AmEx Wants to Know What Your Loyalty is Worth; How Do You Say Opel-ease in Russian?; FedEx’s Hit and Miss

Where’s your loyalty?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Maybe membership does still have its privileges. AmEx is trying to make a comeback following its breakup with powerhouse retailer, Costco, and rumors of an impending break-up with JetBlue. To soothe it’s broken fiscal heart, the company is making plans to offer a rewards program called “Plenti.” Catchy, huh? Joining forces with Macy’s, Exxon, RiteAid, AT&T and a few other companies, AmEx is offering a loyalty program where American consumers get to cash in points earned on their AmEx cards, and then redeem the points at these retailers. I say Americans, because AmEx already has loyalty programs in other parts of the world, including Germany and Italy. Fill up your car at Exxon and then run over to Macy’s and buy yourself a shirt. Or some vitamins at RiteAid. Or insurance. Yes, I did say insurance since Nationwide Insurers is one of the partners. As is Hulu. Cool, huh? . Noticeably absent from the list of participants is a national grocer and home improvement retailer. But fear not, oh faithful spender, as rumor has it those slots are just about to be filled. If you’re wondering how AmEx benefits, it’s simple: AmEx gets a fee from its partners-in-retail. Clever indeed.

No more vroom…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

GM is coming to a screeching halt in Russia after taking a 74% hit in sales there with an 86% hit on its Opel brand alone. Hence, GM has put the kibosh on Opel production altogether and will be drastically slowing down production on its Chevy lines, chalking it all up to a $600 million loss. The collapsed ruble and dropping oil prices have dealt a major blow to the Russian economy, with car sales especially down 38%. So GM decided to make a run for it. However, if you find yourself in Russia and jonesing for a Corvette, then no worries. Because Corvettes are imported, they will still be making their way into the country, together with Tahoes and Camaros. Can’t you just picture Putin cruising the Kremlin in a Camaro? Oddly enough, or not, the automobile company is still looking to up its Cadillac game in Russia. The luxury auto has yet to catch up to the popularity of European automobiles BMW and Audi. Tragically, only 72 of them have been sold in Russia in the first two months of the year.

Special delivery…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

FedEx released its earnings report, regaling Wall Street and the world with news of its prosperous third quarter. One of the fiscal highlights was the $11.7 billion in revenue the company took in. Not a major difference than what experts forecasted, and a modest 4% gain over last year, but the number did hit its target so nobody was necessarily complaining on that front. The big exciting numbers, though, came courtesy of FedEx’s impressive profits. At $580 million and $2.01 per share, the company’s net income was a whopping 63% higher than last year at this time. Analysts only predicted a profit of $1.88. It’s kind of nice when analysts are wrong. Just saying. And for that very impressive feat, FedEx can thank low fuel prices. Of course there were a few other reasons too, but fuel could definitely be crowned the star of this one. But then its shares took a bit of dip today on the news of its less than impressive outlook. The company expects to pull in between $8.80 – $8.95 per share for the year but analysts much prefer to see $8.98 per share. FedEx’s performance tends to hint to Wall Street what we can expect from our fickle economy. So if FedEx is feeling a bit too fiscally modest and only moderately ambitious, it makes The Street a little edgy.

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Starbucks: Can’t We All Just Get a Latte; Pinterest Valuation Not So Pint-sized; Irish Airline’s Got a Flight For You

Race to the frappucino…

Image courtesy of amenic181/FreeDigitalPhotos.net

Image courtesy of amenic181/FreeDigitalPhotos.net

Starbucks’ latest campaign called “Race Together” has little, if nothing, to do with coffee. However, CEO Howard Schultz sees it as “…an opportunity to re-examine how we can create a more empathetic and inclusive society — one conversation at a time,” and presumably one $5 drink at a time, too. The idea is to have Starbucks baristas write, not just your name on your cup, but the phrase “Race Together,” in an effort to engage its customers, frequenting its 12,000 locations, in a dialogue on the very sensitive topic of race. The idea took form back in December, when Mr. Schultz held an internal meeting following the shooting deaths of unarmed black men in Ferguson, Staten Island and Oakland, California.  Several forums and thousands of employee statements later, #RaceTogether was born, and on March 20, USA Today will join hands with Starbucks as it offers a supplement to that day’s edition offering various ways to begin dialogue and promote discussions on race. It’s just another day in the life of Starbucks and Howard Schultz, who likes it when his company practices “conscious capitalism” (yes, that is a thing and yes, there are other companies who practice it) which is basically using a company’s invaluable resources for the power of social/societal good as opposed to…dare I say it…profit.

