Russia? What About Russia? Facebook Earnings Seem to Be So Much Bigger Than Russia; Major Chink in Under Armour; All Night Long: It’s Party Time at Walmart

It’s good to be Facebook…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

It’s another quarter of rainbows and unicorns for Facebook CEO Mark Zuckerberg. The social media mega-monster blew expectations out of the water with its daily active users growing to almost 1.4 billion, an increase of 50 million users. Revenue increased 47% and came in at over $10 billion. I won’t even bother boring you with what analysts expected. In the meantime, shares picked up an additional $1.59, which was a swift kick in the rear to predictions of $1.28 per share and a majorly impressive 77% increase over last year at this time. Apparently, all this talk about Russia using propaganda on Facebook to influence the presidential election seems to be having a nominal effect on the company.  Amid all this glorious earnings news, Facebook’s general counsel was hanging out in our nation’s capital, taking a beating because some folks in Congress just aren’t down with the way Facebook has this uncanny knack for effectively targeting digital ads to users simply based on their likes. I guess politicians are worried that those targeted ads might be – and have been – too effective in getting their opponents elected.  But Wall Street just laughed away sending shares all the way up to almost $183 per share.

Over Armour?

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Image courtesy of James Barker/FreeDigitalPhotos.net

Under Armour released its quarterly profits and it seemed like there was carnage all around.  The big bad ugly issue, aside from the actual numbers, is that the company is slashing forecasts for 2017. If that’s not a fiscal kiss of death, I don’t know what is. As for revenue, it fell. A lot. To about $1.4 billion, an almost 5% drop year over year. However, if we’re just looking at what happened just in the U.S., Under Armour revenue fell a whopping 12%. That’s a huge problem because it was the first time that ever happened since the company made its super-hyped Wall Street debut. Of course, you can’t have bad news on Wall Street without shares of the company in question going south. Which is precisely what happened as shares of Under Armour tanked 24% today. Add that to the fact that since September of 2015, shares have fallen around 85%. The carnage, unfortunately, doesn’t end there. Profit was down to just over $54 million and 12 cents per share, which was about half of what it was last year at this time. To add insult to injury, expectations were for $75 million. Of course, some would say those dismal figures are partly the result of the company’s $85 million restructuring charge. But I guess that’s the kind of money you have to spend when you are trying to keep a multi-billion dollar company like Under Armour from hemorrhaging more money. And true to CEO fashion, Under Armour’s own Kevin Plank made sure to blame, among other factors, businesses that went bankrupt since those other businesses, like sporting good stores, sold Under Armour merchandise. The bad news seemed to be contagious as shares of both Nike and Adidas took a nasty dip as well.

Par-tay!!!!!

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Walmart wants to win the holidays. And it’s training hardcore for the finish. Sure, that means sales. And promos. And all the rest of the gimmicks and sales. But Walmart’s also throwing in some partying. I’m totes serious here.  Starting this Saturday, Walmart will hold 20,000 parties in its Super Centers with the first one being called, “Toys that Rock.” Not to be outdone by toys, the retailer will also have parties called “Gifts that Rock” and “Parties that Rock.” Are you sensing a theme here? Of course, no party is complete without a decent goody bag or giveaway, so for you, the shopper, that means a curated gift guide and catalog. See how nicely that works out for Walmart. And you, maybe. Sort of. Walmart is also adding lots more “holiday helpers” to help guide shoppers to cashiers, open more registers and grab things from all over the store…and beyond. And demos, We mustn’t forget the demos. Apparently, there will be 165,000 of them spread all through Walmart’s gazillion stores. Laugh all you want, but Wall Street’s digging Walmart’s latest initiatives and overall drive, sending shares of the company up today by almost 1%.

Trump-y’s Bumpy Budget Plans; McDonald’s Unknowingly Picks Fight with President; The Goose is Loose: Luxury Coats Hit Wall Street

Did you say…trillion?

