the pending rescue, which will involve government representatives in its affairs.The company set out more precise cuts for its foreign airline units, where labor protection laws are less stringent than in Germany. Austrian Airlines will see staff costs pared by 20%, with Brussels Airlines suffering a 25% reduction in the workforce and a 30% cut to its fleet.While Lufthansa has said its liquidity position is becoming “urgent,” the statement gave no details on cash levels. The deal will dilute the holdings of current investors, though they’re expected to back it in a June 25 vote rather than risk insolvency.Airlines worldwide are reeling as the Covid-19 pandemic brings decades of travel growth to a shuddering halt, with industry executives suggesting it may take several years for demand to return to previous levels, especially in the long-haul markets targeted by premium carriers such as Lufthansa.At the same time the German carrier, previously regarded as among the most stable and successful, is negotiating bailout that’s the biggest for the industry so far. Its predicament highlighs both the impact of the virus and Germany’s willingness to come to the aid of its leading businesses.Lufthansa posted a first-quarter loss of 1.22 billion euros, widening from 336 million euros a year earlier. The imposition of travel lockdowns from mid-February led to an 18% drop in sales, with fuel-hedging losses also hurting the numbers.The picture will be far worse in the current quarter, during which almost all of the carrier’s 760 planes have been grounded.Spohr said it’s impossible to provide full-year guidance, beyond saying the result will be significantly worse.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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