Pin it…

Image courtesy of Mister GC./FreeDigitalPhotos.net

Image courtesy of Mister GC./FreeDigitalPhotos.net

What would the world do without Pinterest? It’s a good thing we’ll never have to know as the social media/online bulletin company just picked up – ridiculously quickly, I might add – some $367 million. That cash is going to help fund some lofty international expansion plans, which makes perfect sense since 2014 saw Pinterest picking up 135% more international users. In fact, some 40% of Pinterest’s accounts come from beyond our cozy borders.  Some of this new funding comes from some veteran Pinterest investors, but newcomers are also joining the online bulletin board fray. It helps that Pinterest started selling ads, though, in the magical land of Pinterest, ads are elegantly referred to as promoted pins. Nothing like a little ad revenue, or rather, promoted pins to fiscally stir things up a bit. Thanks to these latest generous investor contributions, Pinterest’s valuation is now going to be in the $11 billion stratosphere. Although, if you want in, here’s your chance as the company is apparently still looking to raise about $211 million.

Bon Voyage!

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

Ireland’s famed budget airline, Ryanair, announced plans that it will begin to offer flights from 12-14 European cities between 12-14 U.S. cities.The company also announced that those flights could be as little as $15. No joke. Of course, that price doesn’t necessarily include an actual seat to sit in during the trans-atlantic flight, but hey, minor details. Indeed, there are many fees which will be quickly added to that attractive little fare, like meals, baggage fees, breathing…So by the time you finish selecting all those “extras,” you’ll likely be shelling out something closer to $275 per ticket. Which isn’t so bad when you consider that full budget airlines charge at least double that amount. And you’ll only have to wait 4-5 years. You see, Ryanair still needs to acquire a fleet of aircraft equipped to those make trans-atlantic flights. But like I said before, minor details.

 

Shake-y Shares for Shake Shack; Alibaba’s Snapchat-ty Investment; Lumber Liquidators Has Something to Prove

Shake Shack it off…

Image courtesy of joephotostudio/FreeDigitalPhotos.net

Image courtesy of joephotostudio/FreeDigitalPhotos.net

It was the food IPO to watch with 63 locations all over the world and growing. But just a few months later the enthusiasm for Shake Shack has lost some of its flavor. Fourth quarter revenue for the “fast casual” burger joint was up 51% to $34.8 million when analysts only expected $33 million – definitely nothing to balk at. Even same store sales went up 7.2% when analysts forecasted a much more modest 4% increase. So what exactly caused shares of the company to take an 8% dive in after hours trading yesterday? Hmmm. Could it be that bigger than expected net loss of $1.4 million and 5 cents per share? Analysts expected the company to take a loss for the big tax charge related to its auspicious IPO. Problem is, those same analysts figured the burger chain would only lose 2 -3 cents per share. But nobody on Wall Street or elsewhere seems too worried as Shake Shack has big expansion plans and anticipates it’ll pull in revenues for the year between $159 – $163 million.

Things that make you go hmmm…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The big news coming out of Alibaba is all about the big investment it just plunked down on Snapchat.  As in $200 million big.  The Chinese e-commerce giant, which generates more revenue than Amazon and eBay combined, just upped Snapchat’s valuation to $15 billion, all because of this latest cash infusion for the magically vanishing messaging app. This particular move has got everybody wondering exactly why Alibaba chose to do this, especially because Snapchat is banned in China. Yeah you read that right. Might it be a way for the Chinese company, who had the biggest-ever US IPO, tap into overseas markets? Some experts think that might be the case. Or perhaps it has something to do with Alibaba’s lack of success with a messaging app? After all, Snapchat boasts 100 million users that send out 700 million vanishing messages…a day. Incidentally, Tencent, Alibaba’s biggest rival in China, also invested in Snapchat back in 2013. But after all, what’s $200 million to Alibaba, a company that already sees annual revenues of $11 billion.

Who? Me?

