McDonald’s Turnaround Plan Needs Salt; Warren Buffet Likes His Sugar; Chevy Volt Wants to Electrify

Would you like to supersize that?

Image courtesy of pakorn/FreeDigitalPhotos.net

Image courtesy of pakorn/FreeDigitalPhotos.net

McDonald’s CEO Steve Easterbrook finally revealed to all who were maybe mildly interested about his big plan is to steer McDonald’s back towards fiscal awesomeness, all in the course of a 23 minute video. The world’s biggest burger chain wants to re-franchise 3,500 of its stores. Because franchising offers “stable and predictable cash flow” from collecting fees, it will supposedly save the company about $300 million a year.  And who doesn’t like saving $300 million. Then, Easterbrook wants to make the company’s corporate structure and bureaucracy less “cumbersome” by dividing the company up into four neat little parts. Well, maybe not little. But certainly neater.  The first part is all about U.S. stores. International markets like, Australia and the U.K make up part number two. The third part is labeled high growth markets  – think China and Russia. Then, all those other countries in the world make up the fourth group.  Of course, no master revival plan would be complete without incorporating a customer-focused approach and the ever-menacing prospect of…accountability. But hey whatever works. And something needs to after the company posted a 2.3% drop in sales and revenue that was way too short of its target. Despite detailing this new plan Mc Donald’s couldn’t get Wall Street excited enough to send shares up, even a little.

Enjoy a Coke with Warren Buffet…

Image courtesy of tiverylucky/FreeDigitalPhotos.net

Image courtesy of tiverylucky/FreeDigitalPhotos.net

In case you couldn’t make it to the the Berkshire Hathaway shareholders meeting this weekend, also known as Woodstock for Capitalists, here are but a few of the pearls from that auspicious event. Wells Fargo, Coke, IBM and AmEx rock, at least according to the Oracle of Omaha. Mr. Buffet clearly knows a thing or two of what he speaks since his company has a market value of a staggering $350 billion. When he discussed Coca Cola and the $16 billion stake his company owns in it, the debate about the adverse health effects of sugar didn’t seem to concern him. He feels that people enjoy Coke and thus, it apparently makes them happy. Unlike Whole Foods, which he said, “I don’t see smiles on the faces of people at Whole Foods.” No doubt Whole Foods was not happy about that comment. He was also asked about his involvement with 3G Capital with whom he is now buying Kraft Foods. People have taken issue with 3G over its practice of buying companies and then laying off many of its employees. Mr. Buffet, however, said, “I don’t know of any company that has a policy that says we’re going to have a lot more people than they need.”  How charming. As for naming a successor, well, he didn’t.

Low-voltage…

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Even though gas prices are pretty low, making gas-guzzling SUV’s that much more appealing, that’s not stopping car companies, like GM, from parading out its latest eco-friendly models. The 2016 Chevy Volt model is making its debut and what is supposed to be so electrifying about it is that it’ll be around $1,500 less than the 2015 model. It’ll also get 30% more mileage from a single charge than the 2015 model. It’s a bit redesigned and there’s even a $7,500 federal income tax credit. But to be fair, it’s not a fully electric vehicle because if you find yourself coasting along  the highway – or any road, for that matter – and the battery juice runs out, the Volt becomes just another regular gas guzzler.  If that doesn’t bother you – and why should it – then consider that Chevy is offering 0% financing for 72 months for qualified buyers. Unqualified buyers should take the bus. California’s even offering a $1,500 rebate which pretty much means that GM doesn’t think there’s going to be a waiting list for this particular automobile. Because let’s face it, a Tesla it’s not.

Taser International Shocks Wall Street; Marissa Mayer’s Having a Plentiful Year; Laboring Away

Zap to it…

Image courtesy of digitart/FreeDigitalPhotos.net

Image courtesy of digitart/FreeDigitalPhotos.net

Nothing like accountability to drive earnings up. The big winner amongst the civil unrest that has been infecting our country is Scottsdale-based Taser International. The company just reported strong first quarter earnings that beat expectations. The company reported revenue of $44.8 million with earnings per share of 13 cents, while analysts only expected 7 cents on $40 million in revenue. News of the boffo earnings even sent shares of the company up nearly 10% at one point today. Maybe analysts haven’t seen the news lately, because a lot of that came from Taser’s Axon body cameras  – yeah, they make those too – which, given all the unfortunate events involving law enforcement, are rapidly gaining in popularity. It seems everybody wants law enforcement to don those body cameras from lawmakers to average citizens.Yes, it’s hard to believe it wasn’t just the zappers that led to those great first quarter earnings.  In fact, Taser’s products are so hot lately (no pun intended) that shares are up 83% for the year.

