Delta cuts flights ahead of summer travel, Gamestop stock pops, discount stores beat earnings

Delta Air Lines is cutting flights amid an ongoing pilot shortage, Gamestop shares are up on news of a new crypto and NFT wallet, and Dollar Tree and Dollar General both beat on earnings amid inflation.

Video transcript

RACHELLE AKUFFO: Welcome back, everyone. It is time for our triple play, and I'm picking one that it may help stretch a bit, which I'm talking about dollar stores. A strong day for the dollar stores here. We saw the Dollar Tree and Dollar General faring well, as both brands met and comparable sales beat Q1 estimates. Now after its earnings beat, you see that the Dollar Tree is up more than 20% there. And look at Dollar General. That's up almost 14% as well.

Now, we saw that both were able to navigate the supply chain headwinds better than a lot of others and were able to maintain their margins. Now this comes down to their more budget conscious consumers that these dollar stores cater to at even lower prices than Walmart or Target. You have to keep in mind, of course, inflation really biting into a lot of discretionary spending.

Now, Dollar Tree CEO Michael Witynski, he said, we are taking the necessary actions now to position ourselves for accelerated growth in what I view as the most attractive sector in retail, especially in the current economic environment. Now, we did see similar gains in 2009 during that Great Recession. So perhaps accelerated growth could repeat itself again, again.

SEANA SMITH: Yeah, we'll see. Rachelle, I think the big takeaway and what's most interesting to me about these two earnings reports, comparing that to what we saw from Walmart and Target last week, because it looks like two totally completely different stories. And they still, like you were saying, they cater to the lower income consumer, the consumer that is being hit very hard from inflation or by inflation. So the fact that Dollar General and Dollar Tree are doing so well, I think, also just speaks to management and what their executive team is doing, just in terms of navigating some of this uncertainty.

All right, well, my pick today is Delta. A lot going on in the travel space, but Delta specifically cutting about 100 flights a day from July, beginning of July, through mid-August. Now that's the heart of the very, very busy summer travel season. Now the airliner saying that they are doing it ahead-- to get ahead, excuse me-- of canceled flights as the industry struggles with pilot staffing shortages. Now, Delta is asking pilots to pick up extra shifts this weekend when it expects to fly about 2 and 1/2 million people-- that's 25% more than a year ago.

Now, Delta isn't the only airline that's cutting flights. JetBlue and Spirit have also announced similar moves. But you're seeing the move today. And just intraday today, Delta's up 6%. A lot of that has to do, Dave, with the fact that we heard some of their competitors out there, Southwest and JetBlue, upping their forecasts due to the very, very strong demand that they're seeing so far this summer.

DAVE BRIGGS: And we've talked about this off-camera, but I had some personal experience with these shortages and the cutbacks at Delta. A flight canceled going to VCON, which we'll talk about later in the show. Was never notified it was canceled. Got online, couldn't find a single flight from New York to Minneapolis, which, typically, you could find 20 or 30 on a Friday night. Couldn't get a hold of a customer service representative, couldn't reach anyone on the chat.

It was an absolute meltdown from start to finish, and now scrambling to beg for a refund that takes a couple of weeks. So this hits the consumer hard. It may not hurt their stock, but certainly is not helping their reputation.

SEANA SMITH: But you also have to beg the question, though, at what point do some of these loyal customers-- we know it's a big deal if you switch airlines, if you only use Delta. But at some point, I think they're going to see a backlash. But we'll see.

DAVE BRIGGS: I absolutely do. They'll see it right here, my friend. My play is a memer-- GameStop stock surging yet again. The current two-day rally on news that the video game retailer would launch-- you guessed it-- its own cryptocurrency and NFT wallet powered by Ethereum. Shares of GME were trading just over 80 bucks a share two weeks ago and are now threatening 130. GameStop still down, though, more than 45% year over year. But right now, today, they are up. They are up more than 10%. Rachelle, oftentimes, it is very difficult to predict where they are going to go. And this rally could come to a close, but it is a nice one in the last couple of weeks.

RACHELLE AKUFFO: I mean, you have to give credit to some of these meme stocks. They're getting very creative, whether it's investing in mining for gold and silver with your businesses and movies, or, as you see here now, turning to cryptocurrency, something so volatile. So I'm not sure if they're betting on the right horse here, but I do appreciate the creativity of trying to find ways to diversify their business to at least keep themselves afloat and perhaps get ready for the next phase of Web 3.0 and where some of these other tech investors seem to be headed.

SEANA SMITH: Rachelle, I like the positive spin that you're putting on this. I'm a little bit more skeptical. I think GameStop is really doing anything they can to generate some buzz, keep some of that excitement alive. We know a lot of those retail traders out there, even though they got burned last year, still come back to GameStop. You can see it in the intraday moves of this stock. So I don't know if NFTs is the right bet here for the company, but maybe I'm wrong.

DAVE BRIGGS: I'm going to split the difference. I guess, I'll say Ethereum, along with Bitcoin, are the two cryptocurrencies I trust a little bit. But I'm with you, my friend, on the NFT space. And we'll get much more into that later in the program.