Twitter’s Attempts to Tweet Out Terror; Wal-Mart Boffo Earnings; EPA Calls Out Harley-Davidson

Tweet this…

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Looks like ISIS is going to have to find itself a new social media platform as Twitter pats itself on the back today after announcing it suspended 235,000 terrorist-related accounts in the last six months. That figure was about double over the previous period and the social media company went to great lengths getting bigger teams to review reports of flagged content on the site on a round the-clock-basis. Better spam detection and language capabilities also helped with the endeavor as the amount of time between content getting flagged and shutting down that content has gone down. But the great effort only really came about after Twitter took a lot of heat for allowing terrorist-related content to gain a big foothold on ISIS’s preferred site. Even the director of the FBI said how “Twitter was a devil on their shoulder” back in 2015. ISIS could have given courses on how to optimize media engagement as the terror organization regularly used Twitter to spread propaganda, recruit fellow murderers, raise funds for their evil ways and publicize its horrific actions. But to be fair, Twitter does have a policy in place prohibiting the promotion of violence and terrorism.  In any case, while Twitter concedes there’s no real “magic algorithm,”  to finding and shutting down terrorist activities on its site, there has been a noticeable drop on Twitter of all things ISIS and other terror-related organizations.

What bad retail landscape?

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It’s good to be Wal-Mart as the largest retailer in all the land posted better than expected results with revenue of $121 billion and a $3.8 billion profit for the second quarter, adding $1.21 per share. Analysts predicted shares would only gain $1.02. That profit was a very welcome 9% increase over last year’s $3.5 billion second quarter profit while the revenue figure beat projections by about $2 billion. If Macy’s Kohl’s and Target are left scratching their heads after their disappointing earnings, perhaps they should take a page or two from Wal-Mart’s playbook. The company made a major push in its e-commerce division, which always helps matters when you’re competing with the likes of Amazon.  Wal-Mart also increased its full year earnings outlook to $4.15- $4.35, up from $4.00 – $4.30. In addition to lower gas prices and warm weather, Wal-Mart brass attribute its great earnings to the boost they gave to employee wages which they think led to better customer experiences. Maybe it did. Maybe it didn’t. But there’s no denying the  company experienced stronger than expected sales growth.

Exhaust-ed…

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Look out VW. There’s a new emissions offender in town. This time the dubious distinction goes to iconic motorcycle maker, Harley-Davidson, who has to pay a $12 million penalty and another $3 million to fund a clean-air project.  The U.S. claims the company violated air pollution laws through its “super-tuner” devices.  These devices, while improving engine performance, also caused the exhaust levels for those engines to increase well beyond what they were allowed. Then there were some 12,682 bikes that were also found to be short of regulatory requirements. Even though Harley-Davidson graciously disagrees with the EPA’s findings, it settled if only to avoid a long-drawn out and very expensive legal battle. As part of the settlement, Harley-Davidson doesn’t even have to admit wrongdoing. After all, who likes to admit when they’re wrong, eh? In any case, the company will cease selling the devices by August 23 and will have to buy back and destroy the devices from the dealerships. Naturally, shares of Harley-Davidson did take an 8% hit following the news of its own emissions scandal, but they recovered relatively quickly. Sort of.

UnderArmour Gets a Chink; McDonald’s Deserves a Break Today; Rate a Minute! No Hike in Sight

Fit to be bit…

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Under Armour seems to have suffered a chink in its earnings as its profits took a particularly brutal 57% dive. The primary culprit is Sports Authority, a company that is thisclose to becoming retail history, but was also one of Under Armour’s biggest retailers carrying tons of its merchandise. Hence, Under Armour took what’s called an impairment charge, and impairing it was, to the tune of $23 million. Last year at this time, the Maryland-based company hauled in an impressive $14.8 million profit. This year, however, that profit was a very disappointing $6.3 million. On the bright side, Under Armour is headed to Kohl’s 1,100 department stores next year. Apparently, it’s a way to connect with female consumers. Who knew. Under Armour brass think this new foray into Kohl’s will make women’s sales hit the $1 billion mark. Besides, since Nike, Under Armour’s biggest competitor, also happens to have a strong – very strong – presence in Kohl’s,  Under Armour hopes its new endeavor will take a big chunk out of the competition’s sales. But if Under Armour’s numbers still fail to impress next quarter, it might have to do with the exorbitant real estate it just leased in New York City – the renowned FAO Schwarz toy store. The rent on that baby ought to set the company back. But the athletic apparel company is banking heavily that the location location location will more than compensate by bringing in some boffo sales.