Going green…

ID-100263381

Marissa Mayer had a very good year. Well, in her bank account anyway. However, it could have even been better. The Yahoo chief pulled down about $42 million for 2014, only getting a little more than half of her $2 million target bonus and and close to 70% of her stock awards. She could have made more. A lot more. Like way over $12 million more. Like more than $55 million in total. But, alas, the company stock didn’t do as well hoped. Oh well. Maybe next year. The way it works over at Yahoo, and presumably many other companies like it, is that folks like Ms. Mayer get paid according to how well they perform and if they are able to meet certain goals set by the board. She didn’t exactly meet them but she is not exactly hurting either. Since she took the helm at the company in 2012, Yahoo’s stock more than doubled. It also helps that Yahoo has a big chunk of Alibaba Group, which helped bring in some that $42 million. As for 2015, the Yahoo chief isn’t expected to take in as much since some of that bonus cash was from one time stock and option awards. But she’ll likely still have more than enough for a rainy day.

Labor gains…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Looks like there are a lot less people filing for unemployment benefits, according to the Department of Labor.  In fact, it’s been 15 years since numbers like this have even graced our fickle little economy. The number of people collecting unemployment checks for the very first time fell 34,000 to 262,000 applicants.  Analysts expected that number to be closer to 290,000 people. Employers even added 126,000 people to the payroll. Even the number of people who collect unemployment checks took a nice welcome dive by about 74,000 to 2.25 million people. That’s another figure that hasn’t been this low in almost fifteen years. All that aggravation over March’s numbers that gave us such fiscal economic anxiety turned out to be much ado about nothing. Well, it wasn’t nothing, but at least we can relegate it to a bad, distant memory.

Nothing to Chirp About at Twitter; Lumber Liquidators Earnings Nearly Hit the Floor; Ben Bernanke’s Impressive Resume

Chirp…

Image courtesy of Mr-Vector7/FreeDigitalPhotos.net

Image courtesy of Mr-Vector7/FreeDigitalPhotos.net

What’s worse? Having your earnings leaked prematurely or the fact that those earnings were so bad? Hmmm. This one’s a toss up. Either way, Twitter’s bummed on all ends. Earnings reports are released only after the closing bell or right before the opening bell giving traders/investors/wannabes a chance to study the numbers and figure out how to proceed. Twitter’s “inadvertently” pre-maturely released earnings, which occurred on its very own platform, sent the stock south 20% and even caused trading of the stock to be suspended for a period. But that was only Twitter’s second worst day ever.  As for the horrible numbers, sales are actually up 74% over the previous year but the problem – and it’s a big one – is that Twitter’s growth rate is not up. User growth grew 18% to 302 million active users. But last month it grew 20%. Those figures are only supposed to go up. Never down. And herein lies one of social media company’s many many problems. Another is that CEO Dick Costolo’s credibility has come under fire and here’s why: It seems he didn’t see the writing on the wall, namely that all signs were pointing to a major slowdown.

Floor-ed…

Image courtesy of Serge Bertasius Photography/FreeDigitalPotos.net

Image courtesy of Serge Bertasius Photography/FreeDigitalPotos.net

Things at Lumber Liquidators keep getting worse as the company reported its first quarter earnings and to the surprise of no one, the company took a loss of $7.9 million and 29 cents per share on $260 million in revenue. I have to wonder if analysts didn’t hear about the scathing “60 Minutes” report that accused the company of selling formaldehyde-laced flooring because they expected the company to at least gain 15 cents a share. To give you an idea of just how bad those earnings really are, last year at this time the company took in a profit of $13.7 million and 49 cents a share. In case you were wondering how the company even made any money this quarter, most of it comes from January and February, before the damning piece even ran on March 1. Much of those losses are because of all those legal and professional fees the company has been shelling out to defend itself. But it’s safe to assume that people also are probably not buying from a company that would allow toxins to make their way into the company’s products. And the trouble just keeps coming. Lumber Liquidators says it is aware of the over 100 pending class action lawsuits against it. Even the Department of Justice has entered the fray seeking criminal charges against the company under the Lacey Act. Oh and one more thing, its CFO, Daniel Terrell, needs to brush up his resume as he’s leaving the company.

