CVS, Yum! Brands And Wayfair Report Earnings – Here’s How They Fared

Key takeaways

• CVS was up on revenue and earnings, but lowered its full-year guidance, sending the stock tumbling this week
• Yum! Brands saw strong sales for Taco Bell and KFC while Pizza Hut floundered
• Wayfair’s earnings loss narrower than expected, but missed revenue targets

Earnings season is in full swing still, with Wall Street watching with bated breath to see which companies are weathering the economic storm. Companies and consumers alike are dealing with a marathon-length cost of living crisis, so it’s no surprise we’re seeing some businesses miss their estimates.

That was the case at least once across the board for CVS, Yum! Brands and Wayfair, all with mixed results across earnings and revenue. All reflect the tricky environment businesses are having to operate in, and all three saw their share prices either stay flat or tumble down.

Here’s the latest on earnings season, how CVS, Yum! and Wayfair performed, as well as the stock price reactions from Wall Street.

CVS earnings

Healthcare company CVS performed well in the third quarter, reporting earnings per share of $2.21 based on revenue of $89.8 billion. Analyst expectations had arrived at $2.13 a share on revenue of $88.3 billion.

However, the company lowered its guidance for earnings per share under GAAP for the third time, having already lowered guidance in May and August. CVA now sees its full-year GAAP earnings at $6.37 to $6.61 a share.

“Despite a challenging business environment, we continue adapting to the changing needs of our consumers by connecting our care delivery capabilities in communities across the country, broadening access to care and lowering costs,” CVS CEO Karen S. Lynch said.

Despite beating analyst estimates, Wall Street clearly wasn’t impressed with the healthcare company lowering its guidance for the third time. CVS’ share price tumbled 3% in Wednesday trading. The shares have lost 26% so far this year.

Yum! Brands earnings

Yum! Brands, the food and drink conglomerate with top restaurant brands like Pizza Hut, Taco Bell and KFC, reported better-than-expected third-quarter earnings, arriving at $1.44 adjusted compared to the $1.28 expected from Wall Street.

But revenue missed the mark, reported at $1.71 billion for the third quarter versus the $1.77 billion predicted. The result is still a 4% increase in net sales, and according to CEO David Gibbs, the company saw record growth for digital sales.

Yum’s same-store sales increased by 6% for the quarter, with a strong performance in China for KFC compared to the U.S., which saw flat growth. Taco Bell saw 8% growth, as Yum went big on promotional deals and rebooting popular menu items.

Pizza Hut fell short at just 1% growth. The brand has suffered with fierce market competition, with Papa John’s and Papa Murphy’s taking market share. Growth estimates had been at 2.08% for the pizza chain.

Yum’s China CFO, Andy Yeung, warned on Tuesday that Chinese demand was still soft, with no let up in sight. “Consumers have become more value-conscious,” he added. The comments concerned investors despite relatively strong sales in Yum’s biggest market.

The stock performance in light of the report was a mixed bag. While Yum’s stock closed 1% higher in the U.S., Yum China’s share price plunged by more than 15%. The U.S. stock is down 4.8% so far in 2023.

Wayfair earnings

Want a hat trick? Online furniture company Wayfair’s share price also tumbled after releasing its earnings report, which reflected a challenging market for retailers amid spending pullbacks from consumers.

Wayfair reported a Q3 adjusted loss of 13 cents a share, which is better than the 48 cents a share loss Wall Street anticipated, but still – not great. Total net revenue reached $2.94 billion, slightly missing the $2.98 billion estimate predicted, but it’s still a 3.7% gain from the same time last year.

Active customers for the quarter also dropped by 1.3% to 22.3 million, with net revenue per active customer falling by 1.6% to $538. However, orders increased in the third quarter by 13.8%, and Wayfair claims the net revenue dropping is due to supply chain price cuts it’s passed onto customers.

Wayfair CEO Niraj Shah was positive about the future, noting the company’s adjusted EBITDA was positive on a trailing 12-month basis. “Even with a turbulent macro [environment], we remain committed to our profitability goals in good times and bad,” Shah commented in the report.

Wayfair’s share price tumbled by as much as 12% on Wednesday, though the share price has climbed through 2023 by over 46% so far.

The bottom line

Earnings season this time has proven tricky for most, with even the Big Tech titans suffering share price drops as they failed to live up to Wall Street’s lofty expectations. Only Yum! saw a marginal increase in its stock price, while CVS and Wayfair suffered even when revenue had surpassed expectations.

It shows that the cost of living crisis seen in the U.S. is a marathon, not a sprint – though businesses will undoubtedly be cheered to see the Fed hold interest rates steady for the second time in a row.