Mac-attacks need not apply…

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The Golden Arches seemed to have lost their luster this quarter with worse than expected earnings and profit falling over 9% to $1.1 billion. But how could that be if you and everyone you know was there all the time dining on its delectable all-day breakfast selections? And herein lies the problem. Well, part of it anyway. You see, McDonald’s breakfast offerings skew cheaper than the rest of its menu items. Apparently consumers really like having the option to eat breakfast for lunch…and dinner. And they did. A lot. Instead of the pricier items. Incidentally, Dunkin Brands Group Inc, Starbucks Corp and Wendy’s, to name a few, also reported unsavory earnings and shares of McDonald’s took a nasty tumble, bringing along the rest of the industry with it. It seems McDonald’s menu prices also had a negative impact on earnings. The cost of food went down in grocery stores and because of it, more would-be diners chose to eat at home. The curious thing is that the cost of food also went for McDonald’s, which ought to mean that its selections should have been cheaper, or at any rate, stayed the same price. Except that they didn’t because McDonald’s had to increase menu prices to compensate for increased labor costs.

Fed-up…

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In case you were holding your breath to see if the Fed is going to raise rates, you can let it out now. It won’t. At least not before September. Or maybe even December. Apparently the money experts want hard-core evidence of a pick-up in inflation before the Fed decides to make any changes. The Fed wants to see a 2% inflation rate, which might seem like an incredibly minuscule number, yet it’s one that carries incredible weight.  Then there’s the not-so-slight issue of the relatively healthy U.S. economy in the face of the not-as-healthy global economy. Even as the markets here reached new highs, with a labor market that saw an impressive 287,000 jobs added in June, experts – me not being one, mind you –  expect maybe one rate hike this year. From the Brexit to China and other assorted EU drama coming down the pike, the Fed’s not too eager to put in for any hikes until the rest of world cooperates they way it ought to, fiscally speaking anyway. After tomorrow, the Fed’s got three more meetings this year to decide its next move, so sit tight. Or don’t.

Harley’s Rough Ride on Wall Street; Madoff Victims Pay Day; Amazon Wants You. Really.

Rough riding…

Image courtesy of sritangphoto/FreeDigitalPhotos.net

Image courtesy of sritangphoto/FreeDigitalPhotos.net

Harley-Davidson is no match for Wall Street as the all-American bike gets whipped by yet another rough quarter.  With sales down 2.5% in the U.S. and another 1% worldwide, Harley-Davidson brass have made a brutal decision to cut a bunch of jobs and ship out 11,000 less bikes next year. Instead, the company will dish out $70 million to increase its 2016 marketing budget. The company is hoping (and presumably praying) that it can increase product and brand awareness. And get people to buy more bike, of course. But how is it even possible that a brand as iconic as Harley would need to do such a thing? While there’s no disputing that there’s nothing like a Harley, the company is facing increased competition from European and Asian bike makers, like Ducati, Royal Enfield and Triumph. Those companies are putting out some fierce machines, and in some cases, for a lot less money than a “hog.” The proof is that in the first nine months of the year, the number of registered bikes has surged 6.6%. Net income for Harley-Davidson came in at $140.3 million, a 6.5% decrease over last year’s $150 million. Harley added 69 cent per share when analysts predicted 78 cents instead. In fact, shares fell the most that they have in six years.  But that isn’t stopping Harley-Davidson from plans to open up 200 more dealerships abroad.

Lost and found…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

It’s been seven years since Bernie Madoff’s evil Ponzi scheme unraveled. But today, more than 1,200 of his victims (there were way more than that) can sort of rejoice and look forward to recouping at least some of their lost funds. Irving Picard, the trustee who has been hard at working recouping money on behalf of the victims of the largest Ponzi scheme in U.S. history, has managed to release $1.5 billion from legal reserves. Victims who invested up to $1,161,000 can expect to get back about $1 million. Those who unfortunately invested more can expect to recoup 61 cents on the dollar.  Much of this money is coming from the widow of Madoff’s deceased alleged co-conspirator Jeffery Picower.  She agreed to turn over $7.2 billion of her late husband’s ill-gotten stash. Of course, some of that cash, approximately $1 billion, will also go towards covering all those enormous legal fees of the law firm handling this case. U.S officials have so far recovered about $11 billion from the $17 billion that was lost. As for Bernie Madoff, he’s hitting year 7 of a 150 year prison sentence.

