France Says Non Vive La Uber; Smuckers Jells Up Some Tasty Earnings; Is Larry Page Channeling George Jetson?

Let them eat cake…

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Uber, the multi-billion dollar company that operates in 60 countries and can’t seem to stay out of legal trouble is making headlines, yet again. The ride-sharing app just got slapped with an almost million dollar fine – half of which was suspended – for running an illegal taxi service in France. But that fine is the least of Uber’s problems considering it just raised another $3.5 billion in funding. The French court took aim at Uber POP, an app that connects riders with nonprofessional drivers who use their own cars to transport passengers. Licensed taxi drivers in France took exception to the app and put pressure on French officials to bid adieu to Uber POP by getting the service suspended there last year. Last week, a German court also gave a big nein to Uber, upholding a previous ruling that banned Uber POP there for violating local transport laws. Besides Uber getting slapped with a big fine, two Uber execs also got hit to the tune of 50,000 euros, which is nothing compared to the five years of jail time and million dollar fine that they could have received. This case marks the first time that actual executives from the company had to stand trial. The employees were found guilty of deceptive commercial practices, acting as accomplices in operating an illegal transportation service and, just for good measure, violating privacy laws. That’s in addition to being held responsible for inciting others to break the law by employing them, causing riots and taxi strikes. However, this latest ruling is far from the company’s first legal tussle since it was founded in 2009. The company continues to grapple with numerous regulatory issues in Europe and Africa and there is a long road ahead. And in case you didn’t see it coming, Uber is appealing the French court’s ruling.

I don’t think you’re ready for this jelly…

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It’s just jelly to you but to its shareholders, it’s a profit of $191 million. I am talking about J.M. Smucker Co., whose latest earnings positively dazzled Wall Street, sending shares jumping 25% today, to a record high of $142.27. Of course, it wasn’t just an increased urge for PB&J’s, with Smucker’s Jif peanut butter, that sent those sales soaring. Dunkin’ Donuts Brand Coffee, Folgers Coffee and…wait for it…pet food figured prominently in Smucker’s epic 39% profit surge. Smucker’s coffee products account for the company’s biggest market and pulled down a 9% increase in the fourth quarter, while its pet foods, that include Meow Mix and Milk-Bone, accounted for a third of all sales. It helped that the company offered up plenty of promotions to drive demand for its K-cup offerings. The company’s acquisition of Big Heart Pet Brands last year also helped a lot to drive up the impressive earnings. Revenue surged 25% to $1.81 billion when analysts only expected $1.75 billion and Smucker’s added $1.44 to its shares when predictions were only for $1.20. Those earnings were especially welcome since last year at this time, the company posted a 41% profit loss.

Just because he can…

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Alphabet CEO, Larry Page is into cars. Especially if they can fly. These days, the Google co-founder is funding two companies that are currently building and tweaking prototypes of small, all electric planes that can take off and land similar to helicopters. Just like the flying saucers you saw on the Jetsons. Page has already plunked down $100 million into Zee.Aero, a start-up launched in 2010, that has been testing two prototypes in Hollister, California. But why fund just one company when you have the means to fund two? That’s why Larry Page has also poured money into Zee.Aero competitor, Kitty Hawk, led by Sebastian Thrun, the Google X founder who is also behind Google’s self-driving car program. Coincidence? I think not. But it’s sure to be a crowded race to the finish as there are at least a dozen other companies around the world that are hoping to churn out a similar prototype, well before Larry Page’s darlings.

 

Consumers Don’t Itch for Fitch; Wall Street Un-impressed that Costco Hits its Numbers; Why is UAE’s National Carrier Angry at the U.S.?

What are your qualifications?

