The New York Budgets

Tag: Earnings

  • Netflix upheld its 2025 forecast, but this might not reflect the confidence it appears to convey

    Netflix upheld its 2025 forecast, but this might not reflect the confidence it appears to convey

    Netflix executives messaged Thursday that all is well with the business in the face of economic turbulence. But its full-year outlook tells a slightly more nuanced story.

    Netflix posted a big beat on operating margin for the first quarter, reporting 31.7% compared with the average estimate of 28.5%, according to StreetAccount. And it guided well above analyst estimates for the second quarter — 33.3% against an average estimate of 30%.

    By its own phrasing, Netflix was “ahead” of its own guidance for the first quarter and is “tracking above the mid-point of our 2025 revenue guidance range.”

    Still, Netflix declined to alter any of its longer-term projections. That suggests Netflix isn’t quite as confident in its second half.

    “There’s been no material change to our overall business outlook since our last earnings report,” Netflix wrote in its quarterly note to shareholders.

    U.S. consumer sentiment is at its second-lowest level since 1952 as President Donald Trump’s new tariff policies roil markets.

    Co-CEO Greg Peters noted during the company’s earnings conference call that Netflix has, in the past, “been generally quite resilient” to economic slowdowns. Home entertainment provides a cheaper form of leisure than most other activities. A monthly Netflix subscription with ads costs $7.99.

    But the question remains how — or whether — an economic slowdown would pinch Americans’ wallets and force higher churn among streaming subscriptions.

    Netflix stopped reporting quarterly subscriber numbers this quarter, so the company will likely not detail if it sees a customer slowdown later this year beyond reporting its underlying revenue and profit.

    First-quarter revenue of $10.5 billion was roughly in line with analyst expectations, while second-quarter guidance of $11 billion is slightly above.

    “Retention, that’s stable and strong. We haven’t seen anything significant in plan mix or plan take rate,” said Peters. “Things generally look stable.”

  • L’Oreal Sales Increase as Growth in Europe Compensates for Weakness in the U.S.

    L’Oreal Sales Increase as Growth in Europe Compensates for Weakness in the U.S.

    L’Oreal reported a rise in first-quarter sales on Thursday, beating expectations for slower growth, as strong demand for its creams and perfume in Europe helped counter challenging conditions in the United States.

    The French group, which makes Maybelline mascara and Kiehl’s skincare, posted like-for-like sales up 3.5%, though they were inflated 2 percentage points by advance shipments to China ahead of a change in IT systems.

    Growth of 1.5% still beat a Visible Alpha consensus of 1.1% cited by analysts at Jefferies.

    “This is a decent update in the context of anxieties,” the analysts said in a note, pointing to concerns after luxury group LVMH reported slower growth at its beauty retailer Sephora in the quarter.

    L’Oreal’s U.S.-listed shares gained 6% in New York trading, while shares in U.S. rival Estee Lauder were up 3.4%.

    L’Oreal has outperformed the global cosmetics market in recent years with products that span mass-market makeup to high-end perfume and doctor-recommended lotions.

    But after weathering a protracted slowdown in number two beauty market China in recent years, it is facing weakening consumption in the largest U.S. market too, one it had targetted for growth this year.

    “The market did not exactly start as we were hoping,” CEO Nicolas Hieronimus told analysts on a call, though added it was too early to adjust his forecast of 4 to 4.5% global market growth.

    L’Oreal’s North America sales fell 3.8% in the quarter, compared with growth of 1.4% in the prior three months, dragged down by sluggish makeup demand.

    With growing unease over escalating trade tensions, U.S. consumer sentiment deteriorated sharply in April, which typically hurts spending in any category, said Hieronimus.

    L’Oreal, which imports 30% of its product in the U.S. from Europe and elsewhere, will also need to raise prices to mitigate the impact of President Donald Trump’s tariffs, though the company has built up some stocks, delaying any impact until the second half, said the CEO.

    He also flagged “slightly better than expected” performance in China, which was “flattish” compared with negative at the end of last year.

    All other regions grew, with Europe, accounting for a third of revenues, the largest contributor to sales that reached 11.7 billion euros ($13.30 billion) for the three months to the end of March.