Stocks rallied on Tuesday, shrugging off a missile launch by North Korea and embracing comments from the Fed Chair nominee and the prospects for a tax bill. The Dow Jones Industrial Average (DJINDICES: ^DJI) closed up over 200 points to a record. The S&P 500 (SNPINDEX: ^GSPC) also set a fresh record.
Today's stock market
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Data source: Yahoo! Finance.
Bank stocks led the market today after Fed Chair nominee Jerome Powell indicated during Senate testimony that the Fed will likely raise rates next month. The SPDR S&P Bank ETF (NYSEMKT: KBE) soared 3.2%. Retail stocks were also strong coming off the big shopping weekend, with the SPDR S&P Retail ETF (NYSEMKT: XRT) rising 3.1%.
Two individual stocks had big gains after reporting earnings. Thor Industries (NYSE: THO) announced strong results, and Tech Data (NASDAQ: TECD) corrected some profit issues.
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A strong quarter electrifies Thor stock
Recreational vehicle specialist Thor Industries reported spectacular results for its fiscal first quarter, and investors drove shares up 13.3% to an all-time high. Sales increased 31% to $2.23 billion and earnings per share jumped 63% to $2.43. Wall Street was expecting sales to rise 17% and EPS to grow 24%.
The company's business showed strength across the board. Sales of towable RVs, the company's largest segment, increased 34% to $1.62 billionm and sales of motorized RVs were up 23%. Margins improved, too. Gross margin increased to 14.9% compared with 13.9% last year, due to operational efficiencies, favorable changes in the product mix, and selective price increases. Net profit margin improved from 4.6% to 5.8%.
"Coming out of our Open House event in September and the RV Dealers Association event in November, dealer optimism remains high and we believe the industry will continue to grow for the foreseeable future," said CEO Bob Martin in the press release. "Dealers and consumers are enthusiastic about our product offerings in all major product categories of more affordably priced towable and motorized RVs."
Thor is riding a wave of growth in the RV industry and obviously executing very well as it focuses on experience-oriented Gen X and millennial customers. Order backlog grew nearly 70% to $3.58 billion, indicating there could still be plenty of growth ahead.
Tech Data beats profit estimates
Shares of Tech Data, a wholesale distributor of technology products, soared 10.2% after the company reported third-quarter profits that beat analyst expectations. Sales increased 41% to $9.14 billion, slightly above the analyst consensus estimate of $9.11 billion. Non-GAAP earnings were up 39% to $2.00, near the top end of guidance given last quarter and above the $1.92 analysts were expecting.
Most of the sales gain was due to the acquisition of the Technology Solutions arm of Avnet earlier this year. On a pro forma basis, the rest of the business grew sales in low single digits in constant currency, according to management estimates, including a sales gain of mid-single digits in the Americas. Non-GAAP earnings numbers excluded costs relating to the acquisition; on a GAAP basis, EPS actually fell from $1.03 to $0.97.
Tech Data is rebounding after reporting disappointing profits in its fiscal Q2 . The company said in the conference call that some execution issues that had affected margins had been corrected, but that the market environment remains very competitive. Even with today's gain, the stock still has not recovered fully from its plunge three months ago, but an encouraging outlook for profit had investors thinking the company is on track.
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