TOP STORY
🚗 Tesla Releases Earnings Report, Stock Falls 15%

This week, Tesla’s stock fell a whopping 15% after its Q3 2023 earnings report fell short of Wall Street's expectations on both earnings and revenue for the first time since July 2019.

• ❌ Revenue: $23.35 billion (vs. $24.1 billion expected)

• ❌ Earnings: $0.66 per share (vs. $0.73 expected)

Tesla also saw its total operating margin dip significantly from 17.2% in Q3 2022 to only 7.6% this quarter.

@millennial_falcon, who holds 11% of his portfolio in Tesla, said it was the ‘worst earnings call he’s ever heard’. Join the discussion on his Blossom post.

Here are some key takeaways from the Tesla Q3 earnings:

• 🌎 Macro Concerns: Tesla CEO, Elon Musk, expressed concerns about the global economy several times during the earnings call. Musk acknowledged that high interest rates could deter potential buyers due to higher monthly payments.

   

• 🇲🇽 Mexico Factory: Tesla is slowing down the pace of its Gigafactory in Mexico amidst economic concerns. The original plan was to build it rapidly and beat the construction timeline of Gigafactory in Shanghai. The Mexican facility was designated as Tesla's “next-generation vehicle” production, but these plans have now taken the back-burner with the Texas Gigafactory taking priority.
   

• ⚡️ Cybertruck: Musk projected a timeline of 12 to 18 months for the Cybertruck to reach positive cash flow, with an ambitious target to ramp up production to 250,000 units annually by 2025. He also cautioned about "enormous challenges" ahead as Tesla plans to scale up Cybertruck's volume production.

SPONSORED BY HAMILTON ETFS
💰 Why Marc Beavis is Buying $HBND, Canada’s 1st Fixed Income Covered Call ETF

A month ago, we shared the recent launch of Canada’s first fixed income covered call ETF from Hamilton ETFs. The Hamilton U.S. Bond Yield Maximizer ETF, the latest addition to the Hamilton Yield Maximizer suite of ETFs, provides a 10%+ target yield by investing in a portfolio of U.S. treasury bond ETFs while using an active covered call strategy.

Last week, Marc Beavis had the chance to speak with Nick Piquard, Chief Options Strategist and Lead Portfolio Manager for $HBND, to ask some questions about their latest product, watch it here:

📺 Marc Beavis: “Why I’m Buying HBND | Canada’s First Covered Call Bond ETF (Hamilton ETFs)”

Since the launch, $HBND has raised over $25 million, piquing the interest of income investors looking to maximize their monthly income above what is typically offered by bonds, without taking on additional credit risk.

A few highlights:

• Tax Efficiency: Unlike bond income, covered call premiums are taxed as capital gains (not foreign income), which are treated more favourably from a tax perspective

• Low Credit Risk: 100% invested in U.S. treasuries with a focus on long-term durations

• Reduced Volatility: Covered call strategies help reduce volatility

• CAD-Hedged: Hedged against the Canadian dollar so investors don’t have to worry about exchange rates

💡 Learn more about $HBND here

ENTERTAINMENT
📈 Netflix Crushes Earnings, Announces Share Buybacks and Price Hikes

This week, Netflix stock rose 12.51% after releasing its Q3 earnings, reporting a surge in subscriber growth, largely attributed to its crackdown on password-sharing and the introduction of an ad-supported tier.

• ✅ Revenue: $8.54 billion (vs. $8.54 billion expected)

• ✅ Earnings: $3.73 per share (vs. $3.49 expected)

The company announced 8.76 million new global subscribers in Q3, significantly outperforming the Wall Street estimate of 5.49 million.

Join the discussion about Netflix’s earnings on @marketwatcher’s Blossom post!

Here are some key takeaways from the Netflix’s Q3 earnings:

• 🤑 Price Hikes: Netflix announced a price increase for its basic and premium plans in the U.S. to offset higher production costs and improve profitability.
   

• 🤔 Forward Outlook: Netflix updated its full-year 2023 operating margin guidance to 20% and expects a free cash flow of approximately $6.5B, an increase from the previous forecast of at least $5B.
   

• 🫰 Operating Margins: Despite some concerns regarding the impact of the U.S. dollar's strength on revenue, Netflix is optimistic about maintaining an operating margin of around 20% for the full year 2023, and projects an increase to 22-23% for 2024.
   

• 💸 Share Buybacks: A significant highlight was the authorization of an additional $10B for share buybacks, with $2.5B shares already repurchased in Q3.

CONSUMER
🧘‍♀️ Lululemon Joins S&P 500, Replaces Activision Blizzard

On Monday, Lululemon Athletica ($LULU) jumped over 10% as they officially joined the S&P 500 index, replacing game maker Activision Blizzard following its recent merger with Microsoft. Lulu has fallen 5% since Monday, giving up some of these gains.

Despite facing multiple controversies in the mid-2010s, including a significant product recall, and several CEO resignations, the athleisure brand is up over 190% in the past 5 years, significantly outperforming the S&P 500 index, which is up ~59% in the same time-frame.

Join the discussion about Lulu on @vamsikbolla’s Blossom post!

Here’s a timeline of the company’s history 👇

• 1998: Founded by Chip Wilson in Vancouver, Canada.
   

• 2000: The first standalone store opened on West 4th Avenue in Vancouver.
   

• 2005: Lululemon began its international expansion by opening a store in Tokyo, Japan.
   

• 2007: Lululemon goes public and was listed on the Toronto Stock Exchange (TSX) and the NASDAQ.
   

• 2013:

  • Lululemon recalls 17% of its black yoga pants, costing about $60 million in lost sales.

  • CEO Christine Day resigns.

  • Founder Chip Wilson makes controversial comments about women's bodies and the fit of Lululemon pants, later stepping down from the board.
     

• 2014:

  • Lululemon shares drop by more than 30% following controversies.

  • The company expands into menswear.

   

• 2018:

  • CEO Laurent Potdevin resigns due to “behavior that fell short of the athletic apparel maker's standards of conduct”.

  • Calvin McDonald becomes the new CEO, propelling the company's growth and diversification.
     

• 2019: Lululemon unveils “Power of Three” plan, a 5-year growth plan aimed at doubling men’s and digital revenue, and quadrupling international revenue.
   

• 2020:

  • Digital sales peak with a 101% year-over-year jump in the fiscal year.

  • Lululemon acquires fitness startup Mirror for $500 million.
     

• 2022: Lululemon launches its "Play" categories, expanding into apparel for golf, tennis, and hiking.
   

• 2023:

  • Lululemon releases its "Power of Three ×2" growth plan, aimed at doubling men’s and digital revenue, and quadrupling international revenue, again.

  • Lululemon officially joins the S&P 500 index, replacing Activision Blizzard.

 FROM THE BLOSSOM COMMUNITY

🎙 Top Discussions This Week

🗞️ What else you might’ve missed:

• American Express ($AXP) fell despite reporting an earnings and revenue beat.

• Desjardins ($DCP) cut almost 400 jobs, citing slowdown and volatility.

• American Airlines ($AAL) lowered its full-year forecast citing rising fuel costs and demand trends.

• AT&T ($T) was up over 7% after a third-quarter earnings beat.

• Bank of Nova Scotia ($BNS) is cutting 3% of its workforce, or around 2,700 jobs.

• Birkenstock ($BIRK) has had one of the worst IPOs in recent history.