Hire cause…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

If you’re looking to score some extra cash this holiday season then don’t let the New York Times get in your way and  dissuade you from applying for a job at Amazon. I bet Amazon is hoping the NYT doesn’t dissuade you either since the company is looking to hire 25,000 full-time employees and 100,000 part-time employees for the holiday season. While the company has always hired more people for this time of year, this time the digits are pretty epic in that they’ve never been this high. It should be duly noted that plenty of people who had been hired specifically for the holiday season were subsequently kept on as permanent employees.  The jobs will be primarily in the sorting and fulfillment facilities across the country.  But Amazon’s not the only game in town as Target, Wal-Mart, Macy’s, Kohl’s and a slew of other companies are also looking to amp up their workforces this holiday season. Just be sure not to ask Bo Olsen for a reference.

Avon and Wall Street Get Punk’d But Ashton Kutcher’s Not Behind This One; Shake Shack Nails Some Juicy Earnings; Kohl’s is Just Not Good Enough

It’s not the Avon Lady…

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Image courtesy of winnond/FreeDigitalPhotos.net

So here’s a weird thing that happened on Wall Street today. Trading for the Avon company, based in the U.K. (no that’s not the weird thing) was halted three times all because of a prank filing. It’s like a prank call. Only incredibly stupider and much more serious. Like the kind of serious that is going to require legal representation once the moron who did it is caught. Some person/entity group, calling itself PTG Capital Partners, filed an $8 billion takeover bid with Federal regulators for the company, once famous for its now defunct door to door sales ladies. If you thought $8 billion seems like a lot for Avon, you aren’t the only one, because that comes out to more than triple its stock value. When the SEC posted this filing to its website, shares became volatile and trading stopped – more than a couple of times. Beside the fact that the filing was one big grammatical mess – a major red flag – calls made to the phone number listed went unanswered – another major red flag. A Texas address for the firm’s attorney, Michael Trose, was also listed and while the address is real, the building’s manager said there was never any tenant by that name – yes, red flag number three. Even though Avon has had three straight years of losses, the stock was a bit higher, presumably from all the drama surrounding it today.

Would you like fries with that?

Image courtesy of rakvatchada torsap/FreeDigitalPhotos.net

Image courtesy of rakvatchada torsap/FreeDigitalPhotos.net

After brutally beating its earnings, Shake Shack shares (alliteration, anyone?) are up today and at one point took a 10% leap. The burger un-joint pulled down revenues of $37.8 million, a 56% increase with a 4 cent per share profit, when analysts only expected the company to pull in 3 cents per share and $34 million in revenue. Maybe those “analysts” should start taking their lunches at Shake Shack and see for themselves. If you recall, the Shake Shack IPO was priced at $21 and as of today, the stock is more than triple that, coming in close to $70. While the naysayers scoff at the high value of the stock, its earnings seem to justify the price of the shares. So there. Even diners outside of New York City are digging the grub at the eatery as evidenced by a 12% increase in same store sales. But it wouldn’t be right if we didn’t mention how some of those impressive earnings were helped by the fact that Shake Shack raised its prices on a few “select” items. Expect to see more “Shacks” as the company has plans to open up 15 more locations, with five of those outside of the U.S. So I guess you could say Shake Shack nailed it. This quarter anyway.

On the other hand…

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Image courtesy of jscreationzs/FreeDigitalPhotos.net

Kohl’s took a Wall Street beating today on the news of its earnings miss. Shares of the retailer tumbled all the way down 10% at one point.  The company, which has over 1,100 stores, actually made a lot of money this quarter. Way more money than Shake Shack, in fact. The company pulled down $4.12 billion in sales and took home a $127 million profit at 63 cents per share when analysts only called for a 55 cent profit. Sounds impressive, right. But for those finicky analysts, those numbers, like my grades in high school, were just not good enough. You see, all those billions and millions that Kohl’s raked in were not enough to offset the fact that its sales were up only 1.3%. The harsh reality is that those very same finicky analysts expected the company to earn sales of $4.19 billion. Hence, the drop in price of shares.

Keurig Issues a Very Un-Merry Recall; Walgreens’ Happy Fiscal New Year; Barnes & Noble Regifts Itself, Sort of, With Nook Buyback

Ahhhh Keurig!!!