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Image courtesy of jannoon028/FreeDigitalPhotos.net

There’s nothing like a $1.1 trillion budget proposal to perk up a Thursday. The big winner in Trump’s plan is defense, which gets a $54 billion boost if the President gets his way. Losers of the $54 billion corresponding cuts include  – but are not limited to – the Department of Housing and Urban Development and the Environmental Protection Agency – which you had to have seen a mile away. The National Endowment for the Arts, legal aid for the poor and low-income heating assistance would also be history. Because why bother helping poor people pay for heat when you can spend $1.5 billion on a down payment to build a wall along the Mexican border. Wasn’t Mexico supposed to foot the bill for that one, by the way?  In any case, the outline was described as a “hard power budget” – if you have to laugh, then g’head – by Mike Mulvaney, the President’s director of the Office of Management and Budget. In case it wasn’t painfully obvious, it means that this plan caters to defense and building up the military, while foreign aid and diplomacy can go suck it. Sort of. Naturally, the Democrats are just not that into this budget and are wondering how smart it is to cut spending in areas that work with defense to facilitate diplomacy in more volatile parts of the world. On the bright side, the plan calls for slashing funds to the United Nations. If the President could find away to turn all that pricey UN real estate into affordable housing, then we’d really be onto something. But now it’s up to Paul Ryan to get that budget passed in Congress, which is not likely, though, since rumor has it that this plan is Dead On Arrival.

Speaking of greasy of food…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

For some inexplicable reason, at 9:16 this morning,  McDonald’s official Twitter account unleashed this little gem:”@realDonaldTrump You are actually a disgusting excuse of a President and we would love to have @BarackObama back, also you have tiny hands.” Sure the message was deleted 25 minutes later but not before it was retweeted more than 600 times. Interestingly enough Trump is a mega fan of McDonald’s, and even starred in a commercial for the fast-food chain a few years ago. McDonald’s was initially mum on the incident but later said Twitter notified the company to say that its account had been compromised and the situation is currently being investigated. Incidentally, Barack Obama’s former press secretary and campaign adviser, Robert Gibbs, is McDonald’s head of communication. Not that that had anything to do with this particular tweet, mind you. However, my question is, if this Tweet boosts business, will they keep tweeting more insults to the President? Hmmm.

Warm and fuzzy…

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Image courtesy of vectorolie/FreeDigitalPhotos.net

Snapchat look out. There’s a new Wall Street darling today and its one that actually warms hearts. Literally. Luxury Canadian coat maker Canada Goose made its much anticipated New York stock market debut, with 20 million shares being unleashed to the tune of $18 a pop. Initially priced at closer to $12 a share, the apparel company came out swinging raising a very impressive $255 million and hitting a market valuation of $1.88 billion. And why shouldn’t that be the case? After all, the coat maker scored close to $300 million in revenue for 2016 with a $27 million profit, proving that people really do dig the Canadian brand. Of course, no party is complete without a few crashers and for Canada Goose it was PETA, who were there to protest Canada Goose’s use of coyote fur on some of its offerings. The animal-rights organization even purchased $4,000 worth of shares, which might seem completely at odds with its mission. However, that $4,000 investment affords PETA the opportunity to submit its own letter to shareholders and buys it admission to Canada Goose’s annual shareholder meeting, where, presumably, the organization plans to up its protest game.

 

 

Grocery Disrupt: Amazon’s Latest Venture Good Become a Store Near You; Tyson’s New Add-Venture; Trump’s Taxing Tariff Tweets

Move over, humans…

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Image courtesy of Simon Howden/FreeDigitalPhotos.net

Just when you to start to wonder what else Amazon could possibly do to disrupt and reinvent the retail shopping experience, along comes Amazon Go, an actual brick-and-mortar-store brought to you by the e-commerce giant. Talk about irony. The concept, which is still being tested by Amazon employees, allows shoppers to literally grab food and walk out. No lines. No cashiers. Customers just take their cellphones and tap them on a turnstile to get logged into the store’s network, which in turn connects to the Amazon Prime app, already conveniently installed on their phones. Customers pick items off the shelf and put them into their cart while, with the aid of sensors and artificial intelligence, the same items are also placed in virtual shopping cart. If a shopper decides that they don’t want an item, they simply place it back on the shelf and the item also disappears from the virtual cart. Like magic. Should you crave something a bit more immediate, the store also offers up fresh food, prepared on site. Once customers are done, they simply walk out while the app does all the work, which basically involves adding everything up and then charging respective Amazon accounts. The company has been on the hunt to gain a big presence in the food retail industry, an industry which still fiscally eludes it, and also happens to be one of the biggest retail industries. Ever.  Its fresh food delivery is nice and all, but Amazon’s set its sights on competing with the big grocery players like Wal-Mart, Krogers and Target. The food retailer index took a 1% dive on Amazon’s news while shares of Amazon went up. But established grocers can breathe a very brief sigh of relief easy as Amazon still has a few months before it opens up the store to the public. And humans, fear not. One tech investor said that people are still a very big, necessary component of the retail experience and to scrap the notion that jobs will be lost to machines. Phew.

