markets

Luke Kawa4/29/26

Avis erases what’s left of its 390% April gain on news that major holder dumped 4.3 million shares

Oftentimes when you rent a car, you take it right back where you got it from.

Same thing for shares of Avis, apparently:

The rental car company’s stock is down about 20% this morning amid a mixed set of quarterly results thanks to the revelation that one of its biggest shareholders, Pentwater Capital Management, sold over 4.3 million shares on April 22 at very wide range of prices (from about $250 to $700).

That session, Avis traded up nearly 19% in the premarket (breaching $800) but closed down a whopping 37.8%. At its premarket lows, the stock had erased its entire monthly gain, which was 390% as of the close on April 21.

Somewhat inexplicably, not only did Avis fail to exhaust the 5 million-share at-the-market offering it launched in late March at the onset of this parabolic move, but it didn’t even sell a share!

“It is important to note that Avis has not bought or sold a share since 2024,” CEO Brian Choi said during the earnings call on Wednesday.

“We were in a quiet period,” he added, when asked about why the company didn’t take advantage of its lofty share price. “But I can tell you this much: we have no intention of issuing shares anywhere near these levels.”

The footnotes of Pentwater’s filings note that some of its sales run afoul of the mandate that insiders and over 10% holders can’t make money on trades within a six-month period, and that it has “agreed to voluntarily disgorge to the Issuer any short-swing profits realized from these matchable transactions in accordance with Section 16(b) of the Securities Exchange Act of 1934.”

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Helena Cheng11h

Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

EPS of $1.69 vs. the $1.68 expected.
Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

markets

US job growth skyrocketed in May, blasting past expectations

The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

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