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3 Stocks (On The Move and Why).

BBY: Best Buy Q2 results: Sales down, EPS up, FY25 outlook improves

What's new: Best Buy reported Q2 FY25 results with comparable sales down 2.3%, but GAAP and non-GAAP diluted EPS up 7% and 10% respectively to $1.34. The company raised its FY25 non-GAAP diluted EPS guidance.

Why it matters: Despite a challenging retail environment, Best Buy is showing resilience with improved profitability and a more optimistic outlook for the full year.

The big picture: Best Buy is navigating a stabilizing but still uneven consumer landscape, balancing value-seeking customers with demand for high-end tech products.

By the numbers:

• Q2 Domestic revenue: $8.62 billion, down 3.0%

• Q2 International revenue: $665 million, down 4.0%

• FY25 revenue guidance: $41.3 billion to $41.9 billion

• FY25 comparable sales guidance: -3.0% to -1.5% (narrowed from previous -3.0% to 0.0%)

Between the lines: Strong performance in tablets and computing (6% comparable sales growth) helped offset declines in appliances, home theater, and gaming.

What they're saying: CEO Corie Barry emphasized the company's focus on "sharpening our customer experiences and industry positioning while expanding our non-GAAP operating income rate."

What's next: Best Buy expects Q3 FY25 comparable sales to decline by approximately 1.0% with a non-GAAP operating income rate of about 3.7%.

BBW: Build-A-Bear Q2: Revenue up 2.4%, EPS up 12.3%, FY2024 guidance reaffirmed

What's new: Build-A-Bear Workshop reported Q2 FY2024 results with revenue up 2.4% to $111.8 million and diluted EPS up 12.3% to $0.64. The company reaffirmed its fiscal 2024 guidance.

Why it matters: Despite challenges in e-commerce demand, Build-A-Bear demonstrated resilience with growth in total revenues and profitability, showcasing the strength of its transformed business model.

By the numbers:

• Q2 revenue: $111.8 million, up 2.4%

• Q2 pre-tax income: $11.5 million, up 10.2%

• Q2 diluted EPS: $0.64, up 12.3%

• E-commerce demand: Down 28.2%

• Commercial and franchise revenues: $8.3 million, up 44.8%

Between the lines: The company's omnichannel strategy and global expansion are offsetting e-commerce headwinds, with strong performance in commercial and franchise segments.

What they're saying: CEO Sharon Price John highlighted "increasing momentum for our experience locations" and improved web demand in early Q3, supporting confidence in the annual guidance.

What to watch:

• Net new unit growth: Targeting at least 50 new experience locations globally in FY2024

• Share repurchases: Over 5% of outstanding shares repurchased year-to-date

The bottom line: Build-A-Bear is maintaining its growth trajectory despite challenges, focusing on brand leverage and profitable expansion across multiple channels.

BIRK: Birkenstock Q3 FY2024: Revenue up 19%, confirms full-year guidance

What's new: Birkenstock reported record Q3 FY2024 revenue of €565 million, up 19% year-over-year, driven by strong consumer demand across all segments and channels.

Why it matters: The results demonstrate Birkenstock's resilience and growth potential as a newly public company, even as consumers become more selective in their spending.

By the numbers:

• Q3 revenue: €565 million, up 19%

• Net profit: €75 million, up 18%

• EPS: €0.40, up 15%

• Adjusted EBITDA: €186 million, up 15%

• B2B revenue growth: 23%

• DTC revenue growth: 14%

Between the lines: Birkenstock is expanding its product range and retail footprint, with closed-toe styles growing at twice the brand average and 7 new owned stores opened in Q3.

What they're saying: CEO Oliver Reichert emphasized the company's ability to meet consumer demand while maintaining a "disciplined engineered distribution approach."

What to watch:

• Production capacity expansion: Temporarily impacting margins but setting up for future growth

• Deleveraging: Company aims for 2x net leverage by end of calendar year

The bottom line: Birkenstock reaffirms FY2024 guidance of 20% revenue growth and 30-30.5% Adjusted EBITDA margin, signaling confidence in its growth trajectory.

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1 Actionable Tip.

When struggling to think clearly about a problem try this 👇

Push the situation or problem to its extreme limits - either the best or worst possible outcome - to gain clarity and insight.

Why it works:

1. Clarifies Core Issues: By exaggerating the problem to its extreme, the fundamental aspects become more apparent. It strips away the noise and distractions, forcing you to confront the core issues directly.

2. Highlights Consequences: Extreme scenarios highlight the potential consequences of different actions. This can help you understand the stakes involved and prioritize what matters most.

3. Tests Assumptions: When you push a situation to its extreme, you're forced to test the assumptions you're making. If those assumptions break down under extreme conditions, it can reveal flaws in your thinking.

4. Facilitates Creative Problem-Solving: Extreme-case thinking can also spark creative solutions. By considering how to avoid the worst-case scenario or achieve the best-case scenario, you might come up with ideas you wouldn’t have considered otherwise.

5. Builds Resilience: This method helps prepare for the worst, making you more resilient in real-life situations. If you’ve already considered how to handle the extremes, you're less likely to be caught off guard by unexpected challenges.

(This concept is called extreme-case scenario thinking or extremity analysis.)