Speaking of food…

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Image courtesy of KEKO64/FreeDigitalPhotos.net

What to do when you’re a $20 billion company whose prime business is chicken, beef and pork, and you keep losing money to the alternative-meat and fresh-food industry? Why, you set up a venture capital firm, of course. And that’s just what Tyson Foods did in an attempt to compete with a burgeoning industry that is literally eating into its business model. Apparently, plant-based protein and food sustainability is where it’s at these days and if you can’t beat ’em then join ’em by investing in their start-ups. Hence we have Tyson New Ventures LLC, a $150 million venture capital firm that Tyson launched to tap into a market that favors more plant-based and fresh food. The venture capital firm will look to companies that are working on making food-related “breakthroughs” and new innovative technology and business models that relate to food. Tyson already announced its first investment a few months ago, when it bought a 5% stake in Beyond Meats, a company that makes meat-like products. Tyson has got nothing to lose either, considering its last earnings report was nothing short of dismal, and the news that its long-time CEO Donnie Smith was stepping down did nothing to instill confidence in investors. Tyson isn’t the only firm to try out this venture capital idea. Other companies like Campbells Soup, Coca Cola, General Mills and Kellogg’s have all established similar firms with pretty much the same objective: to continue to be a prominent player in a shifting market and industry landscape.  So far this year venture firms have already thrown $420 million into various food and agricultural companies. In 2015 that number approached $650 million.

A day without Trump?

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Over the weekend, President-elect Donald Trump mentioned, in a series of tweets of course, that he wants to get back at U.S. companies who dare shift jobs and production overseas. His preferred revenge tactic would be in the form of a 35% tariff and, strangely enough, his fellow Republicans don’t seem to be on board. The top House Republican, House Majority Leader Kevin McCarthy, does not support Trump’s tariff idea and thinks that the best, most effective way to create and keep jobs in the U.S. is via major tax reform. There seem to be a whole bunch of issues at play with Trump’s (overly) ambitious tax-revenge plans, including the fact that such a move goes against the whole spirit of free trade and has the potential to spark trade wars. And nobody likes wars, whether they involve armed conflict or goods and services. Tax specialists and other assorted experts have also said that it’s fairly debatable as to whether or not Trump’s tactics are even legal.  Republicans are, however, partial to over-hauling the corporate tax code in an effort to keep U.S. companies from fleeing to more tax-hospitable countries. They’d like to cut that pesky corporate tax rate to 20% or less which would allow the U.S. to be more competitive globally. House Republicans are also in favor of imposing corporate taxes to all imported goods and services and scrapping them for exports. But leave it to the critics to argue that changes like that might be seen as violations of the World Trade Organization.  In any case,  it remains to be seen how exactly Trump will get his way, if he does. That’s because tariffs aren’t typically applied to specific companies but rather entire classes of goods. Besides, the president doesn’t get to make those kinds of decisions anyway. That’s for Congress to decide and Congress doesn’t seem, shall we say, receptive, to Trump’s tariff talk.

Where Has All the Farfegnugen Gone?; Amazon’s Getting Crafty With It; Lumber Liquidators Liquidating to DOJ

Have you driven a Ford lately?

Image courtesy of emptyglass/FreeDigitalPhotos.net

Image courtesy of emptyglass/FreeDigitalPhotos.net

Execs at GM must be having a very good day as the recent auto industry-related scandal has nothing to do with them. The same can’t be said of Volkswagen and its U.S. CEO, Michael Horn, who had the dubious distinction of testifying before Congress in front of the House Energy and Commerce Committee’s Oversight and Investigations Subcommittee. His testimony was basically one big long apology over his company’s “emission’s scandal.” But he also said that he truly believes that American workers did not know a thing about it. Which seems kind of weird because would you now consider buying a car from a company whose workers didn’t know what was going on with the cars they presumably work on? Just wondering. But anyways, Horn said Volkwagen would fix the approximate 500,000 affected cars. So if you happen to have one of them, don’t expect a buyback. There’s no time-frame either so don’t hold your breath as the fix could take a couple of years. Horn did say that Volkswagen would take full responsibility and that responsibility could result in an $18 billion fine. And while that seems awfully steep, even for a car company, then consider that the affected cars were emitting pollutants at a rate that was 40 times more than the acceptable U.S. standards. So boo hoo for Volkwagen.