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Image courtesy of lamnee/FreeDigitalPhotos.net

Looks like the automotive industry doesn’t have the monopoly on recalls this year, after all. Enter Keurig, beloved brewer of coffee and other hot beverages for millions. Following over 90 reports of people literally getting burned by their machines, Keurig recalled 7.2 million Keurig Mini Plus machines because they can overheat (imagine that) and spray hot liquid on its discerning coffee drinkers. Oh the horror. Not sure if your precious Keurig is on the recall list? Well, there are an estimated 6.6 million brewers that were recalled in the United States, with the rest purchased in Canada. The machines were made between December 2009 and July 2014 and were likely purchased at Kmart, Kohl’s Target, or directly from the Green Mountain website. In any case, rest assured that Keurig will ship you a repair kit FOR FREE. Of course, can you guess what the company stock did today? Yes it took a bit of a pre-Christmas nosedive and that’s in addition to the 5% drop in sales the company saw in its fourth quarter.

Out with the WAG, in with the WBA…

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Image courtesy of jscreationzs/FreeDigitalPhotos.net

Nothing says jolly like beating analysts’ estimates and Walgreens did just that. The health retail giant pulled in some impressive numbers for its fiscal first quarter with earnings of $809 million and $.085 per share. Analysts forecasted a paltry $0.74 per share. Analysts also called for revenues of $19.43 billion. But Walgreens instead pulled in close to $19.6 billion in revenues. In fact, shares of the company have pleasantly creeped up 29% in the past year. And while we bid farewell to 2014, it’s also time to bid farewell to retiring Walgreens CEO Greg Wasson. Wasson, who will not soon be forgotten – whether some people like it or not – orchestrated plans to takeover Swiss health and beauty company Alliance Boots. Part of the original plan was to pull off an inversion-type deal which did not exactly pan out. But what did pan out was Walgreens’ long-awaited foothold onto the international pharmaceutical/health/beauty market by just taking over the Swiss company. So bienvenu Walgreens. Or whatever it is they say there. With this new deal we shall also bid farewell to Walgreens presence on the New York Stock Exchange and Nasdaq under the ticker symbol WAG. Assuming the deal with Alliance Boots finalizes by December 31, Walgreens will now be traded only on Nasdaq, under the ticker symbol WBA, as part of the Walgreens Boots Alliance, Inc holding company. Sniff, sniff. As for the company’s 8,200 plus stores, expect to see some changes as the company looks to cut costs and trick out appearances.

Nook’d out…

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Image courtesy of adamr/FreeDigitalPhotos.net

It’s official. The Nook e-reader business is once again fully back in the arms of Barnes & Nobles. But don’t expect the reunion to last too long as Barnes & Nobles plans to spin it off on its own by August. The Nook, which turned out to be a big money loser and just couldn’t compete with Amazon and friends (and enemies), cost Microsoft $300 million back in 2012. Barnes & Noble graciously agreed at the beginning of the month to buy back the biz from the software giant for $125 million with Pearson Inc. still holding a stake in the company. But no more as Barnes & Noble paid $27.7 million in cash to the educational book publisher with $13.8 million in actual cash and 603,ooo shares of stock.  Wall Street liked the move as well and shares of the bookseller moved up a smidge.

Black Friday Offers “Creep-y” New Sales Trend: Visa Vis your Wallet; Defensive Save for the GDP

On your mark, get set, shop!

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Image courtesy of Feelart/FreeDigitalPhotos.net

Black Friday keeps coming sooner and sooner. Expect to see Kohl’s, JC Penney and Macy’s all unlocking their doors while your still trying to pry yourself out of your chair, post turkey. In fact, Kohl’s is opening at six pm, two hours earlier than last year. But that’s nothing compared to Amazon which is starting its Black Friday deals on Saturday. This Saturday, November 1, nearly four weeks before the actual “Black Friday.”  This trend even has a name. It’s called “Black Friday Creep.” How clever, sort of. You can thank the recession we endured a few years ago for all this Thanksgiving retail interruption. Several retailers aren’t too thrilled with their sales forecasts and are hoping those added shopping hours and Thanksgiving day will give their sales a much needed boost. But don’t bother standing on line at Gamestop or Costco. Those companies feel Thanksgiving should be spent with families. However, GameStop will be flinging it’s doors open at midnight. Not sure how that fits into the quality-family-time equation. Costco, however, strongly feels its employees need time with their families and that they work especially hard during the holiday season. So what does that say about how Walmart executives feel about their employees, whose stores will be open all day on Thanksgiving?

