Jeff Bezos Hearts India; Lululemon’s Zen-tastic Earnings; Is Your CEO Listed? You Better Hope So

Next. Big. Thing…

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India is looking very flush these days as Amazon’s Jeff Bezos decided to throw $3 billion at it. That’s in addition to the $2 billion he gave the southeast Asian country back in 2014. He made this announcement at a meeting of business leaders in Washington DC that included Indian Prime Minister Narendra Modi. The reason why Bezos is showing India a lot of fiscal love is that it is Amazon’s fastest growing region, boasting 21 fulfillment centers and 45,000 employees. In other words, the e-commerce giant is banking on the “huge potential in the Indian economy.” Interestingly enough, Amazon can only sell its wares from its website through a third party, as mandated by Indian law. But that hasn’t been much of a problem for the e-tailer, who ironically, never seemed to adapt as easily to the local Chinese marketplace, and continues to struggle there and against the giant we call Alibaba. It’s worth noting that Amazon is not the only game in town, facing fierce competition from local e-commerce businesses, Flipkart and Snapdeal. But Amazon’s not sweating it since according to Morgan Stanley, it is estimated that consumers in India bought $16 billion worth of goods last year, more than $10.3 billion from the previous year. So clearly, there’s plenty of room on the Indian e-commerce playing field.

Lemonade mouth…

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Lululemon beat estimates and even raised its 2016 revenue forecast. So why is its founder and largest shareholder, Chip Wilson, in a snit? He’s probably still licking his executive wounds after being booted from his post for making stupid comments, among other short-comings. In a letter to shareholders last week, the 14.2% stakeholder ripped into the current directors because he feels that they can’t keep up the pace against other athletic apparel companies like Nike and Under Armour, to name a few. Wilson would like it very much if there was an annual election that would make the board of directors accountable for earnings results and, presumably, get him reinstated as CEO. As it stands, the current leadership, helmed by Laurent Potdevin, would probably be delighted to be held accountable for Lululemon’s latest earnings considering how well it performed. Sure, the retailer missed profits by just a penny, falling 5% to $45.3 million, yet still earning 30 cents a share. But shares are still up 27% for the year and the company had strong sales this quarter. It also found a way to control its inventory levels and, in the process, saw its revenue rise 17% to $495.5 million when analysts only thought it would pull down $487.7. So perhaps it’s time for Wilson to keep his thoughts to himself and just enjoy his burgeoning majority stake.

In case you were wondering…

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Glassdoor came out with its latest annual list, this time regaling us with the highest rated CEO’s. Bain & Company’s Bob Becheck tops the list with a 99% approval rating. Employees seemed to appreciate the support they receive from their boss, not to mention the company’s focus on professional development. And who doesn’t mind professional encouragement? But while Becheck scored the number one spot, two other CEO’s also received 99% approval ratings. So congrats to Ultimate Software’s Scott Scherr and McKinsey and Company’s Dominic Barton. Facebook’s Mark Zuckerberg kept his number 4 ranking from last year, while LinkedIn’s Jeff Weiner took fifth. Larry Page’s replacement at Google, Sundar Pichai, earned a 96% approval rating and the number seven spot, while Apple’s Tim Cook came in 8th, also with a 96% approval rating. Four women paved the way on this list, including Staffmark’s Lesa J. Francis, who took the 28th spot with a 94% approve rating, and Enterprise Holdings’ Pamela M. Nicholson, who graces the list at the number 31 spot, also with a 94% approval rating.

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Whole Foods is Going 365; Chip Wilson Squeezes Out of Lululemon; Rupert Murdoch to Step Down But Not Out

Whole-y moley…

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Image courtesy of stockimages/FreeDigitalPhotos.net

It’s going to be tough now to complain that Whole Foods is too expensive and that going organic is for those with tons of disposable income. The grocery chain is set to open up its new line of stores, “365 by Whole Foods Market,” cleverly named after its house brand. Of course, 365 will also have other brands, as it would seem a bit lofty to fill an entire store with just the one band. The chain is set to open next year and not a moment too soon. Bigger chains, like Target and Wal-Mart have figured out ways to compete with Whole Foods’ 400 stores by offering organics too, except at much lower prices. Naturally, that has been putting quite a damper on Whole Foods’ sales and that ever-elusive group of organic-minded millennials let the grocery chain know it by taking their paychecks to chains whose organic fare is considerably less expensive. But 365 is expected to bring more bang for the millennial buck – and everyone else’s.  And bonus: President of the “365” division, Jeff Turnas aims to make the shopping experience at the new store “fun and convenient.”