Ben…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Ben Bernanke’s LinkedIn profile seems to be filling up nicely. First he took a position as a distinguished fellow in residence at the Brookings Institution. Then he picked up a consulting gig at hedge fund, Citadel. Now, the former Federal Reserve Chairman has some new West Coast digs, thanks to PIMCO, who just announced that Mr. Bernanke would be joining its ranks as a senior adviser. PIMCO could definitely use Mr. Bernanke’s guidance right about now as investors have pulled about $100 billion from the fund following the departures of Co-Chief-Investment Officers, Bill Gross and Mohamed El-Erians last year. The former fed chairman will still have plenty of cash to play with as PIMCO handles about $1.59 trillion and runs the world’s biggest mutual fund. He’ll even get to “engage” with clients, which should help win back some of that $100 billion and assuage the fears of those finicky investors.

Nothing Luxurious About Coach’s Earnings; Just Ship It; Can It Get Any Better for Apple?

Not on trend…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Consumers just aren’t feeling the love for Coach, at least in the United States, as evidenced by its third quarter earnings. Those earnings can best be described as short on style and long on disappointment, as sales here took a nasty 24% dive to $493 million. Last year at this time sales hit $648 million in the U.S. As for the rest of the world, the company saw sales plunge 15% to $929 million, a far cry from the $949 million analysts were predicting. It wouldn’t be right not to put some of the blame on the strong U.S. dollar. After all, it’s the thing to do these days. But that excuse can only go so far. At least Coach managed to beat Wall Street’s profit expectations by a whole penny. Yeah you read that right. Coach’s net income came in at $81.1 million and 36 cents per share. That figure might have been somewhat impressive if not for the fact that last year at this time Coach saw a profit that was more than double at $191 million and 68 cents per share. The leather goods company better hope its $547 million Stuart Weitzman acquisition pays off as Coach has some very unflattering plans to shut down 43 shops and twelve outlets.

Brown paper packages tied up with string…

Image courtesy of tigger11th/FreeDigitalPhotos.net

Image courtesy of tigger11th/FreeDigitalPhotos.net

You know whose earnings didn’t suck? Hint: Brown delivery trucks. Indeed, UPS delivered some very impressive digits, which is especially awesome considering the hit it took during the holiday season. Just how impressive were these earnings? Well, the company took in $14 billion worth of revenue, a 1.4% increase from last year. That’s a lot of packages. Actually, it’s about 1.1 billion packages, 2.8% more than last year, to be precise. Unfortunately, Wall Street analysts actually expected more from the shipping company and hoped it would reach $14.3 billion. But, oh well. No one seems to be too upset since UPS managed to score $1 billion in profits at $1.12 per share, easily taking down analyst estimates of $1.09 per share. Last year at this time UPS saw a profit of $911 million with 98 cents per share. The tricky part, however, is that even though the stock is up 14% from a year ago, it is still down 11% for the year. Strange how that works out.

Keeps getting better and better and…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Apple has done it again. Yawn. The iPhone/iPad/Master of the Universe reported another epic quarter of earnings that leave just about every single other company – in the world – green with envy. With $58 billion in sales, Apple scored $13.8 billion in profits adding a very plump $2.33 per share. I guess that’s what happens when you sell 61 million iPhones. For those lucky enough to own shares of the company, their dividends went up too. The company is oozing money  – like, $194 billion of it – with $33 billion of it just in cold hard cash and the rest in investments, which, knowing Apple, will pay off handsomely. Oh, and did I mention the stock hit a new high? Well, I just did. All this, and the Apple watch barely hit the market. Have you ordered yours yet? They’re going for between $349 – $17,000. That ought to make Apple’s next earnings report a bit more interesting.

McDonald’s It Ain’t as Burger King Posts Whopper Earnings; Chipotle Crosses GMO Off Its Menus; WalletHub Gives You the Lowdown on Where to Start a Biz

Royal earnings…

Image courtesy of joephotostudio/FreeDigitalPhotos.net

Image courtesy of joephotostudio/FreeDigitalPhotos.net

Looks like the Burger King-Tim Hortons merger paid off as the newly formed company, Restaurant Brand International Inc., the world’s third largest fast-food company, posted some very impressive earnings. Those earnings had a little help from some of those tasty chicken fries and the ever-popular Spicy BLT Whopper Sandwich. Pulling down $932 million in revenue and taking in 18 cents a share, the company beat analysts’ estimates by 3 cents. In fact, the home of the Whopper had its best quarter for growth in almost ten years, unlike fast-food chain rival, McDonald’s who can’t seem to do anything right these days to get its earnings on the uptown train. Burger King has 14,300 restaurants with about half just in North America. Sales at Burger King picked up 9.6% while Tim Hortons saw an 8.1% rise. The company is even giving out a 10 cent per share dividend. And who doesn’t like a dividend?  These earnings might not be sitting too well with the Department of the Treasury who is downright aghast at companies merging for tax inversion purposes. In case you don’t recall, that’s when U.S. companies merge with foreign companies in an effort to pay a reduced tax rate in the U.S. The Department of the Treasury has since been doing its super, very best to make those tax inversion mergers that much more difficult to complete.

