H&M Goes Haute on Profits; Google-gratulations; Taco Bell Gets Biscuit-y

So trendy…

Image courtesy of sscreations/FreeDigitalPhotos.net

Image courtesy of sscreations/FreeDigitalPhotos.net

H&M posted some particularly impressive digits with profits up 36% to about $423 million. Of course, since it’s a Swedish company, those numbers came out to 3.61 billion kronors. I’m guessing analysts don’t do a lot of shopping at the world’s second largest retailer because they only expected 3.32 billion kronors. H&M attributes a lot of that success to some major online and store expansion activity. Whatever it was, it worked.  But here’s where things got dicey. Shares of the company fell over 3% because of one not so teeny tiny problem: Revenue for the first three weeks of March slowed to 9% from February’s 15%. This put a damper on the profit surge news. However, one analyst graciously pointed out that it was the first time in 17 months that growth even slowed to under 10%. So no one’s too concerned. It wouldn’t be right not to blame some of that on a winter that has overstayed its welcome. However, that strong dollar of ours is also going to be messing with H&M too, as it’s going to get a lot pricier to purchase goods and services to put out all those fabulously trendy and cheap clothes. Then there’s the not so minor issue that so much of its merchandise is purchased in dollars even though its sold in Euros. That might put a fiscal crimp on things, as well. Strong dollar or weak euro, H&M still has plans to open 400 stores worldwide.

Googled it…

Image courtesy of Stuart Miles/FreeDgitalPhotos.net

Image courtesy of Stuart Miles/FreeDgitalPhotos.net

Ruth Porat. Remember that name. That is, if you didn’t already, as she is regarded as one of the “most powerful women on Wall Street.” Except she’s ditching Wall Street for a new gig in Silicon Valley as Google’s new CFO. Just how big a deal is it? Well, Wall Street liked the appointment so much that Google’s stock went up almost 3% today because of it. Yeah, she’s that impressive. Ms. Porat has been at Morgan Stanley for 28 years but is no stranger to tech having worked on some major deals for both Amazon and eBay. During 2008’s nasty fiscal crisis, she advised the U.S. Department of Treasury on AIG, Freddie Mac and Fannie Mae.  She was even under consideration for the role of Deputy Treasury Secretary. Not too shabby. She’ll be replacing Patrick Pichette who said he’s retiring to spend more time with his family. So friggin’ sweet.  Ms. Porat gets to report to Google co-founder and CEO, Larry Page, who is presumably just as stoked about his new hire as Wall Street is.

Would you like that to go?

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

Is it a taco? Or is it a biscuit. Excellent question and for Taco Bell, whatever you decide probably won’t matter as long as you buy the darn thing. The fast-food chain is heating up the breakfast wars, yet again, armed with its latest weaponry – the taco biscuit, a biscuit in the shape of a taco. Got that? Last year Taco Bell took an advertising swing at McDonald’s with a campaign featuring people whose names were actually Ronald McDonald, devouring a Taco Bell breakfast and loving it. While it’s no doubt that McDonald’s did not care for this little shtick, the fact is that breakfast at the Golden Arches still accounts for 25% of McDonald’s sales when Taco Bell only sees 6% of its sales going towards the most important meal of the day (so they say).  Since traffic has been going up at fast-food establishments for the last four years, does the Taco Biscuit have what it takes to propel Taco Bell and its 6,000 U.S. establishments to hit its goal of seeing 20% of sales coming from breakfast? Time will tell, o’ fearless breakfast diner.