Craft cheese…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Because e-commerce dominance just isn’t enough, Amazon is even going after the little-er guys. This time the target is recent IPO’er, Etsy, who continues its rocky relationship with Wall Street. Today, Amazon unleashed Amazon Handmade a marketplace for artisans to peddle their wares. Translate: no factories allowed. And indeed, that is one of the reasons why it distinguishes itself from Etsy and might prove to be a big lure for those artisans irritated by fellow crafters who choose to outsource their manufacturing. Amazon thinks it has way more to offer the fiscally-driven yet crafty-inspired peddler than Etsy has. A much much bigger customer base, free phone and email support and a host of other tools are just some of the benefits of being an Amazon Handmade seller. But, first you have to qualify. Again: No factories! No major manufacturing. Check out Amazon’s site If you’re really curious to see if you’ve got what it takes (or what it doesn’t) to sell your crafty goods. But know this, fearless artisan, Amazon takes a 12% cut and, starting August 2016, a $40 monthly fee if you’re industrious enough to sell more than 40 items a month. If all that doesn’t scare you away, then come join the approximately 5,000 sellers, in 60 countries, who have already begun hawking their more than 80,000 items.

Unsettling…

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Image courtesy of suphakit73/FreeDigitalPhotos.net

Lumber Liquidators has finally reached a $10 million settlement with the Department of Justice. Except, this settlement has nothing to do with the still ongoing investigations into Lumber Liquidators’ formaldehyde-laced laminate flooring scandal. That’s a whole other fairly recent mess. This settlement is from allegations stemming from 2013 where Lumber Liquidators was accused of violating the Lacey Act. This U.S. conservation law basically protects plants, fish and wildlife and forbids companies, corporations etc. from hogging more than their share of mother nature’s not-so-abundant resources. Lumber Liquidators did just that when it was busted importing more than the permitted amount of timber from foreign countries. As part of the settlement, Lumber Liquidators is on probation for 5 years and must make generous donations to conservation charities. If the company violates the terms of its probation, then its toast. Heck, the company’s already is toast. However, shares of the company went up a smidge today on the news of the settlement. Of course that increase does nothing to mask the fact that the stock is down 75% over the last year

Google’d: Big Search Engine News; How Crude: Dow Gets a Pick-me Up From Oil and Omaha; Postally Spent

If you google alphabet…

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Image courtesy of blackzheep/FreeDigitalPhotos.net

In case you missed it, there’s a new head honcho at Google. Okay, maybe not as head honcho-y as Sergey Brin and Larry Page, but Sundar Pichai just became the new CEO of Google and now holds the keys to that very magical kingdom. There is also a little bit of restructuring going on at the almighty tech company. Okay. A lot. You see, Google has now become a subsidiary of a new publicly traded company called Alphabet Inc. – which will soon be trading under that name. Brin and Page are at the top of that executive food chain and, no doubt, always will be. Pichai is no rookie, though. He’s been at Google for well over a decade and his last role was as head of Android. So he’ll probably settle into his new digs quite comfortably. Apparently, Wall Street likes the new arrangements too. Google’s stock surged 6% on the news.

Take a dow…

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Image courtesy of renjith krishnan/FreeDigitalPhotos.net

A big shout out goes to Warren Buffet today, who together with rebounding oil prices, got the dow to shake off a fiscally ugly seven day slump. First, crude finally climbed 2% to a respectable $44.74 a barrel after falling below a very unflattering $44 a barrel on Friday. Then the Oracle of Omaha reminded the world why Berkshire Hathaway is, in fact, the happiest place on earth (sorry Mickey) when his company announced a $37 billion deal to buy Precision Castparts. The company was purchased at a 20% premium, but no doubt worth every…billion. Precision Castparts took in $10 billion in sales with a $1.5 billion profit in 2014.

