Wal-Mart Misses Profits, But Who Can Blame Them?; Spotify-ing Starbucks; Urban Outfitter’s Un-Trendy Quarter

Wager on this…

Image courtesy of digitalrt/FreeDigitalPhotos.net

Image courtesy of digitalrt/FreeDigitalPhotos.net

Wal-mart took a hit on its first quarter earnings but would it be really fair to blame the world’s largest retailer? After all, that miss had a lot to do with the fact that Wal-Mart threw $1 billion towards raising employee wages and training programs.  Some might even call that profit miss noble. While Wal-Mart expects this initiative to actually lift sales in the long term, I bet management is hoping for a really short long term. Another reason not to completely blame Wal-Mart for its earnings miss is that recent Commerce Department report detailing how spending is down because would-be consumers are actually choosing to save money and pay down their debt. Of course, we also mustn’t forget to blame the strong dollar, which rumor has it, was responsible for eating a few cents per share off of Wal-Mart’s earnings, as well. The giant retailer pulled down revenue of $114 billion when analysts expected $116 billion. Even though that figure is down just .1% from last year, considering it’s Wal-Mart, that number is not as small as it seems. Analysts were hoping to see $1.05 per share earned, however, Wal-Mart only managed to score $1.03 per share on $3.34 billion. I suppose that figure sounds impressive – anything with the word “billion” usually does – except for the fact that it was a 7% drop from the $3.6 billion and the $1.11 per share it took in last year.

Deal of the day…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

CD’s are out and barista’s are in at Starbucks as the coffee chain teams up with streaming music provider Spotify. In what just might become remembered as one of the more creative business collaborations to come along in a long time, Starbucks employees – some 150,000 of them –  will be getting an unusual job perk: premium subscriptions to Spotify. The baristas will get to hone their deejaying skills by making playlists for the stores from the Starbucks music that has been wafting through the coffeehouses, together with the smell of espresso beans, for the last twenty years. So where’s does the money part come in? Starbuck’s promotes Spotify’s premium service, which can be yours for $9.99 per month. (the company already has 60 million users), while the playlists from Starbucks’ 7,000 locales will be conveniently accessible to those premium subscribers from Starbucks’ own mobile app. Then, as an added bonus, Spotify users can earn “stars” from the Starbucks reward program, of which there are 10 million members. I mean, can it get any better, well, for Starbucks and Spotify anyway?


Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

There’s nothing trendy about lousy earnings. Urban Outfitters and Anthropologie can attest to that as the apparel companies took a hit in their latest earnings report. In fact, it was Anthropologie’s worst quarter in more than two years as sales of the brand were only up by a paltry 1%. Sales for the company, as a whole, were only up 3.8% at over $311 million. Even though same store sales were up 4%, analysts predicted growth of 5.3%. So that was nothing short of disappointment at its peak. Revenue was also up, but only by 8% to $740 million. But it was the company’s net income that had everybody aghast. Urban Outfitters took a 12.5% beating on its profits coming in at $32.8 million and earning just 25 cents per share. Analysts were pulling for 30 cents per share on revenue of $758 million. Fiscal rumor has it that the clothing company can’t seem to get a fashionable leg up on the faster fashion companies of H&M, Zara and Forever 21. Whatever the reason, here’s wishing them a better second fiscal quarter.

One response to “Wal-Mart Misses Profits, But Who Can Blame Them?; Spotify-ing Starbucks; Urban Outfitter’s Un-Trendy Quarter

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