Image courtesy of  Sira Anamwong/FreeDigitalPhotos.net

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Lumber Liquidators stands by its products and adamantly rejects a recent “60 Minutes” report that its flooring contains high level of formaldehyde. To prove it, they’ll even pay to have questionable floors tested. Apparently the test kits are the same ones used by the Federal government, though what significance that has is something I cannot answer. Even though Lumber Liquidators calls the report “sensationalized” with  “little context,” when its products were tested by “60 Minutes,” some of the flooring did, in fact, not meet California’s standards of acceptable levels of formaldehyde. However, once again, Lumber Liquidators rejects that claim. Same store sales, by the way, plunged 13% in the nine days after the report aired. If a consumer purchased flooring that, when tested, indicates the presence of high levels of formaldehyde, Lumber Liquidators has allegedly offered to pay…for more testing. And if that further testing indicates, once again, high levels of formaldehyde, Lumber Liquidators has allegedly agreed to eat the cost for new flooring. Imagine that. Lumber Liquidators, interestingly enough, has plans in place to open about 30 new stores. These new stores will presumably not be stocked with formaldehyde-laced flooring. And while shares of the company are still down from what they were before the piece aired, they actually did rebound a bit in light of all its efforts to counter the report.

It’s All About the Bonus; Colorado’s State Budget Gone to Pot; Vera Bradley’s Headed Overseas

Fat cats…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Good news, that is, if you work on Wall Street. According to new data from New York State Comptroller Thomas DiNapoli, bonuses are up 3% in broker-dealer firms. Those bonuses managed to increase even though profits at most Wall Street firms took major hits. Together, all those lucky bonus takers took home (or are expected to take home) a very grand total of $28.5 billion, with the average earner scoring $172,860. They might have even taken home more but all those legal settlements stemming from the firms’ pernicious little roles in the 2008 fiscal crisis managed to put a crimp in profits. The securities industry also added 2,300 jobs, presumably ones that come with bonuses too. Has your jaw hit the floor yet?  Even all those pesky new regulatory changes couldn’t stop those bonuses from rising. So why exactly might this information make the New York State comptroller so giddy? Because Wall Street accounts for 19% of New York State’s revenue and when the tide is high, all boats rise.

Speaking of bonuses…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

The amount of money that keeps pouring into Colorado’s state budget from marijuana sales just keeps getting…higher. No matter how you feel about legalizing recreational marijuana, there’s no denying its fiscal benefits. Sales of cannabis have helped the state rake in close to $9 million…just in the month of January. That was a whopping 163% increase over January of 2014. First, there is a a fee imposed on businesses that sell marijuana. All those businesses paid about $1 million in fees just for the privilege of selling the stuff. In sales tax receipts alone the state took in $3.5 million on a 10% sales tax for recreational pot. Colorado also puts a 15% excise tax on the stuff with funds from that going toward school improvement projects. There is a joke in there somewhere but I’ll stay away from it.

Just not that into you…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Handbag and accessories maker Vera Bradley took a nasty 16% hit on its stock today as it announced its abysmal fourth quarter earnings. Revenue fell 3% from a year ago to $157 million. But its that 13% drop in its net income, falling to $17.3 million, that is leaving a nasty mark. Blaming it on the fact that Vera Bradley can’t seem to attract new customers, CEO Robert Wallstrom said “overall business trends remain difficult.” Well, for Vera Bradley, anyway.  Not only is the company closing up shop on its New Haven, Indiana plant where 250 people will be left without a job, but Vera Bradley will now take the necessarily evil step of manufacturing its products overseas, since it’s apparently 90% cheaper to do so.  The company, started in 1982, went public in 2010 at $16 a share. After hitting a high of close to $50, back in 2011, the stock has been taking a vicious little dive, hitting all-time lows. All this comes two weeks after Vera Bradley named Olympic gold medalist Meryl Davis as its celebrity ambassador.

Uber Revs Up for a Big U.N. Campaign; Credit Suisse Says Auf Wiedersehen to CEO; Barnes and Noble Books Not Terrible Earnings

Put the pedal to the metal…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Über is stepping on the p.r. gas and teaming up with U.N. Women for a big campaign. There is probably a joke in there somewhere about irony but I’ll let you come up with it. In honor of the twenty year anniversary of the Beijing Declaration – a provision promising global gender equality – Über wants to help foster and facilitate economic growth for women through the “Step It Up For Gender Equality” program. The idea is to employ 1 million women as Über drivers by 2020. But here’s the tricky part: Both Über and U.N. Women need to be present in a region. U.N. Women is only present in 48 countries while Über is allowed to operate in 55 countries, and the two don’t always coincide. Sadly, Über is more globally successful than gender equality. But that’s for another blog. Of course, it’s also hard to ignore all the scandals and issues Über has been having with not just female passengers who have been victims of violent drivers, but female drivers who have been harassed by passengers, as well. Currently, 14% of Über’s 160,000 drivers are women. This latest initiative, though no doubt noble and sincere, tends to also suggest that Über’s got some major fiscal growth plans up its tailpipe – continuing to intrigue investors who can’t seem to stop throwing billions of dollars Über’s way.