I got 99 problem but GMO’s ain’t one…

Image courtesy of rajcreationzs/FreeDigitalPhotos.net

Image courtesy of rajcreationzs/FreeDigitalPhotos.net

In case you get a yen for some GMO – as in, genetically modified  – nourishment, you needn’t bother getting your fix on at Chipotle. They’ve dropped that ingredient from its cuisine. At least in the United States. It seems like only yesterday that Chipotle was serving up genetically modified soybean oil and corn. Actually it was yesterday and those ingredients were actually found in a number of items at the eatery including its tortilla chips and taco shells. Perhaps you recall two years ago when Chipotle brought the issue of GMO’s to our attention and graciously began listing the offending items on its menu that contained such ingredients. Chipotle became the first restaurant to do such a thing and, in its own special way, passively-aggressively began menu-shaming other fast-food establishments who didn’t own up to their genetically-modified flawed menus. However the scientific community has yet to jump on the anti-GMO bandwagon, or even find anything alarming or problematic with using GMO’s. Even though Chipotle recently missed earnings estimates, with some of that owing to a pork shortage for its beloved carnitas, the stock seems to be holding steady at around $640 per share.

Location location location…

Image courtesy of jennythip/FreeDigitalPhotos.net

Image courtesy of jennythip/FreeDigitalPhotos.net

If you like the idea of being your own boss, the question of where to set up shop might just be the most important decision you make in starting your own business. Good thing the fine folks over at WalletHub already did the research for you so you can focus on the fun stuff, like zoning permits and plumbing problems. Using a bunch of useful criteria, from space affordability to how educated a locale’s labor force is, WalletHub compiled a list of “2015’s Best Cities to Start a Business.” Of the 150 cities listed, some of the more notable gems from the study found that the South is where it’s at with Shreveport, Louisiana taking the top spot. In fact Southern cities dominate most of the top ten spots. Figures as they know a thing or two about hospitality. Thinking of starting your own business in California? Well, don’t. Several cities in the Golden State fall at the wrong end of the list. As for the 150th best city to start your business? That distinguished honor belongs to Newark, New Jersey.

GM Earnings Not So Revved Up; Wall Street Goes Dunkin’ DoNUTS ; Its Girl Scout Cookie Time – All the Time

Unstoppable?

Image courtesy of olovedog/FreeDigitalPhotos.net

Image courtesy of olovedog/FreeDigitalPhotos.net

General Motors came out with its quarterly earnings and you’d hardly know all the fiscal trouble it was dealing with just a year ago. Except for the fact that it reported a glaring $1.7 billion drop in revenue, not to mention all those charges to compensate victims of the recall debacle. The auto company earned $945 million and 86 cents a share this quarter when a year ago GM was staring down the wrong end of a $1.2 billion recall and a paltry profit of just $125 million. GM, incidentally, missed expectations by 11 cents. Try not to get too worked up over that. The automaker did pretty well in the U.S. as fuel prices continued their downward trend sending subliminal messages to consumers that it’s okay to buy all those hunky trucks and SUV’s. But those numbers would have been much higher were it not for a pesky higher tax rate and a strong U.S. dollar. Of course, it wouldn’t be right not to mention Russia and all the fiscal problems it has been causing GM in that part of the world. So there, I mentioned it.

Sweet tooth…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Dunkin’ Donuts also released earnings which were positively scrumptious. Well, duh. Have you been in one of their stores lately. I have. This morning, as a matter of fact. And, as usual, I had to wait on a long line. So there. Anybody who patronizes their donuts shops could have told you those donuts were gonna pull off some impressive earnings. So what were those magical numbers, you might be wondering. Dunkin’ Donuts pulled in 40 cents per share, easily topping analysts’ estimates of 35 cents per share. Not bad for a company that sells donuts for a little over a dollar each. As for revenues, well those sugary confections pulled down close to $186 million, once again beating predictions of $180.65 million. Apparently, much of that success was attributed to the wildly caloric and ridiculously tasty croissant donuts.  Dunkin’ Donuts Chief Nigel Travis said the chain managed to pull off these impressive digits despite a nasty winter. But I suspect, in my most humble, unprofessional opinion, that perhaps, those numbers were because of it. Think about it: a hot beverage and a sweet treat. What better way to spend a wintery morning? Well, flying to Hawaii is one way, but I digress. If its earnings weren’t sweet enough for you, then how about the fact that the donut chain also raised its outlook on revenue growth from a previously estimated 5% – 7% to a revised 6% – 8%. Can we say sprinkles on top?