On a sour note…

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Image courtesy of SOMMAI/FreeDigitalPhotos.net

Looks like Lululemon founder and former CEO Chip Wilson wants to get some fiscal closure from the yoga-retailer by selling off his family’s entire 14.2% stake in the company. Considering the company posted better than expected earnings earlier in the week, it probably seems like a good time for Mr. Wilson to unload his 20.1 million shares, which are valued at about $1.2 billion. However, even with the best of companies, when an announcement is made that a considerable amount of shares are getting dumped, the stock goes south. And Lululemon was no exception, losing around 2% of its value at one point. But at least this brings a little more stability to the line as Chip Wilson’s last few quarters with Lululemon were anything but…zen.

The end of an era?

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Image courtesy of pakorn/FreeDigitalPhotos.net

The Chairman and CEO of 21st Century Fox has left the building. Well, not quite but a reorganization proposal is in the works. The 84 year old mogul, Rupert Murdoch, has finally decided to hand over the reins to his son, James Murdoch, much to the surprise of…no one. James currently reigns semi-supreme as co-chief operating officer of the company. However, since the elder Mr. Murdoch still controls a majority of the shares, he’ll still be around a’plenty. So what’s to become of older Murdoch brother, Lachlan? He’s not going far either as he will step into the role of executive co-chairman, working alongside his little bro.  As for the current co-chairman, Chase Carey, who also serves as president of 21st Century Fox, the plan is for him to step down, graciously, of course, and take on an as yet unidentified role, as part of the reorganization plan. Awkward. 

Lululemon-ade?; Sir Richard Branson’s Got Some Cool Punk Plastic for You; Campbell Soup Freshens Up

Making lemonade…

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Image courtesy of Pixomar/FreeDigitalPhotos.net

Looks like there’s something to be said for quitting…from the board that is. Since founder and former CEO Chip Wilson sort of graciously stepped down from the Lululemon board, the yoga apparel-making company seems to be turning over a new fiscal leaf. The company managed to beat the street following several quarters that had the company reeling from design-flawed see-through yoga pants, not to mention, some very un-zen-like comments from Mr. Wilson. This quarter, Lululemon pulled in revenues of $423.5 million, a nice little increase from last year’s  $418.6 million when the company seemed to be in the midst of all its issues. The company also managed to score $47.8 million in profits with 34 cents per share added, beating estimates by one cent. That profit was almost three times what Lululemon Athletica pulled down last year at this time, again, when it was dealing with all its troubles. And bonus, the company even raised its outlook predicting it will earn between $1.86 – $1.91 per share from a previously estimated from $1.85 to $1.90. In keeping with Wall Street tradition, shares of the stock went up on the news of the earnings beat.

But can I get an upgrade with it?

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Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

You may not be earning any miles with it, but it’ll definitely be the coolest item in your wallet. I am talking about Sir Richard Branson’s latest offering from Virgin Money – a credit card that features the Sex Pistols on it.  Slapping the Sex Pistols on plastic was no accident either.  It was Branson who signed the group to his label, Virgin Records, back in 1977. So clearly there’s a bias towards the band. Led by Sid Vicious and Johnny Rotten, the band was arguably one of the most influential punk rock bands – that is until they broke up a year later. The Sex Pistols seem like a good fit for a credit card that wants to market itself to consumers as a way ” to put a little bit of rebellion in their pocket.” However, to my untrained ear, that sounds like it has the words “debt” and “collections” written all over it. But hey, whatever works. Bonus: if your card gets declined, imagine how cool you’ll look as you embarrassingly sneak the card back into your wallet. Okay, maybe not.

Is it mmm mmm good?

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Image courtesy of tiramisustudio/FreeDigitalPhotos.net

Campbell Soup may indeed be “good food” but apparently hummus and salsa is even better these days. The iconic soup maker announced plans to buy fresh food company Garden Fresh Gourmet for $231 million. Garden Fresh Gourmet scored $100 million in sales for 2014 so clearly there’s something to be said for fresher fare. Campbell Soup,which also owns Prego sauces and Pepperidge Farm cookies, has been noticing, fiscally speaking, that consumers aren’t as interested in its canned soups and other offerings that sport a lengthy shelf life. So it’s been trying to shift gears towards trendier, money-earning items like fresh(er) food and the ever popular organic category. Of course, the company is also hoping it will reel in that ever elusive group we call millennials who seem to be dictating many food trends in the last few years.

