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Earnings: Booking Holdings, Etsy, and Papa John's rally on Q3 beats

Yahoo Finance's Emily McCormick and Brian Sozzi discuss the market moves for Booking Holdings, Etsy, and Papa John's.

Video Transcript

[MUSIC PLAYING]

EMILY MCCORMICK: Welcome back to Yahoo Finance Live. Let's get a check of some of the stocks making major moves this morning on the heels of earnings. And starting off with Booking Holdings, because we are seeing a nice stock pop this morning on the heels of those third quarter results here.

Brian, there had been quite a bit of concern over the past couple of months about how the Delta variant would be weighing on that business in the third quarter, but it does look like they fared pretty well, particularly in Europe. We saw rooms booked in the third quarter up 44% year on year. And revenue was also better than expected at $4.7 billion. And that was up 77% compared to the same quarter last year.

But we also got some encouraging news on the reopening from the results of Hilton and Marriott. And as you look at these results in aggregate, Brian, what are some of your big takeaways?

BRIAN SOZZI: Two hot takes for me on booking, Emily. One, the closely watched metric for booking is room nights. Now, room nights, essentially people booking nights on vacation via booking.com, pretty self-explanatory. But those were down 8% year over year. That was an improvement from the 22% decline they saw in the month of July and 26% drop they saw in the second quarter.

So it's good to see that trajectory improving sequentially, because we also saw that-- as you mentioned, we also saw that within Marriott's results, earnings results, we saw it in Hilton's earnings results. So another travel company suggesting things have started to improve. Are they back to 2019 levels? No, we're not saying that. But the trajectory is going in the right direction. A lot of hope and optimism now potentially on Airbnb's report when they report earnings very shortly too.

Number two, November 8, I believe, is the day when those European travel restrictions to the US lift. Booking talking a lot about the potential release of pent-up demand. They talked about this on the earnings call last night. The pent-up demand that may happen for Booking and other travel companies as those restrictions are lifted. They can't measure it, but it could be pretty big.

EMILY MCCORMICK: That's right, Brian. And you were mentioning those comparisons here for Booking to its quarterly results before the pandemic. And just to put that into context, again, revenue up 77% year on year to $5.7 billion, but still down from the $5 billion in the same quarter of 2019 before the pandemic.

But let's turn things over to Etsy. Now that, of course, has been a stock that's been seen in the stay-at-home trade. Of course, it is an e-commerce company. We saw those shares take a little bit of a hit back a couple of weeks ago when Amazon had reported disappointing quarterly earnings results and guidance.

But we're taking a look here at shares of Etsy now actually rallying in the premarket up more than 11%. And that's even as we saw some guidance here for the fourth quarter that came in a little bit light compared to Wall Street's expectations. So Brian, as we look at shares of Etsy here, what do you think is the focus that's really getting this stock moving higher?

BRIAN SOZZI: Yeah, we'll make this one really easy for those out there trading this. I'm surprised to see this reversal here.

Etsy said on their conference call last night that October was off to a strong start. And I think that has a lot of bulls on Etsy encouraged that they could start to cycle successfully some of the strong sales gains that they had last year really at the height of the pandemic.

I mean, they're up against some serious sales, triple digit sales comparisons for November and December as the world essentially shut down, went online, and just spent a lot of time ordering stuff from an Etsy. So I think that's what the bulls are hanging their hat on here.

EMILY MCCORMICK: Yeah, Brian, I think one other thing with Etsy as we continue to hear companies talking about supply chain issues and, of course, shortages across their supply chains, Etsy seems to not have run into those same types of issues, because, of course, the marketplace does specialize in these sort of secondhand and handmade products that are being sold by individual sellers. So it does seem like they averted some of those concerns, at least on that front on the supply side.

But then, finally, do want to turn to one other stock that is moving higher by more than 10% this morning, and that's Papa John's. Again, better than expected third quarter results here. US company owned comp sales up 7.4%. The estimate was for 4.2% growth. So a pretty strong quarter here from another restaurant company, Brian.

BRIAN SOZZI: And another company, Emily, like Bed Bath & Beyond we saw earlier in the week. Papa John's coming out here announcing a new stock buyback plan, $425 million for them. We saw-- we're seeing a positive market reaction I think in large part because of that new buyback. We also saw that, of course, with Bed Bath & Beyond earlier in the week.

Number two, Papa John's, just another good quarter in the US in large part because of stuffed crust pizza. Third quarter, pizza showdown. Papa John's US sales up 6.9%. Pizza Hut up 2%. Domino's Pizza, the odd ball out, same store sales in the US down 1.9%.

EMILY MCCORMICK: And just taking a look more broadly to internationally. Of course, Papa John's does get the majority of its revenue coming domestically. But internationally, those comparable sales up 8.3% in the third quarter.

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