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Nothing like a fickle teenage population to cause your company to lose 14% in sales. The fact is, consumers just aren’t digging A&F’s offerings lately. Combine that with a strong dollar and you get earnings that you’d rather not announce. But they were announced, in all their unattractive glory, and sadly, for A&F anyway, the apparel company took in a $63.2 million loss with 91 cents per share lost – a far cry from the $23.7 million and 32 cents it lost a year earlier. Sales, by the way, came in at $709.4 million, a major ugly drop from the $827.4 million the company raked in last year. These dismal numbers are also the result of the strong U.S. dollar that continues to wreak its fiscal havoc on both Abercrombie & Fitch and Hollister. So the company has decided to lower prices on its merchandise  – in Europe, that is. But the powers that be admitted the retailer will continue to take a sales hit despite these efforts.  Interestingly enough Hollister, has been showing slight signs of recovery so shares did surge today on that bit of information. If you think you possess the skills that could have prevented this messy quarter, then perhaps you should polish your resume and submit it to A&F. The company has been sans CEO for six months and is on the prowl for a new one.

A year’s supply of toilet paper…

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Costco topped analysts’ estimates and if this comes as a surprise to you then, clearly, you have never experienced the magic that is Costco. Sales for the warehouse retailer came in at $25.5 billion, with revenue taken in from membership fees up 4% to $584 million. Sales are up 6%, leaving competitors like Wal-Mart and Target in the dust. The company pulled down $516 million in profit on a total of $26.1 billion in revenue, adding $1.17 per share, a 9% increase over last year and just a teeny tiny penny more than what analysts expected. However, shares of Costco, for some inexplicable reason, fell more than 1.5% today. Well, actually there is an explicable reason, sort of, as traders were underwhelmed with the wholesaler’s performance and hoped Costco would do more than just top expectations. You can’t please ’em all, I guess. And now, if you’ll excuse me, I’m going to drown myself in a one ton container of Kirkland brand jellybeans…

And it’s all your fault…

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The United Arab Emirates’ fast-growing national carrier, Etihad Airways, took down some impressive numbers with revenues of $7.6 billion and profits coming in at $73 million. Those earnings are a 52% increase over last year, yet, the airline is all up in a snit. It seems the suited folks running the show at Etihad are ticked off (feel free to insert a more colorful word) because “aggressive protectionist sentiment” from the West, i.e. the United States, is going to wreak fiscal havoc on the airline in the future. Apparently, as I have never been on board one of Etihad’s aircraft, its fleet is pretty tricked out, with competitive prices and a major edge on attracting passengers in the Persian/Arabian gulf. US carriers say this advantage comes from major government subsidies and that Etihad is simply messing with an otherwise level airline playing field. However, an independent study found that US carriers also get by with a little from Uncle Sam. So is this a case of the proverbial pot calling the proverbial kettle black? Hmmm.

Amazon: Deal With It; American Airlines Gets on Board (Finally); Abercrombie & Fitch CEO Ditch

Let’s make a deal…

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Amazon has come up with yet another way to reinvent shopping – sort of. The e-commerce website added a new feature to its website dubbed the “Make an Offer” button. The ever-resourceful mega e-tailer surveyed a bunch of its sellers and wouldn’t you know it: Several sellers said that the ability to negotiate prices would help drive sales for them – and for Amazon, of course. 150,000 items will get that nifty little button added to their items’ options with hundreds of thousands more coming next year. Unlike eBay, there will be no bidding against others and negotiations are completely private.  A customer makes an offer and…voila! The seller gets to reject, counter or reply. If a seller counters, a customer has 72 hours to counter-counter (is that a thing?). Apparently it makes customers feel like they are getting the best possible price for whatever it is they are buying. In any case, if you’re into haggling over prices, you’ll have plenty what to choose from any number of fine art, sports and entertainment collectibles being offered up.

