Urban Outfitters (URBN/NYSE): Earning per share missed at $0.64 (versus a predicted $0.67) and, it posted revenues of $1.18 billion (versus an estimate of $1.16 billion).

While these are five very different retailers, we see that, broadly speaking, the retail trends signaled last week hold true. Inventory pressures are forcing markdowns, and inflationary costs are compressing margins. That said, people do have jobs and are buying products. The consumer sky is not falling.

GM investment pays dividends, literally

General Motors (GM/NYSE) made the headlines this week when it reinstated its quarterly dividend, as well as announcing a USD$5 billion stock buyback. (Figures below are in U.S. dollars.) GM shareholders will get $0.09 per share each quarter going forward. 

While this isn’t even close to replacing the $0.38 per share GM shelled out before it suspended its dividends in 2020, it is a pleasant vote of confidence in the company’s ability to create free cash flow going forward. The dividend yield for the stock now stands at 1%. GM stock price was up about 4% on the news, but is still down about 33% this year.

GM CEO Mary Barra adjusted expectations by stating that while GM would “consider all opportunities to return excess capital to shareholders,” the bulk of the company’s capital would be reinvested into the electrical vehicle focus GM will have going forward. GM, along with all other traditional carmakers, is still the race against Tesla for scale. Tesla needs to manage manufacturing capacity and distribution models. GM needs to figure out its battery and performance technology. 

I’m not sure who will win this car race, but I do know that Tesla’s stock remains priced for absolute perfect execution, while the market has not extended nearly the same benefit of the doubt to GM, Ford, and others. Tesla is no doubt hoping that their 3-for-1 stock split this week will result in the usual boost to overall market capitalization.

Nvidia’s not playing games

While many of the big American tech names are quite well known to Canadian investors, I find Nvidia (NVDA/NASDAQ) often flies under the radar. While the company is substantially smaller than Apple or Amazon, it’s still more than three times bigger than RBC (Canada’s largest company).

Nvidia announced its earnings this week, and while expectations had already been lowered, the hardware giant still missed on projected revenues and earnings. Earnings per share came in at only $0.51 (versus $1.26 predicted) and revenues were USD$6.7 billion (versus USD$8.10 billion predicted).

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