Delia*s Final Chapter;New Mortgage Nirvana Thanks to Fannie Mae and Freddie Mac; Frech Toast Crunch Epic-y Comeback

Down and out…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Delia*s is joining the ranks of the bankruptcy protected now that it has officially filed for Chapter 11. While several of Delia*s teen apparel cohorts, including Abercrombie & Fitch and Urban Outfitters, are merely posting very unfashionable earnings, Delia*s will be getting $20 million just to help liquidate and close down its stores. The retailer, to which bright-eyed teenagers once flocked, can no longer compete with the H&M’s and Forever 21’s of the world. And don’t even get me started on competing with the behemoth that is Amazon. The New York-based chain has 92 stores scattered in malls across the country. With $74 million in assets and over $32 million in debt, its no wonder that Delia*s CEO Tracy Gardner and COO Brian Lex Austin-Gemas resigned. It’s probably safe to say that no one is mourning their departure – well, except maybe for them.

It’s baaaaaaaack…

Image courtesy of foto76/FreeDigitalPhotos.net

Image courtesy of foto76/FreeDigitalPhotos.net

Justin Timberlake brought sexy back so its only fair that General Mills is bringing back French Toast Crunch. Yes, my fellow cereal aficionados, the dark days are behind us as the maker of Cheerios, Yoplait and Progresso Soups has finally found the wherewithal to bring us back our French Toast Crunch. The sister cereal to the ubiquitous and oft-loved Cinnamon Toast Crunch has been absent from grocery shelves in the United States for almost a decade – I shutter to think. With the invasion of Greek yogurt and fast-food wars breaking out, the cereal was unceremoniously discontinued as other alternatives shoved their way onto the breakfast scene. But consumer demand brought General Mills to its corporate knees, together with an online petition and a Facebook page dedicated to resurrecting the sweet, breakfast sesnation. Besides, General Mills figures those kids who group in the nineties downing French Toast Crunch are now at that age where they are paying for their own cereal now (at least they should be) and can buy it themselves (at least they should be).

3% down with that?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

There are some very lucky soon-to-be first-time homeowners milling about thanks to Fannie Mae and Freddie Mac. New terms established by the companies are allowing applicants to put up just 3% down payment to get them into a new home. That’s down from 5%, fyi. Fannie Mae is starting to offer that deal December 13. Looking to refinance? How does reducing your equity to 3% sound? If you haven’t owned a home in three years, guess what? You still qualify.  Starting in March, Freddie Mac will let lower-income first-time home-buyers hand over a 3% down payment provided they agree to housing counseling. Melvin Watt, head of the Federal Housing Finance Agency and the dude who oversees Freddie Mac and Fannie Mae, wants to spur lending to minorities and young adults because the lenders have made more stringent standards following the crash, and the tens of billion of dollars they had to pay towards lawsuits for underwriting less than ideal loans. Republicans, however, are not digging the idea, finding the whole thing too risky and eerily reminiscent of the policies that led up to that awful crash – from which the country is still not fully recovered.

 

 

Zynga Zinger, Supreme Cyber Smackdown and Fannie Mae is Back on Top

Game over?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Zynga took a nasty little hit to its second quarter earnings by barely breaking even. And that’s being generous. While Wall Street was hoping to see revenue of $157 million, the San Francisco-based gaming company, currently notable for “Farmville,” took in $153 million in revenue with a $.07 per share loss. Ah! But what is a mere $.07 in the grand scheme of things, you might be wondering? Well that grand scheme adds up to a $62.5 million loss. Last year at this time the company’s loss was but a mere $15.8 million. However, there is hope on the mobile horizon, or so Zynga feels, as “Farmville 2: Country Escape” has become an Editor’s Choice in the Apple App store – a very significant barometer of what makes a game successful. Then there are those handy licensing deals with the NFL and Tiger Woods, among others, that Zynga is counting on to turn those earnings in the up direction.

E-commerce competition!

