Snowflake, Franklin Templeton, Target and JD Sports

Snowflake (SNOW)

Snowflake posted better-than-expected second quarter (Q2) results, surpassing revenue estimates, but that wasn’t enough to convince investors as its shares dropped in pre-market trading.

The data cloud company reported second quarter revenue of $868.82m (£661.98m), a 30% jump from a year-ago, and above analysts’ estimates.

However, the net loss of $317.77mn or 95 cents per share widened from the year prior and represented a more significant loss than Wall Street projected.

For the current quarter ending in October, Snowflake said it expects product revenue in a range of $850m to $855m. Analysts had expected $851m.

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“Snowflake delivered another strong quarter, surpassing the high end of our Q2 product revenue guidance,” Sridhar Ramaswamy, CEO of Snowflake, said in the release.

Snowflake sells data analytics and management tools that run on cloud-computing platforms such as Amazon Web Services.

Franklin Templeton (BEN)

Shares in the asset manager were making a shy comeback during pre-market hours after plunging over 12% in the last session amid reports that the US regulator had launched a probe into one of its units.

Western Asset Management, a division of Franklin Templeton, has replaced its top investment executive Ken Leech and announced the closure of a $2bn fund as the firm grapples with federal investigations into his conduct.

The fixed income manager said that Michael Buchanan has been appointed as chief investment officer, effective immediately, replacing Leech. Leech has taken a leave of absence after being informed by the US Securities and Exchange Commission (SEC) that he is likely to face civil charges, according to the company’s statement.

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In the wake of Leech’s departure, Western Asset Management will also shut down its $2bn Macro Opportunities strategy fund. The firm is currently cooperating with “parallel government investigations” after launching an internal probe into past trade allocations involving Treasury derivatives in some of its accounts.

The developments weighed heavily on Franklin Templeton’s stock, which closed down over 12% at $19.78 on Wednesday, marking the steepest single-day decline in nearly four years.

Target (TGT)

Shares in Target were lower in pre-market trading, correcting after an 11% increase on Wednesday after the retailer announced a 3% increase in sales for its fiscal second quarter, marking a return to growth after a period of sluggish performance and squeezed profit margins.

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The retailer surpassed Wall Street’s expectations for both earnings and revenue, driven by an uptick in shopper visits to its stores and website, with discretionary items like clothing seeing strong demand.

The company slashed prices on 5,000 frequently bought items at stores to draw customers.

“Consumers are showing resiliency as they continue to search for value and focus on essentials, while selectively spending on discretionary items,” Joseph Feldman, an analyst at Telsey Advisory Group, said in a recent note to clients.

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Despite the positive results, Target maintained a cautious outlook, reaffirming its previous full-year sales forecast. The company expects comparable sales for the year to range from flat to up 2%, but signalled that growth is more likely to fall in the lower half of that range.

However, Target raised its profit guidance, projecting adjusted earnings per share to be between $9 and $9.70, an increase from the previous range of $8.60 to $9.60.

JD Sports (JD.L)

JD Sports Fashion reported a return to like-for-like sales growth in its second quarter, driven by its aggressive store expansion in North America and Europe, even as the UK market remained under pressure.

The sports apparel and footwear retailer posted a 2.4% increase in like-for-like sales for the three months ending 3 August, recovering from a 0.7% decline in the first quarter as comparisons with the previous year eased. Growth was particularly robust in North America, where sales rose 5.7%, and in Europe, with a 3% increase. In contrast, UK like-for-like sales fell by 0.8%, although this was a significant improvement from the 6.4% drop in the previous quarter.

JD Sports also bolstered its North American presence by completing the acquisition of Alabama-based sports fashion retailer Hibbett during the second quarter, expanding its footprint to 1,169 stores across 36 states. The company opened 85 new JD stores during the period, further fuelling its international growth strategy.

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“We look forward to Hibbett’s contribution to the growth and development of our US business in the coming years,” said CEO Régis Schultz in Thursday’s trading update.

Looking ahead, JD Sports reaffirmed its profit guidance, forecasting pre-tax profit and adjusting items in the range of £955m to £1.035bn, excluding any impact from Hibbett. However, the company remains cautious about the outlook due to ongoing global macroeconomic volatility.

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