Obama Plans, Republicans Laugh; Lululemon Not Sour that Chip Wilson’s Out; Meg Whitman’s Salary Goes Up While HP Headcount Goes Down

Dude, where’s my iPad?

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Obama may not be getting his complimentary iPad any time soon. Plans for his ambitious $4 trillion budget have been unveiled, much to the chagrin of everyone, but especially the tech titans of Silicon Valley. Obama’s plan, he says, is “designed to bring middle class economics into the 21st century.” Aw. Sweet. But to do that, Obama’s plan requires higher taxes on the wealthy, but hey, screw the wealthy, right? This $4 trillion plan calls for all sorts of nifty tax credits and education initiatives, child care, paid leave, and even a $478 billion public works program. Why, even the Pentagon gets about $534 billion. This pricey little plan would also smack a one-time 14% tax on off-shore earnings in addition to a 19% tax on future off shore corporate earnings. So where does Silicon Valley come in? Some of the money Obama would like to use to finance his little project would come from his tech friends and their overseas earnings. About $2 trillion in foreign earnings are currently wafting happily along all over the world, carefully avoiding Uncle Sam’s coffers and the President’s eager to get his claws on them through these taxes. Companies like Apple, Google, Microsoft and Pfizer would lose a bunch cash – in some cases roughly $10 billion – if Obama gets his way.  But he probably won’t because Republicans are not down with his plan, and since they control the House and the Senate, it’s safe to say they’ll do their very best from letting it become reality.

Lemonade…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Alas, the unfiltered founder of Lululemon Athletica, Chip Wilson, has finally thrown in his see-through Yoga towel and resigned as board member of the apparel company, much to the delight of…well…probably everyone. Perhaps it was the lasting effects of his unappreciated comments about how Lululemon Athletica’s apparel was not suited for women who had a little more…shall we say, bass. Perhaps it was the ongoing jokes about the accidental see-through yoga pants, (again, blaming a more full-figured clientele) and other design flaws in the pricey yoga wear that finally did him in. Or perhaps it is true that the man who founded the brand back in 1998, and saw it grow into over 250 stores all over the world, really is stepping down so that he can devote more time to the new luxury line he founded, Kit & Ace. Wilson won’t be completely out of the picture as he still owns 7.8% of the company with about a $650 million value attached to that. Now if he could just learn to think before he speaks…

What’s in a number?

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Image courtesy of nongpimmy/FreeDigitalPhotos.net

Just because 15,500 Hewlett-Packard employees lost their jobs this past year does not mean that Chairman and CEO Meg Whitman shouldn’t get an 11% compensation raise. I mean helloooo? The fact that HP’s earnings and revenues are also down, compared with last year’s numbers, should also have no bearing on Meg Whitman’s pay going up from $17.6 million to $19.6 million. Of course, that pay includes her salary, stock options and other benefits – hmm, I’m sensing a private jet and maybe even health insurance. Those 15,500 people really needed to go if HP’s much-touted five-year “turn-around plan” is going to work. Part of that turn-around will split HP into two separate publicly traded companies, HP Enterprise and HP Inc. Thankfully, Whitman’s paycheck was not affected by this “turn-around plan.” Phew. To be fair, Ms. Whitman only received a measly one dollar salary back in 2012 – and over fifteen million measly dollars in compensation, as well. The board over at HP feels her efforts are, in fact, paying off and she deserves all that (and more), especially when you consider that HP stock is up around 38% this year.

Is the Banking Industry About to Get Turned on its Fiscal Head?; Lululemon Posts Some Zen Earnings; Noah’s Ark is in Park;

Want to join the “Club?”

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Image courtesy of nuchylee/FreeDigitalPhotos.net

It’s time to welcome New York Stock Exchange’s latest IPO darling, Lending Club, trading under the ticker symbol LC (catchy, huh?). The banking industry, however, might not be giving it the warm reception that the rest of Wall Street will be showing it. The Lending Club, whose stock price had been set at $15 per share (and is trading at $23.79 as I write this), sets people up, but not quite like Tinder or match.com. The Lending Club matches borrowers with lenders of money. Founded in 2006 by Renaud Laplanche, Lending Club set out to make borrowing cheaper…and easier, than traditional banks and lending institutions. How very considerate.  Lending Club gets a fee per loan transaction and a  loan transaction can be for as little as $25.00. But with $6 billion in loans, thus far, the loan transactions probably tend to be a bit higher. The company is being watched by the alternative lending industry – and banks, no doubt – because if Lending Club does well – or not, it could indicate success – or failure – for other companies with similar models.

