Crocs raised its outlook for the third time this year. Sprouts reported falling comparable sales and guided to steeper declines. Chipotle and Carvana extended their post-earnings gains in regular trading.
On a morning when large technology stocks fell, consumer stocks moved by double digits in both directions. The moves lined up with volume: stocks rose where companies showed more customers or units, and fell where comparable sales shrank.
Crocs: the third raise
Crocs reported third-quarter revenue of $1.04 billion, up 4.6%, and adjusted earnings of $3.69 a share, against $2.92 a year earlier and an estimate of about $3.30. It raised its full-year adjusted earnings forecast to $14.45 to $14.65 a share, from $13.70 to $14.00, its third increase this year, and now expects revenue growth of about 3%, up from 1% to 2%. It bought back about 2 million shares for $250 million.
The growth was uneven. International sales of the Crocs brand rose 11.8% and North America fell 2.1%. HEYDUDE revenue grew 6%. GAAP earnings of $4.52 a share included a $64 million benefit from tariff refunds.
"We see weakness at the low-end consumer, and we see strength at the high-end consumer," Andrew Rees, the chief executive, said, according to Reuters.
The shares rose about 26% to about $150.60 in early afternoon, from $119.69.
Sprouts: comparable sales turn negative
Sprouts Farmers Market, which reported after Wednesday's close, fell about 22% to about $48.40, from $62.00. Comparable-store sales fell 0.9% in the third quarter, and the grocer guided to a decline of 2% to 4% in the fourth quarter. Net sales rose about 5% to about $2.3 billion; with existing stores shrinking, that growth came from new locations. The gross margin narrowed to 38.2% from 38.7%, and earnings per share were $1.21 against $1.22 a year earlier.
For a grocer whose stock has been priced for growth, a forecast of shrinking sales at existing stores is a direct challenge.
The overnight names held
Two of Wednesday night's reporters added to their gains in regular trading. Chipotle, whose comparable sales rose 2.1% with transactions up 0.8%, rose about 8.7% to about $31.20, after being indicated up about 7% before the open. Carvana, which sold 39% more cars, rose about 16% to about $68.60, well above its overnight indication of about 9%.
What links them
Chipotle's transactions rose. Carvana's units rose. Crocs grew sales outside its home market fast enough to raise guidance a third time. Sprouts' comparable sales fell and are guided lower. In each case the stock moved with the direction of volume, not with the earnings-per-share line. Chipotle and Carvana both missed on earnings per share and rose anyway.
Rees's comment about a split between lower- and higher-income shoppers is one company's view. Thursday's moves were consistent with a focus on volume, though each stock had its own news.
Selective or fragile?
The selective view: consumers are still spending on brands and formats that are winning share, and investors are rewarding companies that show it.
The fragile view: Crocs' North American sales fell, Sprouts' comparable sales turned negative, Crocs' own chief executive sees weakness at the low end, and September data showed real consumer spending flat.
What to watch
Sprouts' primary filing and call detail on traffic versus basket size, holiday-quarter guidance from other retailers, Chipotle's transaction trend, Carvana's fourth-quarter unit growth, and October retail sales.