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3 Stocks (On The Move and Why).

DG: Dollar General Q2: Sales up 4.2%, EPS down 20.2%, FY2024 guidance lowered

What's new: Dollar General reported Q2 FY2024 results with net sales up 4.2% to $10.2 billion, but diluted EPS down 20.2% to $1.70. The company has updated its financial guidance for fiscal year 2024, lowering expectations for sales growth and EPS.

Why it matters: Despite positive sales growth and customer traffic, Dollar General is facing challenges with profitability and core customer spending, prompting strategic actions to enhance value and in-store experience.

By the numbers:

• Q2 net sales: $10.2 billion, up 4.2%

• Same-store sales: Up 0.5%

• Operating profit: $550.0 million, down 20.6%

• Diluted EPS: $1.70, down 20.2%

• Inventory: Down 11.0% on a per-store basis

Between the lines: Dollar General is seeing growth in consumables but declines in seasonal, home, and apparel categories. Gross profit margin decreased due to increased markdowns, inventory damages, and shrink.

What they're saying: CEO Todd Vasos acknowledged the company is "not satisfied" with the financial results and is "taking decisive action" to enhance offerings and in-store experience.

What to watch:

• Updated FY2024 guidance: Net sales growth 4.7% to 5.3% (down from 6.0% to 6.7%)

• New EPS guidance: $5.50 to $6.20 (down from $6.80 to $7.55)

• Planned 2,435 real estate projects, including 730 new store openings

The bottom line: Dollar General is facing headwinds from a constrained core customer base and operational challenges, leading to a more cautious outlook for the remainder of the fiscal year.

PDD: Q2 Revenue surges 86%, profit up 144%, warns of future challenges

What's new: PDD Holdings reported strong Q2 2024 results with total revenues up 86% to RMB97.1 billion ($13.4 billion) and net income up 144% to RMB32 billion ($4.4 billion). However, the company warns of upcoming challenges and potential decline in profitability.

Why it matters: Despite impressive growth, PDD Holdings is signaling a strategic shift towards "high-quality development" and a sustainable ecosystem, which may impact short-term financial performance.

By the numbers:

• Total revenue: RMB97.1 billion ($13.4 billion), up 86%

• Operating profit: RMB32.6 billion ($4.5 billion), up 156%

• Net income: RMB32 billion ($4.4 billion), up 144%

• Diluted earnings per ADS: RMB21.61 ($2.97), up from RMB9.00 in Q2 2023

• Cash and equivalents: RMB284.9 billion ($39.2 billion)

Between the lines: Revenue growth is slowing quarter-over-quarter, and the company expects further pressure due to intensified competition and external challenges.

What they're saying:

• Chairman Lei Chen: "We are prepared to accept short-term sacrifices and potential decline in profitability."

• Co-CEO Jiazhen Zhao: "We will vigorously support high-quality merchants while firmly tackling low-quality ones."

What to watch:

• Investments in platform trust and safety

• Support for high-quality merchants

• Potential impact on profitability due to strategic investments

The bottom line: PDD Holdings is pivoting towards long-term sustainability at the expense of short-term gains, signaling a significant strategic shift for the e-commerce giant.

NVDA: NVIDIA Q2 FY2025: Revenue soars 122% to $30B, Data Center revenue up 154%

What's new: NVIDIA reported record Q2 FY2025 results with total revenue of $30 billion, up 122% year-over-year, driven by strong demand for AI and accelerated computing solutions.

Why it matters: NVIDIA's stellar performance underscores the explosive growth in AI and data center markets, with the company positioning itself as a full-stack, data center-scale platform provider.

By the numbers:

• Total revenue: $30.0 billion, up 122% YoY

• Data Center revenue: $26.3 billion, up 154% YoY

• GAAP EPS: $0.67, up 168% YoY

• Non-GAAP EPS: $0.68, up 152% YoY

• Q3 revenue outlook: $32.5 billion (±2%)

Between the lines: Strong demand for Hopper architecture and high anticipation for Blackwell are driving growth. New product categories like Spectrum-X Ethernet and NVIDIA AI Enterprise software are gaining significant traction.

What they're saying: CEO Jensen Huang emphasizes the company's role in modernizing computing stacks for generative AI across various sectors.

What to watch:

• Blackwell architecture rollout

• Enterprise adoption of generative AI solutions

• Expansion of share repurchase program by $50 billion

The bottom line: NVIDIA continues to capitalize on the AI boom, with expectations of continued strong growth in the coming quarter.

2 Portfolio Builders.

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1 Actionable Tip.