These 2 stocks made investors happy after hours on Monday

The stock market fell on Monday as investors entered the shortened Thanksgiving trading week with renewed concerns about the outlook for the holiday season and how poor macroeconomic conditions could hurt consumer demand. The Nasdaq Compound (NASDAQ INDEX: ^IXIC) recorded the largest decline, while Dow Jones Industrial Average (DJINDICES: ^DJI) and S&P500 (SNP INDEX: ^GSPC) held up relatively better.


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Data source: Yahoo! Finance.

After the closing bell, several companies released their quarterly financial results. Both Dell Technologies (NYSE:DELL) and Urban outfitters (NASDAQ: URBN) had strong numbers that gave investors greater confidence in their outlook, which helped push their stock prices higher after hours trading. Here’s what Dell and Urban Outfitters had to say and what investors took away from the reports.

Dell reports solid earnings growth

Dell Technologies shares rose nearly 2% at 5 p.m. ET after rising nearly 5% earlier in the after-hours trading period. The hardware maker beat analysts’ expectations in its fiscal third quarter, which ended Oct. 28.

Dell’s numbers were mixed. Revenue actually fell 6% to $24.7 billion, reflecting the slowdown in high demand levels related to the pandemic in the prior year period. However, Dell has done a good job of bolstering its profitability. Adjusted net income jumped 30% to $1.71 billion, and its adjusted earnings rose nearly 40% year-over-year to $2.30 per share.

A closer look at the third quarter results, however, reveals that there are two very different stories going on within the company’s various divisions. Revenue for Dell’s Infrastructure Solutions Group reached a record $9.6 billion, up 12% year-over-year. Dell also posted double-digit percentage gains in its storage division and in the server and networking segment. The group’s operating profit climbed 54% compared to the levels of the previous year.

Meanwhile, the client solutions group was weak, with revenue down 17% on a 29% decline in consumer sales. Its operating profit fell by 7%.

Dell investors weren’t surprised to see Commercial fight for PC-driven client solutions, and they were pleased to see the company respond by being more responsive to the needs of enterprise customers. This could be key to its long-term success, and with the stock down around 30% so far this year, Dell’s management will need to stay focused on its strategic vision in order to stage a longer-term recovery. term.

Urban Outfitters releases fitting results

Meanwhile, shares of Urban Outfitters gained more than 2% after hours. Despite some challenges, the retailer held up well in a tough environment during its fiscal third quarter, which ended Oct. 31.

Urban Outfitters increased revenue slightly, with net sales climbing nearly 4% year-over-year to $1.18 billion. Same-store retail sales were up 4%, with the Anthropologie concept store seeing the biggest gains at 13%. Free People also posted a strong 8% gain, but at its namesake Urban Outfitters stores, same-store sales fell 9%. A decline in wholesale segment revenues also weighed on overall revenue performance.

Conditions were tougher for Urban Outfitters’ profitability. Its gross margin fell more than 4 percentage points to 30.4% and its net income fell 58% year-over-year to $37.2 million, or $0.40 per share.

As many retailers, Urban Outfitters saw its inventory levels increase during the quarter. This could be problematic at the start of the holiday season, as it could force Urban Outfitters to increase its promotional activity, putting even more pressure on its margins as it nears the end of its fiscal year.

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Dan Caplinger has no position in the stocks mentioned. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.