Going postal…

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Image courtesy of cooldesign/FreeDigitalPhotos.net

It used to be that postal workers were unstoppable in their pursuit of mail delivery. As the saying goes: “Neither snow nor rain nor heat nor gloom of night…” Noticeably absent from this list is Congress, which just might be the one thing that could put a crimp in those mail deliveries. You see, the United States Postal Service just announced its quarterly earnings. It lost $586 million. But, that was still a major improvement over last year at this time when the agency took a $1.5 billion hit. Ouch. April-June, however, typically sees lower revenues, so that figure wasn’t totally alarming. Part of the reason why USPS didn’t lose as much is because of how the interest rates that are tied into worker compensation expenses. Go interest rates! Now let’s get back to Congress. Strangely enough, even though the USPS doesn’t receive any tax dollars, the agency is still under congressional control. Under that congressional control we find the Postal Accountability and Enhancement Act. Say that five times fast. The “Act” stipulates that USPS must pay between $5.4 billion and $5.7 billion toward future retiree health benefit costs. Until 2016. Unfortunately for the USPS, there have been a lot of changes in the mail and package delivery industry and the agency is facing stiff competition, including from many start-ups. Congress has yet to acknowledge these shifting postal tides and draft new legislation that would tweak that multi-billion requirement to a more attainable fiscal goal. Until that happens…well, it’s Congress so don’t hold your breath.

Waffle House: For All Your Shipping Needs; Home Deport Improves Earnings; Fed Chairwoman Ponders Millenials

Can you expedite that waffle?  

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

What do you get when you cross a restaurant chain known for its waffles with a delivery app? Roadie, of course. Haven’t heard of it yet? That’s probably because it’s only been up and running for a few weeks. However, it’s already got $10 million worth of funding with some of that cash coming from Google’s Eric Schmidt. The app is also being touted as the “Über of shipping.” The idea, created by founder Marc Gorlin is so simple yet so genius. It matches up people who need to ship something with other people who are already driving to that location, often for much less than what the usual shipping companies charge. And just where do the waffles come in? Enter Waffle House and its 1,750 locations which will serve as the meeting points for shippers and insured drivers. The cost to ship an item  – and yes it has to be legal! – with a “Roadie” could range from $12 – $200. First time “Roadie” downloaders are eligible for a free waffle. Get a free beverage to take along with you every time you make a delivery.  While it’s only available in 25 states , primarily in the southeast, there’s no need to fret. With 7,500 downloads and counting all signs point to some major expansion plans sooner rather than later.

Where can I find nails?

Image courtesy of zole4/FreeDigitalPhotos.net

Image courtesy of zole4/FreeDigitalPhotos.net

Home Depot had a particularly fabulous fourth quarter pulling in a 36% profit. Net income came in at $1.38 billion at about a buck per share Analysts only predicted Home Depot would gain 89 cents per share. A year earlier the company gained 73 cents per share. So what gives?  It seems the retailer earned some major cash from its website and its big push to improve customer service has paid off quite nicely for the world’s largest home improvement retailer. If you are lucky enough to be one of Home Depot’s esteemed shareholders , then congrats to you as you just earned 12 cents per dividend, which is now up to 59 cents per share. The company even has big plans to buy back $18 billion in shares. In the market for some gainful employment?  You might want to check out Home Depot’s job board. The company is looking to fill 80,000 jobs for the spring, the store’s busiest season. Unfortunately, the retailer’s forecasts for the year are tinged with a bit of disappointment as it is convinced that the exchange rate and that especially robust dollar of ours is going to put a 6% ding in the stock this year.

Everyone likes a good mystery…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Fed Chairwoman Janet Yellen is taking fiscal center stage today before the Senate Banking Committee.  The Fed Chairwoman gets to enjoy two days of back to back congressional testimony where she will be grilled on a loooong list of complaints, courtesy of the Republican controlled House and Senate. Among the questions with which she will be peppered is when exactly does the Fed plan on hiking those interest rates, an answer that has been eluding the American people and its elected officials for quite some time.  Not exactly the stuff that Oscar nominated movies are made of. But on Capitol Hill that testimony could give Game of Thrones a run for its money. Ms. Yellen also wondered aloud about that mysterious lot born in the eighties and nineties, a.k.a. Millenials. The Fed Chairwoman finds them to be a bit of a mystery and is unsure how the economy is going to affect them. If that’s what she’s wondering about them then I’m guessing she doesn’t get to Chipotle very often.