It’s about time…

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American Airlines, which merged with US Airways last December, is reaping huge earnings, along with just about every other US carrier. To celebrate, it’s giving itself a $2 billion upgrade. Which is really great, because last time I flew the airline, on its vintage aircraft sporting drop down televisions with poor picture quality, American Airlines kept showing commercials for its new fleet of aircraft. The commercials made it sound like the improvements were just a few days away. That was over a year ago. In any case, look for redone lounges and better aircraft. Flying international first-class? You’re in luck. Well…you’re paying a mint for that luck, but anyways, you get lie-flat seats (which I’m pretty sure other airlines have been offering for years now). Need to get online while in-flight? No problem. Buy an international ticket to anywhere and American will provide you with satellite-based internet. Or, if you don’t even need to leave the country, you can just fly Virgin America, which has been offering in-flight internet…for years now. If you’re flying on the most economical ticket, which will still be exorbitantly expensive, well then, screw you. You’re lucky just to be sitting in the new airplane. Wondering if that $2 billion will help improve the attitudes of some of American Airlines’ more surly flight attendants? Well, screw you again.

And you’re out!

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Who can the forget the days when Abercrombie & Fitch CEO Michael Jeffries not so charmingly said back in 2006, “We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong, and they can’t belong. Are we exclusionary? Absolutely.” Well now, he doesn’t belong anymore after abruptly “retiring,” something a lot of folks wish he’d done a long time ago, including activist investor Engaged Capital which last year said the company’s lousy numbers  (Engaged Capital said it way more eloquently) “is a result of a failure of leadership.” Amen. Investors celebrated news of the “retirement” by sending shares of the stock up over 6%. The company, which has  834 stores in the United States with 166 stores in other parts of the globe, also owns Hollister and Gilly Hicks. Abercrombie & Fitch has been doing poorly for awhile now, unable to compete with the likes of H&M and Forever 21. Abercrombie & Fitch even tried ditching the logo on a bunch of its merchandise, which did little – if anything – to help boost its earnings.

 

 

Up up and away….

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We had another good month, at least according to the Labor Department anyways, which graciously just informed us that 214,000 jobs were added in October. But it gets even more exciting because the unemployment rate dropped. Yes you read that correctly, my fiscal minded friend. Instead of the unemployment rate hovering in the 5.9% range, that rate now hovers around (drum roll please) 5.8%. Yep that .1% drop actually means super huge things. Unfortunately those smug analysts estimated that about 16,000 more jobs would be added. But oh well, what’re you gonna do? The government happened to have added 5,000 of those jobs, by the way. And speaking of more labor, it would seem that the average amount of time Americans work per week has gone up as well. By ten minutes, that is, if my math is correct. So now we collectively work, on average, 34.6 hours per week. No matter how you personally feel about the amount of time you work. Just know that an increase like that is also a good sign. But if you prefer to work less, hey, far be it from me to stop you.

Gone phishing…

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It wasn’t enough that Home Depot now holds the dubious distinction of having suffered the LARGEST data breach. Ever. I’m sure Target’s pretty stoked not to be rocking that honor anymore. But now, it seems that in addition to the 56 million debit and credit cards that were compromised, 53 million email accounts were also stolen. So what do these hackers intend to do with all those email accounts? Well, phishing attacks are definitely on their to do list.  The unfortunately resourceful hackers entered Home Depot’s system through vendor accounts using usernames and passwords. The breach happened between April and September. Apparently, that was how Targets data breached was executed as well.

Fitched out…

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It’s no coincidence that you’ve been noticing a lot less of Abercrombie and Fitch logos flitting about. But maybe you never noticed them to begin with. In any case, the company just released its earnings and they were way untrendy. The company’s target demographic, teenagers, and by that I do mean that portion of the human population that changes its mind quicker than you can say…well anything…may be flocking to the mall but they’re not flocking to A&F. That goes even more so for its Hollister brand. Our tres tres trendy pals across the pond also have seem to moved on to other brands as well. In fact the retailer hit a two-year low. Analysts expected revenues over $982 million. But instead the retailer took a 12% hit getting just past the $911 million mark.  Last year at this time the company pulled in over a billion dollars.