Good morning investors!

Every weekend we publish our “Earnings Recap” — an in-depth summary of the earnings reports for stocks that we cover.

Earnings season is winding down but three of the stocks we cover reported quarterly results this week — here is the list of companies we focused on:

• Nvidia, Salesforce, CrowdStrike, Lululemon, Dollar General, and Ulta Beauty

Let’s dive in.

Nvidia (NVDA)

Nvidia reported strong earnings that surpassed Wall Street expectations and provided upbeat guidance for the current quarter. 

Revenue surged 122% year-over-year to $30.04 billion, driven by its data center business. Net income more than doubled to $16.6 billion, or 67 cents per share, in the quarter, from $6.18 billion, or 25 cents per share, in the year-ago period.

Nvidia’s data center business, which includes its AI processors, saw revenue grow by 154% to $26.3 billion, making up 88% of total sales and exceeding analyst forecasts. 

Gaming revenue rose 16% to $2.9 billion, beating estimates, while the professional visualization business increased 20%. Nvidia’s automotive and robotics segment reported $346 million in revenue.

Nvidia said its gross margin slipped in the quarter to 75.1% from 78.4% in the prior period, though it is still up from 70.1% a year ago.

Nvidia expects about $32.5 billion in revenue next quarter, up 80% year-over-year, with full-year gross margins in the mid-70% range compared with expectations of 76.4%. The company also bolstered its buyback program with a plan to repurchase $50 billion in shares.

NVDA shares are -8.6% so far this week.

Salesforce (CRM)

Salesforce shares rose after reporting strong fiscal second-quarter results that beat estimates and raising its full-year profit outlook.

The company’s revenue grew 8% year-over-year to $9.33 billion, with net income increasing to $1.43 billion, or $1.47 per share, from $1.27 billion, or $1.28 per share, a year ago.

Salesforce’s adjusted operating margin of 33.7% exceeded analyst expectations. Operating cash flow rose 10% year-over-year, to $890 million. Free cash flow (which includes capital spending) rose 20%, to $760 million.

CFO Amy Weaver announced she will step down but will stay on until a successor is found and then serve as an advisor.

For the fiscal third quarter, Salesforce expects earnings of $2.42 to $2.44 per share on revenue of $9.31 billion to $9.36 billion, close to analyst estimates.

The company also raised its full-year guidance, projecting earnings of $10.03 to $10.11 per share and revenue growth of 8% to 9%. Salesforce increased its full-year adjusted operating margin guidance to 32.8%, up from the previous forecast of 32.5%.

CRM shares are -3.8% so far this week.

CrowdStrike (CRWD)

CrowdStrike reported strong fiscal second-quarter results but reduced its full-year guidance following a global outage.

Revenue grew 32% year-over-year to $963.9 million, and net income rose to $47 million, or 19 cents per share, up from $8.47 million, or 3 cents per share, a year ago.

Annual recurring revenue reached $3.86 billion, slightly above estimates. However, professional services revenue dropped to $45.6 million due to free remediation services provided after a major outage on July 19 caused by a flawed update, which affected millions of computers and disrupted various industries.

For the next quarter, CrowdStrike expects adjusted net earnings of 80 to 81 cents per share on $979.2 to $984.7 million in revenue.

However, for the full fiscal year 2025, it lowered its guidance to $3.61 to $3.65 in adjusted earnings per share and $3.89 billion to $3.90 billion in revenue, down from previous forecasts. The revised guidance reflects the ongoing impact of the outage, including a $30 million negative subscription revenue hit each quarter and reduced professional services revenue.

CRWD shares are +2.1% so far this week.

Lululemon (LULU)

Lululemon lowered its guidance and reported its first revenue miss in over two years due to a botched product launch and slowing growth in the Americas.

Sales rose 7% year-over-year to $2.37 billion, while net income for the quarter increased to $393 million, or $3.15 per share, up from $342 million, or $2.68 per share, a year earlier.

The company missed expectations on comparable sales, which grew just 2%, well below the forecasted 5.9%. Comparable sales in the Americas fell by 3%.

Lululemon pulled its new Breezethrough leggings after complaints about the product’s fit. CEO Calvin McDonald acknowledged the failed launch as a learning opportunity. The company also faced issues with its product assortment, such as lacking desired colors and sizes, which impacted U.S. sales.

Lululemon now expects sales to grow 6% to 7% in the current quarter, below the 9.2% growth analysts expected. However, its profit guidance is roughly in line with estimates, with expected third-quarter earnings per share between $2.68 and $2.73.

The company revised its full-year revenue guidance to a range of $10.38 billion to $10.48 billion, down from the previous forecast of $10.7 billion to $10.8 billion. Full-year earnings per share are now expected to be between $13.95 and $14.15, down from earlier guidance of $14.27 to $14.47.

LULU shares are -2.7% so far this week.

Dollar General (DG)

Dollar General shares dropped after the retailer slashed its full-year sales and profit guidance, indicating financial struggles among its lower-income customers.

Quarterly sales rose 4.2% to $10.21 billion, but net income fell to $374 million, or $1.70 per share, down from $469 million, or $2.13 per share, a year earlier.

Same-store sales increased by just 0.5%, driven by higher customer traffic but offset by lower transaction amounts.

Consumables sales grew by 6%, but sales of seasonal goods, home products, and apparel declined.

Gross profit margin decreased to 30%, down from 31.1%, due to the shift toward consumables, increased markdowns, and inventory losses.

Dollar General lowered its outlook for fiscal 2024, now expecting same-store sales growth of 1.0% to 1.6%, down from the previous 2% to 2.7% forecast. Full-year earnings per share are expected to be between $5.50 and $6.20, significantly below the prior forecast of $6.80 to $7.55 per share.

DG shares are -30.1% so far this week.

Ulta Beauty (ULTA)

Ulta Beauty shares dropped after the company missed second-quarter expectations and lowered its full-year guidance due to a decline in same-store sales.

Revenue rose slightly to $2.55 billion from $2.53 billion a year ago, while net income fell to $252.6 million, or $5.30 per share, from $300.1 million, or $6.02 per share, last year. This marked Ulta's first earnings per share miss since May 2020 and its first revenue miss since December 2020.

Comparable sales fell 1.2%, a sharp contrast to the 8% increase a year ago and well below the expected 1.2% growth.

Earlier in the month, Warren Buffett’s Berkshire Hathaway disclosed a $266 million stake in Ulta, which had temporarily boosted the stock. However, the company's shares had already fallen 32% in 2024, including a 26% drop in the second quarter.

Ulta now forecasts flat to a 2% decline in full-year same-store sales, down from prior guidance of 2% to 3% growth. The company also lowered its full-year revenue outlook to $11 billion to $11.2 billion, down from $11.5 billion to $11.6 billion, and reduced its earnings per share forecast to $22.60 to $23.50, down from $25.20 to $26.

ULTA shares are -5.8% so far this week.

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Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.