Retail earnings overshadowed by supply chain challenges, XPeng jumps on revenue beat
Yahoo Finance's Ines Ferre breaks down what's moving markets on Tuesday as Urban Outfitters and Abercrombie & Fitch stocks move lower despite reporting earnings beats, XPeng reports a rosy outlook for electric vehicles, and Samsung chooses Taylor, Texas, for its chip factory location.
Video Transcript
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AKIKO FUJITA: Welcome back to "Yahoo Finance Live." Two big retailers seeing significant pressure in the session today as their latest earnings results failed to impress investors. Let's bring in Yahoo Finance's Ines Ferre, who's tracking the action for us. And, of course, we're talking about Urban Outfitters, as well as Abercrombie. American Eagle Outfitters, though, at least seeing a pop in the session.
INES FERRE: Yeah, that's right. Well, some of the common themes that we're seeing among these clothing retailers, Akiko, is basically that they're beating on the top and the bottom line, but they are seeing these supply chain issues which so many industries are seeing. So if we take a look right now at Urban Outfitters, that stock is down 11% reporting record revenue and earnings.
But this is really overshadowed by low inventory, supply chain issues, with management last night on the earnings call saying that low inventory affected store sales, and a myriad of supply chain problems held back both the top and the bottom line results. Taking a look at A&F, Abercrombie and Fitch, that stock is down, its biggest decline today since March of 2020, down 15% despite, again, a beat on the top and the bottom line. But those supply chain issues and production and delivery delays affected its results.
Its gross margin decreased slightly year over year, slightly, but, still, that kind of highlights that delicate balance that companies have with price adjustments amid high inflation, high freight costs, and low inventory. And then taking a look at Xpeng, we're watching this stock up more than 7%. The Chinese electric vehicle maker sold more cars than expected in the third quarter, but really navigating supply chain problems.
Despite those chip shortages that the auto industry is facing, the Chinese electric vehicle makers have done relatively well. Gross margin increased quarter over quarter, better than what the streak had been expecting, and the company just released a fourth model, an SUV, that will be competing with Tesla's Model Y, Akiko.
AKIKO FUJITA: And Ines, in the chip space, a lot of investors looking to a big announcement in Texas this afternoon from one of the world's largest chip makers. What more do we know about what Samsung is about to announce?
INES FERRE: Yeah, that's right. Well, the "Wall Street Journal" is reporting that the company is expected to announce that it will be building a chip plant in Taylor, Texas. Now, Taylor, Texas, is about 30 minutes from Austin, Texas. And presumably, the company is also receiving some tax credits for putting a plant there.
But this is also-- this sort of dovetails with President Biden's-- the Biden administration's sort of push for semi chips, semiconductors to be-- chips to be produced more in the US because the US has sort of fallen behind in chip production over the years. And so now, with this chip shortage that we're seeing, we're seeing more companies that are putting more plants here in the US.
Intel is going-- is also increasing chip production in the US, as well. And Texas, of course, is a very hot state. Companies just pouring into the Texas area, really receiving some great breaks to be operating in Texas.
