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Today in the Market (3/2/2023)

Good Evening! The Dow led markets higher on Thursday as Salesforce (CRM) earnings boosted the index, while the S&P 500 and Nasdaq recovered from early losses to close in the green.

The S&P 500 finished up 0.76%, the Nasdaq Composite rose by 0.73%, and the Dow Jones lead the way by 1.05%.

IS IT TIME FOR AN INCREASE?

Costco (COST) reported fiscal second-quarter financial results after the market close that were mostly above analyst estimates. After the announcement, shares fell by more than 2%.

  • Revenue: $55.27 Billion vs. $55.58 Billion Expected
  • Same Store Sales: 6.8% vs. 6.16% Expected
  • Earnings Per Share: $3.30 vs. $3.21 Expected

What else? There was no indication of an increase in membership in the report (Fun Fact: Every five years and seven months, Costco increases its membership fees, bringing the next possible increase to this month). Membership fees brought in $1.03 billion, up 6.2% from a year earlier and above Wall Street’s projections of $1.02 billion.

BEER AND INFLATON?

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After Bud Lite and other breweries increased their pricing, fewer people are drinking beer. In the most recent quarterly report from AB InBev (BUD), the total volume of beer sales declined by 0.9%. Meanwhile, overall revenue increased by 10.2% to $14.67 billion, with price increases being a major contributor.

So how much was the price increase? Well… According to NielsenIQ statistics provided by Bump Williams Consulting, the average price of a 24-pack of 12-ounce beer increased by almost 8% last quarter. The brands of AB InBev had some of the greatest price rises. In its portfolio, Bud Light’s price increased 8.9% annually in Q4, followed by Budweiser, up 8.7%, Stella Artois, up 8.2%, and Michelob UItra, up 6.9%.

At least the investor wins right? CEO Michel Doukeris of AB InBev said a price increase was necessary since the firm was “lagging behind inflation throughout most of the year, but catching up at the end of the year.” He encouraged investors to “think about the positive carry-over that this price will have in 2023.”

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