The month of June offered a number of insightful comments from CFOs on their companies’ respective earnings calls. Here are four that stood out, from the CFOs of Kroger, Dollar Tree, Lululemon and Aurora Cannabis.
1. Kroger, supermarket operator
- Market cap: $36.4B
- Call date: 6/20/24
Interim CFO Todd Foley — who took on the role right before the failed merger attempt with Albertson’s — made it clear that he is just looking to keep the ship moving forward while not giving up on the merger as the company searches for their full-time finance chief.
“We talked at the beginning of the year that our expectation was to have relatively flat year-over-year gross margin, and that is still the expectation. As mentioned in my comments, we do expect results for the balance of the year to improve beyond our Q1 results, and that's really reflective of some of the gross margin expansion efforts that we have going on.”
“Our margins in our brands continue to do very well and as that business continues to grow, particularly in today's environment, we talked about the budget-conscious consumer, and that continues to connect with them. And so, the growth in that business helps drive the margins and we expect to see that as the year goes on.”
2. Dollar Tree, international retailer of discount variety stores
- Market cap: $23B
- Call date: 6/5/24
Dollar Tree, a company that operates over 8,000 locations across the United States, had its CFO Jeff Davis answer a question regarding profit concentration and the cost of breaking leases in some of their locations.
After the company announced store closures earlier this year and commercial real estate problems continue to pressure the economy overall, their CFO says their company is continuing to operate at average renewal rates for their locations right now.
“Some of this, of course, we aren't in a position to share. But I can tell you that as you look at the remaining portfolio of stores, you still have a sort of a distribution of profitability across those stores at a much higher level than what you would have had when we — before we closed the non-performing stores.”
“Our leases that we enter into are normally somewhere between five years to 10 years on average. At any one point in time, approximately 10% to 12% of those leases are being renewed on an annual basis. And that's about what I can really share with you at this point with respect to the lease obligations.”
3. Lululemon, athletic clothing retailer
- Market cap: $37.44B
- Call date: 6/5/2024
The “athleisure” retailer that once dominated the market has seen its share price tank so far in 2024. In their first earnings call since the departure of Sun Choe, their chief product officer, CFO Meghan Frank made it evident that the company, despite surpassing their expectations according to their finance chief, continues to see challenges ahead.
“Our Q1 results exceeded our expectations, driven by above-plan performance across the key areas of our P&L. Our business remains strong in our international regions and Canada, and in the U.S., we've seen a slower start to the year in line with our expectations…In addition, we continue to plan for multiple scenarios and manage our business to protect against downside.”
4. Aurora Cannabis, marijuana producer
- Market cap: $380M (CAD)
- Call date: 6/20/24
In her first earnings call with the company, Simona King — who joined as finance chief of the Canada-based cannabis producer earlier this year — called 2024 its “strongest-ever fiscal year.”
“As we look toward the new fiscal year, we intend to build on our prior accomplishments by further strengthening our business through sound execution of our medical cannabis strategy and delivering sustainable improvements to our financial performance…our team's strategic focus, combined with our operational excellence, have strengthened our financial condition over this past year.”
“As we look ahead, we are pleased with our leadership positioning in the high-margin global medical cannabis segment, which we believe will enable us to generate dependable revenue and EBITDA growth over the long term while, in the near term, actualize our goal of positive free cash flow.”