Speaking of transactions…

Image courtesy of Michelle Meiklejohn/FreeDigitalPhotos.net

Image courtesy of Michelle Meiklejohn/FreeDigitalPhotos.net

Visa reported its fourth quarter earnings and how do you think the largest credit and debit card company did? I am being rhetorical. The company reported $3.23 billion in revenue, a whopping 9% increase over the same time last year. Analysts expected only $3.19 billion. Net income for the company came in at $1.4 billion which came out to a sweet $2.18 per share. That pretty little figure was 17% higher than last year’s fourth quarter and $0.07 higher than what Wall Street predicted. One of the reasons these numbers are so darn plump has to do with Visa’s growing payment volume. The company processed almost 17 billion transactions with about $1.2 trillion changing hands. Note the use of the “t.”  For the year, the company can already boast almost 70 billion transactions. That’s nothing to sneeze at, I am sure you know. All eyes are always on Visa, which is seen as a barometer of our collective spending habits and other financial aspects of our lives.

Growing, growing not gone…

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Image courtesy of jannoon028/FreeDigitalPhotos.net

Our fourth quarter grew at 3.5%. Economists only predicted a growth rate of 3% How ’bout that? But don’t pop open the champagne just yet because it didn’t grow as much as the previous quarter’s 4.6% rate. But it’s not fair to compare the quarters. After all, we were just coming off a brutal and fiscally inconvenient winter so the economy did have a jump of rebound there. So what kinds of things contributed to this quarter’s growth? One of the big contributors, whose spending frenzy helped growth is the government. Yes, in this case, major government spending proved to actually be healthy for the economy. But it wasn’t just any kind of government spending that sent our GDP into upward glee. For that we need to give a big shout out to defense spending, which played a prominent and much appreciated role in our economy this quarter.

 

 

FedEx-cellent Earnings; Santa’s Not So Little Helpers; New Home Confidence Booster

Can I get that overnight?

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Image courtesy of tigger11th/FreeDigitalPhotos.net

You may not use FedEx on a regular basis but other people sure do. The shipping company’s earnings toppled Wall Street predictions earning $2.10 per share in its first quarter compared with an expected $1.96 per share. Nothing like giving those predictions a smack down. Those hefty earnings were a 37% increase over the same time last year which took in just $1.53 per share. If you’re in the market for some shares of this very useful company, you’ll need to plunk over approximately $159…again, per share. Revenue for the company came in at $11.7 billion while analysts short changed FedEx for a paltry $11.44 billion. In fact, just between June and August the express shipping company earned a whopping $606 million, which happens to be a not-so-modest 24% increase over the same time last year. Graciously enough, FedEx will be waiting until after the holiday season to raise its rates by almost 5%.

Elves, elves everywhere…

Image courtesy of suphakit73/FreeDigitalPhotos.net

Image courtesy of suphakit73/FreeDigitalPhotos.net

Speaking of the holiday season (and FedEx, for that matter) which is in fact a lot closer than you may (choose to) realize, FedEx and UPS have big plans to add to their workforces. Following last year’s debacle when the shipping companies received more packages than they could physically handle, with some arriving after the holiday, UPS and FedEx decided they would increase the amount of workers they hired last year so that there will be no doubt – make that little doubt –  that your packages make it on time. FedEx plans to hire 50,000 seasonal employees, as opposed to last year’s 40,000. UPS is pulling out all the stops by bringing in 95,000  extra workers for what they predict will be an epic  – at least as far as shipping needs are concerned – holiday season. But it’s not just shipping companies that are hiring extra staff. Kohl’s just announced its plans to hire approximately 50 associates per store. Considering Kohl’s has over 1,160 stores in 49 states, you just might find yourself at the right end of some decent customer service come December. Expect other stores to follow suit.

Home sweet home…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Which brings us to homebuilders confidence. Well really it doesn’t, but whatever. According to the National Association of Home Builders/Wells Fargo builder sentiment index (yeah, try saying that five times fast), the sentiment hit 59 in August. Analysts called for about a 55. So ha! Considering anything over a 50 is good news, this number deserves its own party. In fact, US home builder confidence for new single family homes (sorry, old homes)  hasn’t been this well…confident – and high – in nine years. All this seems to suggest sales for homes will rise – which is good, especially if you’re selling. It also helps that the job market is improving and interest rates are low. All things that make buying a new single family home (again, sorry old homes) that much more enticing.