Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether it’s a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the latest earnings stats from the S&P 500 👇
*Click the image to enlarge it
Despite reporting mixed earnings, the $10B packaged foods stock, Campbell's $CPB, had a +4.48 reaction score.
They posted revenues of $2.32B, versus the expected $2,33B, and earnings per share of $0.62, versus the expected $0.56.
The $21B discount store chain, Dollar Tree $DLTR, had a -3.95 reaction score after beating headline expectations.
Their report showed revenues of $4.57B, versus the expected $4.48B, and earnings per share of $0.77, versus the expected $0.42.
Now let's dive into the fundamentals and technicals 👇
CPB had its best earnings reaction since March 2020 🔥
Campbell's rallied 7.7% after this earnings report, and here's what happened:
Organic net sales declined by 3% due to shipment timing and poor performance from the snacking segment.
Tariffs are a significant headwind for this company right now, and the management team was unable to provide much insight in the report.
The real kicker was the guidance, which was bad but better than expected. It was a classic case of less bad news being good news.
This was a relatively poor earnings report, but the stock surged on the news. We think it was because all of the bad news is already priced in, and there's nobody left to sell.
Many of their business segments have been struggling for several quarters, and the market is anticipating a rebound in categories such as snacking.
Over the past few months, the price has carved out a textbook bearish-to-bullish reversal pattern. This earnings reaction marked the decisive resolution of that base, sparking a new short-term uptrend.
So long as CPB holds above 33.50, the path of least resistance is likely to remain higher for the foreseeable future.
DLTR suffered its 2nd consecutive negative earnings reaction 🐻
Dollar Tree fell 8.4% after this earnings report, and here's what happened:
Net sales rose 12.3% year-over-year, with comparable sales up 6.5%
With $1B in fresh capital from the sale of Family Dollar, the board approved a new $2.5B share repurchase.
In addition to the strong quarter, the management team raised its forward guidance.
This was a shockingly terrible earnings reaction from a company that reported what seemed to be good numbers. It was one of the best beat/beat/drops we've seen in a while.
Perhaps the stock has risen too quickly, and it's time to retrace its gains? Since the low set earlier this year, the price has doubled. That's a wild move for a name like this!
Wednesday's earnings reaction was a textbook bearish gap-n-go from a multi-month distribution pattern. We believe this resolution will lead to increased selling pressure in the short term.
Over longer timeframes, we still like this name. However, the market is telling us loud and clear that there are more sellers than buyers at the moment.
So long as DLTR remains below 108, the path of least resistance is likely to remain lower for the foreseeable future.
Thank you for reading
-The Beat Team
P.S. Jeff Macke has spent his entire career researching and investing in consumer-based companies. Literally. His dad was the CEO of Target, so he learned the retail ropes as a kid.
Now, for the first time, he's sharing his research and private portfolio.