Nein…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Credit Suisse CEO Brady Dougan has announced he will be leaving the Swiss bank in June and giving the position over to Prudential’s Tidjane Thiam. Dougan, who had been at the post since 2007, said the decision to leave was mutual. Of course it was. For a while investors had wanted Dougan to cut back on the investment arm, but the CEO resisted. His resistance did not pay off. Combine that with the $2.5 billion Credit Suisse had to pay U.S.authorities for helping its clients evade taxes and, well, here we are today, discussing Dougan’s resignation. As the first American selected to be CEO of Credit Suisse, the Swiss media just wasn’t that into him from the start. His loyalty was questioned and he took heat for his pay packages. Also, Dougan doesn’t speak German, which apparently didn’t sit well the Swiss media either (and presumably, many many others). News of the impending change sent the stock climbing.

 Book it….

Image courtesy of adamr/FreeDigitalPhotos.net

Image courtesy of adamr/FreeDigitalPhotos.net

Barnes & Noble’s quarterly results are in and the word is that revenue is down 1.7%  to $1.96 billion. This ought to surprise no one. And if it does surprise you then I have one word for you: Nook. The e-reader has been nothing but a giant money pit for the bookseller even with Samsung trying to come to its rescue by putting out the first new tablet for Nook in two years. What ought to surprise everyone is that B&N didn’t do nearly as bad as many thought it would all because of books. And toys. But definitely books. Actual books printed on (hopefully) recycled paper. I kid you not. It helped B&N rake in 93 cents per share in profits and helped store sales increase by 1.7%. Sure it wasn’t the forecasted $1.23 per share, but hey, Barnes & Noble will take it. Also, college books proved to be a big help in the fight against horribly missed earnings, with revenue coming in 7.2% higher. Barnes & Noble has plans to spin spin off its college books division in the summer. And now, instead of closing 20 stores this year, Barnes & Noble only plans to close 13 stores.

Not-So-Happy Meals; To Your Credit: Reporting Agencies (Finally) Agree to Play Nice; Ethical Corn Flakes

Just not that into you…

Image courtesy of joephotostudio/FreeDigitalPhotos.net

Image courtesy of joephotostudio/FreeDigitalPhotos.net

Looks like things keep going south for the Golden Arches. McDonald’s, the world’s largest food chain and private employer, took a major hit with global sales tanking 1.7%.  Since it’s only CEO’s Steve Easterbrook’s second week on the job, no one is blaming him…yet.  While the chain’s 36,000 restaurants took a hit as whole, in Europe, sales actually went up 0.7%….for the month. Too bad things in Japan things were precipitously worse, as McDonald’s took a $186 million loss for 2014. Apparently diners there didn’t appreciate finding things in their food that weren’t supposed to be in food. China and other parts of Asia also dealt with problems, including shifty meat suppliers. McDonald’s mentioned that “consumer needs and preferences have changed” and then there’s that issue of “ongoing aggressive competitive activity.” Which is basically saying that people would rather eat someplace else, like at Panera and Chipotle, which have certainly taken big bites from McDonald’s sales. But in an effort to pump some fiscal juice back into its portfolio, customers at some 2,000 locations will get to customize their own burgers with its “Create Your Taste” program. Now if only there was a “Create Better Sales” program…

A debt of gratitude…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

It all started with an investigation back in 2012 by New York Attorney General Eric Schneiderman. Actually it all started way before that when credit reporting agencies decided to make life difficult on consumers by making them jump through hoops if – heaven forbid – they had the audacity to dispute their credit reports. Following many many many complaints to the AG’s office, Schneiderman began his investigation followed by a lawsuit that led to an agreement which consumers are sure to appreciate (probably more so than the credit reporting agencies). The three biggest credit reporting agencies, also known as Experian, Equifax and TransUnion, who happen to report credit scores for a whopping 200 million Americans, have graciously agreed to behave a lot nicer and make things easier and quicker for consumers to dispute their reports. Since half of all debt reported comes from medical bills as a result of late insurance payments, the agencies will now give consumers 180 days to pay those bills. If you have other disputes, rest assured the process is about to get considerably easier. Under the new agreement, victims of fraud and identity theft should also have an easier time clearing things up. The agencies, however, were given three years to implement these new practices, so you might not want to hold your breath.

