The stock market closed lower on Wednesday driven by struggling technology stocks. Stocks struggled to sustain its rally early in the year due to uncertainty on interest rate cuts, coupled with the increasing tension in the Middle East.
Overall, S&P 500 was down 0.6% to 5,022, while NASDAQ dropped 1.2% to 15,683.
Tweet of the Day
WSJ:
Broadcom’s custom-chip division had a surge in business after Google rapidly increased production of TPUs recently, Chief Executive Hock Tan said during a March internal presentation. The increase, he said, was partly in response to Microsoft incorporating AI…
— AkhenOsiris (@akhenosiris) April 9, 2024
Chart of the Day
Here is the ten-year chart of Five Below (FIVE) as of March 26, 2024, when the stock was at $178.
Five Below’s profit estimates continue to shrink due to theft. In the past four quarters, 2024 profit estimates have shrunk from $6.78 to $6.10. Now, analysts expect just 13% profit growth this year for a company that used to be a 20% to 25% grower.
Five Below tested many shrink mitigation initiatives in the past two quarters. The most significant change made was to limit the number of self-checkout registers while positioning an associate upfront. Management expects to have 75% of transactions chain-wide assisted by an associate with a goal of 100% in its higher-risk stores to be fully transacted by an associate. Stock-wise, FIVE has been stuck in neutral for a year and David Sharek, Founder of School of Hard Stocks, expects that to continue.
FIVE is part of the Growth Portfolio.