Sweeter tooth…

Image courtesy of  pupunkkop/FreeDigitalPhotos.net

Image courtesy of pupunkkop/FreeDigitalPhotos.net

No need to wait anymore for one of your co-workers to hit you up to buy Girl Scout cookies from their daughters on the same day you start your diet. Now you can sabotage your diet goals all year round as the Girl Scout Organization has announced it will be offering a Do-It-Yourself version, easily accessible from your local Wal-Mart, Target or Toys R Us stores beginning this summer.  In fact, it’s so easy, 8 year olds can do it. By themselves. Literally. The Easy-Bake Oven it is not, as Hasbro has the licensing deal for that one. But this new toy is sure to give Hasbro a run for its money as the Girl Scouts of America teamed up with Wicked Cool Toys to offer the latest way for small children to learn the fine art of capitalism. And baking And just eating cookies. The oven toy will sell for about $60 a pop and and comes with one pack of cookies. But just how this new enterprise will affect the 200 million boxes of cookies sold each year remains to be seen.

March Goes In Like a Lion and Out With Impressive Housing Numbers; McDonald’s Earnings: Not Lovin’ It; Why Chipotle’s Not Very Chipper Today

Single homes, town homes, and condos, oh my!

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Don’t you just love it when good things happen in the economy? Today’s bearer of fiscal sunshine is brought to us by the folks over at the National Association of Realtors who have been very busy calculating some delightful numbers from March’s existing home sales. And wouldn’t ya know it? Sales of previously owned homes picked up well over 6%.That, number, by the way, is more than a 10% increase over the same time last year.  If that doesn’t put a smile on your Wednesday, than I don’t what does. Because there was so much more inventory and lots more from which to choose, 5.19 million transactions of several different types of abodes took place, definitely shadowing February’s underwhelming 4.89 million figure. March’s existing sales, believe it or not (though, why wouldn’t you), hit its highest levels in 18 months. Curious what the median price for a home was in March? How does $212,000 sound? If you don’t like it than you should have tried buying a house a year earlier because that $212,000 is a 7.8% increase over last year’s $196,700 median price tag.

Losing its luster…

Image courtesy of Stuart Miles/FreeDgitalPhotos.net

Image courtesy of Stuart Miles/FreeDgitalPhotos.net

The numbers are in for the Golden Arches and well, and it ain’t pretty. After announcing yet another quarter of disappointing earnings, the stock actually went up today. That’s because McDonalds CEO Steve Easterbrook announced that on May 4 he will unveil initial details of a plan that ought to turn the tides of fiscal woe at the world’s biggest burger chain. McDonald’s needs it now, more than ever, as chains like Chipotle and Taco Bell also announced earnings that McDonald’s would kill for right about now. While a shortage of pork and a bummer of a winter did some damage to Chipotle, its earnings still  managed to climb over 10%. As for Taco Bell, who has been taking digs at McDonald’s in an effort to boost its breakfast offerings, saw a 6% increase in its earnings. All this while McDonald’s pulled in a whopper of a failure (no offense, Burger King) coming in with earnings of $812 million and 84 cents a share. But wait a minute, the chain made money, so what’s the problem? The problem is that last year at this time, McDonald’s made way more money, like 32.6% more. Like $1.2 billion worth adding $1.21 to its shares. But as of late, McDonald’s numbers just keep going down. To be fair, 9 cents of that loss can be blamed on the strong U.S. dollar. But the rest of the losses belong all to McDonalds.

Speaking of Chipotle…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Chipotle, which has been happily stealing a nice chunk of McDonald’s clientele with its more wholesome offerings, could find itself in a similar pickle as the Golden Arches. While the Mexican Grill did do much better than McDonald’s, the chain still missed analysts’ estimates. Then to add hot sauce to the fiscal wound, the chain anticipates continued “rolling blackouts” until the end of the year, due to a shortage of pork, an essential ingredient in its beloved carnitas. Naturally, the news sent shares of the stock down over 8% at one point. Shares of the company, that has about 1,800 restaurants, are hovering around $640. Yes, per share.