Assume warrior position…

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Image courtesy of jesadaphorn/FreeDigitalPhotos.net

See-through yoga pants be damned. It seems design flaws and a fallout with Lulelemon Athletica Inc. founder Chip Wilson could not stop the yoga wear maker from kicking some analyst estimate bootie. Profits for the company came in at close to $60.5 million and $0.42 per share. Online sales were up 27%, as well. Analysts had the company pegged for $0.38 per share. Still, it’s hard to overlook the fact that those numbers were down 8.5% from a year ago when the retailer posted $66 million in profits and $0.45 per share. So it must be a good thing then that the company has big plans to outfit men all over the world in its athletic gear. In fact, Lulelemon hears a $1 billion opportunity knocking with that idea. That’s probably why it opened its first men’s store in New York City last month.  Namaste.

Get your raincoats…

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Image courtesy of njaj/FreeDigitalPhotos.net

It seems  state funds have dried up for the Kentuck-based Noah’s Ark Encounter, as the $18 million in tax breaks and government funding was just yanked from the folks who are attempting to bring that famous biblical episode to life. The museum, which will be located  conveniently next to the “Creation Museum,” will boast a 500 foot recreation of the famous wooden ark, taking into account the measurements specified in the book of Genesis. However, the reason for the fund-yanking is the company behind the museum, a non-profit subsidiary of Answers in Genesis, plans on hiring based on religion. Meaning if you’re not religious enough, you need not apply – a veritable problem if you are looking to get state funds for a tourist attraction. Naturally, like any money-centered deal that goes south, legal options are being explored by the Creation Museum group with a billboard campaign in Kentucky and…New York (go figure) to counter criticism. In the meantime you can check out the 700,000 square foot Creation Museum, which has attracted some one million visitors since it opened its pearly gates back in 2007.

Wall Street Is Sour On Lulu, Phil Mickelson In the Clear and Sale Away

Namistakes…

Image courtesy of Master isolated images/FreeDigitalPhotos.net

Image courtesy of Master isolated images/FreeDigitalPhotos.net

Shares of Lululemon (LULU) went sour today after the company announced its quarterly earnings. While the athletic apparel company barely beat Wall Street’s predictions by $0.02 a share, its profits fell to a very un-zen $19 million from over $47 million a year ago. Its see-through yoga pants debacle certainly helped bring in those awful numbers. But it wouldn’t be right not to mention and wonder if some of these earnings come courtesy of Lululemon’s founder (no longer, chairman) and biggest shareholder Chip Wilson. Wilson idiotically remarked that heavy – and even not so heavy women – should steer clear of his company’s merchandise. An ignorant statement like that – see-through yoga pants or not – ought to help destroy a company’s earnings. Besides that, the company is staring at some fierce competition from Gap’s Athleta brand and Under Armour. Shares of the company went downward dog by 35% in the past twelve months.

SEC no longer teed off at Phil?

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Image courtesy of Naypong/FreeDigitalPhotos.net

Pro-golfer Phil Mickelson is happily teeing off now that SEC is pulling back from its investigation into whether he might have been involved in insider trading. Apparently the eleventh ranked golfer in the world wasn’t buying Clorox, shares of it that is, while billionaire Carl Icahn was planning to buy the company. However, the Feds are still curious about some “well-timed trades” by Mickelson and his buddy, pro-gambler Billy Walters back in 2012. While Phil Mickelson scored a million bucks on those trades, Walters allegedly notched a whopping $15 million on shares of Dean Foods.

Where o’ where does the economy stand?

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Image courtesy of jscreationzs/FreeDigitalPhotos.net

The economy once again is toying with our emotions as it continues to pull in numbers with very mixed messages. The good news is that retail increased. The bad news is that it didn’t increase enough gaining only by 0.3% instead of the 0.6% predicted (and hoped for) by some supremely intelligent economists. Then there’s our fickle little job market. The good news: In May we say 217,000 jobs added. It’s been five years since the country has seen monthly job growth of over 200,000 per month. Yippee, right? No because the bad news: The number of people filing for unemployment went up to 317,000 last week. However, that number is still less than the yearly average so a slight yippee can be uttered. Then there’s the issue of wage growth. The issue being that wages aren’t doing that much growing.