Image courtesy of cooldesign/FreeDigitalPhotos.net

Image courtesy of cooldesign/FreeDigitalPhotos.net

It’s about to get a whole lot nastier – but luckily, not for consumers – in cyberspace thanks to the nifty new alliance that was forged between Barnes & Noble and Google. Yes. I did write Google – well Google Shopping Express, to be more precise. The two companies have teamed up to provide a little competition to Amazon. But that’s not in the official statement, of course. The partnership, which should give a much needed boost to the bookseller, will provide same-day delivery in certain areas, just like rival Amazon. After all the trouble Amazon caused for book publisher Hachette, this new deal probably couldn’t have come at a better time as consumers are feeling a little less affectionate towards the e-commerce giant. Google Shopping Express has already teamed up with major retailers like Target and Costco. By the way, you can subscribe to Google Shopping Express free for the first six months, with a subscription fee to be determined at the end of that time. Or you could just plunk down $4.99 per order. Happy shopping!

Pay it backwards…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Fannie Mae, who once upon a time had to hit up taxpayers to the tune of $116 billion at the height of the financial crisis is about to have paid us all back in full. Sort of. The mortgage lending company just reported its tenth straight profitable quarter – $3.7 billion in profits, in fact.  And a check for that amount is in the mail…to the US Treasury. After the Treasury cashes that out, Fannie Mae can take a breather as it will have more than fully repaid its debt. And while that $3.7 billion profit might seem impressive, that figure is actually a 63% decrease over the same period last year, where Fannie Mae pulled in over $10 billion in profit.  Incidentally, Fannie Mae earned $84 billion in 2013. Not bad for a year’s work, huh?

 

 

Facebook Would Like to Like China, Coca Cola Getting Buzzed Over Keurig and Extra Credit Mortgages

Facebook headed in new directions?

Image courtesy of Master isolated images/FreeDigitalPhotos.net

Image courtesy of Master isolated images/FreeDigitalPhotos.net

Facebook is headed east. At least it wants to head east. Far east. The social media giant is looking to set up shop in Beijing but there is one slight hitch – Facebook is currently censored in China and has been for the past several years (as are Google and Twitter). Minor details, I suppose. Interestingly enough, though, Facebook still managed to make more than a few bucks in China by selling ads. The country currently has the largest amount of web users, coming in at a mind-numbing 600 million, yet it remains one of the last big markets that doesn’t enjoy all those FB perks. And while Facebook would be all too eager to tap in to that population, it did diplomatically say there are “substantial legal and regulatory complexities.” But tons of companies in China also want Facebook for the opportunities it provides to reach international users. Despite China’s Facebook ban, the company still managed to make $354 million in Asia which translated to roughly 19% of its first quarter revenue.

The buzz at Coca Cola…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

As more and more people are looking to kick sodas from their diets, Coca Cola (KO) figured now is the time to up its stake in Keurig Green Mountain (GMCR) from 10% to 16%. Because the soda company recognized “substantial growth potential” it went ahead and scooped up close to 26 million shares. Now the beverage company best known for its tasty assortment of soft drinks has now became the largest shareholder in a company best known for its coffee and single cup brewing system. Coca Cola has used this play in the past when it ultimately bought out entire companies, including Zico Coconut Water and Honest Tea. In keeping with the spirit of icy cold Coca Cola, Keurig is planning to introduce a frosty single cup drink.

To your credit…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Government-owned Freddie Mac (FMCC) and Fannie Mae (FNMA) once upon a time received a $187 billion bailout courtesy of taxpayers. Freddie and Fannie are actually now cranking out record profits for the US treasury, having paid back all that taxpayer money (not that I saw any of it in my bank account). Now the Federal Housing Finance Agency (FHFA) overseeing the two companies (who guarantee about half of all mortgages) want potential homeowners/borrowers to get more credit. A far cry from last year when FHFA wanted to instead reduce the credit Freddie and Fannie (as those in the know call them) were offering. A move like that could drastically harm the housing finance market so the plans were scrapped. Now even if a borrower skips two payments in the first three years of the loan, Freddie and Fannie will still back those loans. There is now also a foreclosure relief project in the wings. However, the Senate Banking Committee is voting on a bill – with bi-partisan support – that would phase out Freddie and Fannie and let private lenders assume the risk instead.