Although the second quarter earnings season has largely passed, several companies with abnormal fiscal years issued their latest earnings results after the market close yesterday. Although the companies are relatively small in the grand scheme of things, their results can also be considered as a reflection of the broader economic well-being of the U.S. economy.
In this article, we put the earnings results of five companies, Restoration Hardware Holdings Inc (NYSE:RH), Finisar Corporation (NASDAQ:FNSR), Duluth Holdings Inc (NASDAQ:DLTH), Korn/Ferry International (NYSE:KFY), and Zumiez Inc. (NASDAQ:ZUMZ) under the microscope, and see how the world’s most successful investors had the five positioned in their portfolios at the end of the second quarter.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
Restoration Hardware Holdings Inc (NYSE:RH) shares are 10% in the green this morning after the retailer reported stronger-than-expected earnings for its fiscal second quarter. For the period, Restoration Hardware earned $0.44 per share on revenue of $543.4 million, beating the average estimates by $0.15 per share and $32 million respectively. Although a big part of the beats was due to the company being able to ship products earlier than anticipated (and thus the resulting pull forward of revenue and earnings into the second quarter from the third quarter), traders nevertheless took heart at its management’s reaffirmation of fiscal 2016 net revenue growth and adjusted diluted EPS of 1%-to-3% and $0.90-to-$1.00, respectively. 24 funds in our system owned shares of Restoration Hardware Holdings Inc (NYSE:RH) at the end of the second quarter, down by 14 funds from the end of the previous quarter.
Finisar Corporation (NASDAQ:FNSR) shares have surged by 16.87% on the back of a strong first quarter of fiscal year 2017 earnings report. For the three months, the company’s EPS of $0.38 beat estimates by $0.08, while Finisar’s revenue of $341.25 million was $8.5 million ahead of estimates. Sales rose by 8.7% year-over-year due to strong demand for 100Gb/s transceivers, among other factors. Finisar’s management sees fiscal second quarter EPS of between $0.44 and $0.50 on revenue of between $355 million and $375 million. Ken Fisher‘s Fisher Asset Management reported owning a stake of over 4.1 million shares in Finisar Corporation (NASDAQ:FNSR) as of the end of June.
On the next page, we’ll take a closer look at the earnings issued by Duluth Holdings, Korn/Ferry International, and Zumiez Inc yesterday.