Not exactly the Oscars?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

You may have never heard of Wipro but if you’re in the market for a global information and technology consulting company, you might want to remember that name, as Wipro was just named 2015’s World’s Most Ethical Company. Every year Ethisphere Institute, a business consulting firm that focuses on best business practices, puts out its own list of “most ethical companies” with Wipro claiming the top title this year. So who else made the list? Gap Inc., H&M and Levi Strauss took home the top Ethical Prizes for “Apparel.” Hasbro and Mattel made the list for the “Toys and Games” category while Google took home the top spot for “Computer Services.”  Kellogg Co. made it onto the top five most Ethical “Food and Beverage companies for the seventh time, mind you, with The Hershey Company a few spots behind it. Petco took the number two spot for “Retail” while Starbucks Coffee Company took the top spot in the “Specialty Eateries” category. For the complete list of this year’s winners click on the link http://ethisphere.com/worlds-most-ethical/wme-honorees/

 

Nasdaq’s Getting Crafty; Costco’s Earnings Knock it Out of the Warehouse; Labor Market Laboring

How crafty…

Image courtesy of sattva/FreeDigitalPhotos.net

Image courtesy of sattva/FreeDigitalPhotos.net

Etsy is looking to join the big kids on Wall Street. The online marketplace for all things crafty is looking to score $100 million for its IPO but that number could go much much higher. Brooklyn-based, Etsy, which would trade on Nasdaq under the ticker symbol ETSY (catchy, no?) was founded in 2005 and by 2014 it pulled in $195 million in revenue, a 56% increase over the previous year. Half of that revenue, though, comes from transaction fees. Plenty of that revenue also comes from the services it sells to its sellers, which are basically, payment processing, shipping labels and promoted listings. Impressive numbers definitely, but the company is spooking investors since it also took in a $15 million net loss last year and expects its operating expenses to “increase substantially.” Yikes. So yeah, that little tidbit puts a damper on things. Etsy currently has about 1.4 million sellers with close to 20 million buyers.

Are you even surprised?

Image courtesy of photoraidz/FreeDigitalPhotos.net

Image courtesy of photoraidz/FreeDigitalPhotos.net

Costco came out with its quarterly earnings, easily topping analysts’ predictions and if that is at all shocking to you then clearly you have never stepped foot inside one of its 671 warehouses dotting the world. News of the good earnings sent shares rising today 2.5% and why shouldn’t it? The stock went up 30% during 2014 and is already up 10% this year. And while the strong dollar has been playing some nasty little fiscal tricks with its earnings, the third largest retailer still managed to nail $598 million in profit at $1.35 a share on $27.5 billion in revenue. Analysts were only expecting $1.18 on $27.65 billion in revenue. It should be duly noted that some of that profit came courtesy of a $57 million tax benefit over a special dividend from last month. But it should also be duly noted that same store sales were up 2% and sales up 8%. These earnings come on the heels of Coscto’s AmEx breakup and its new contracts with Citigroup and Visa. Now it even has plans to sell a Kirkland Signature Chevrolet truck – a particularly handy vehicle for your average Costco run.

LinkedOut…

Image courtesy of  winnond/FreeDigitalPhotos.net

Image courtesy of winnond/FreeDigitalPhotos.net

For some not-so-pleasant news on the labor market we look no further than the Labor Department who just shared with us that the number of people seeking jobless claims for the first time rose to a seasonally adjusted 320,000 for the week ending February 28, adding an unwitting 7,000 applicants. That leaves us with close to 2.5 million people getting jobless benefits and that’s the highest number it’s been since May. Analysts actually expected that number to fall to under 300,000. Some people might even be wondering, “Hmmm. What seems to be going on with this fickle little job market of ours?” Excellent question. Naturally weather always makes a good scapegoat for this sort of thing. But otherwise, the Labor Department couldn’t really pinpoint any one reason why that offensive number reared its ugly unwanted head once again. Last week, that number also rose instead of going back down to a cozy semi-acceptable spot below the 300,000 mark. Experts were hoping that it was just a little labor market hiccup that would correct itself by this week. It didn’t.