GM Invests in US. Trump Takes All the Credit (Again); Tiffany & Co. Credits Trump for Quarterly Loss; No Trump-ing Mattel with New CEO

Pressure cooker…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

GM just announced that it is throwing a whopping $7 billion into several of its U.S. plants in order to bring back thousands of jobs, in addition to the 56,000 hourly workers it already employs here. Naturally, Trump is taking credit for these actions and it’s kind of weird that he would since GM said these plans were already in place for months. Who you choose to believe doesn’t matter because Trump already tweeted about it:”With all of the jobs I am bringing back into the U.S. (even before taking office), with all of the new auto plants coming back…I believe the people are seeing ‘big stuff.'” Nothing says POTUS quite like the term, “big stuff.” But just so you know, GM didn’t exactly deny that Trump didn’t have something to do with its newly announced plans either. Although, General Motors did mention something to the effect of “this was good timing.” Feel free to read into that however you want since it’s no secret that Trump was gunning for GM over its manufacturing of the Chevy Cruze south of the border, and then bringing it back into the country tax-free. Incidentally, GM CEO Mary Barra is part of a panel of CEOs who are advising Trump on economic policy. Also incidentally, Mary Barra is expected to attend the President-elect’s inauguration.

Good fences?

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Image courtesy of jscreationzs/FreeDigitalPhotos.net

Guess who else is not happy with Trump? Okay, I guess that list is kind of long so I’ll just tell you: Tiffany & Co. The jeweler, which happens to own a flagship store that is adjoined to Trump Tower, reported a 14% drop in sales at that very store on Fifth Avenue. To be fair, the iconic jeweler was expecting a drop thanks to Trump. Only this one was worse than expected, citing “post-election disruptions.” Roughly translated, that means that in addition to the many many anti-Trump protesters, potential shoppers also had to contend with heightened security, courtesy of the secret service and NYPD, not to mention journalists and hoards of tourists eager to see if they could catch a glimpse of the President-elect. So just how bad were Tiffany & Co.’s sales? Well, in the US, those numbers only came in at $483 million, with comparable store sales down 4%.  And the luxury retailer isn’t very hopeful about those numbers going up in 2017.  But because Trump isn’t everywhere, global sales of Tiffany & Co. came in at $966 million, which was just a tad bit higher than last year at this time.

Don’t toy with her…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Barbie is getting a new boss as Mattel gears up for its second CEO since 2015. Enter Margaret “Margo” Georgiadis, whose last gig, for the past six years, was over at Google. She was President of Google Americas and oversaw commercial operations and ad sales for the U.S., Canada and Latin America. So, it’s safe to say she’s (over?) qualified for the job. She is among just 27 top ranking female executives at Fortune 500 companies. Georgiadis, who also worked at Groupon and Discover Financial Services, begins her role at Mattel on February 8, where she will also sit on the board of the company. She’ll be tasked with coming up with new, and hopefully ingenious ways to boost sales in a climate that has kids hypnotized by mobile devices. Unfortunately, these nefarious electronic gadgets have been putting a dent into the sales of not only Mattel, but Hasbro and Lego as well. However,  given that Georgiadis has a reputation for successfully building brands, boosting sales of Fisher-Price, Hot Wheels and the American Girl line should be easy as pie. Well, hopefully.

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GM’s Defect Debacle In Rearview Mirror; Overseas Deal Might Have Big Impact Here; Zen-tastic Quarter for Lululemon;

Emboldened or embattled?

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Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Score one for GM, the not-so-embattled-anymore auto company that just won a second lawsuit in a series of bellwether cases. In case you have been hanging out in another solar system for the last couple of years, tons of drivers are filing tons of lawsuits against GM because they got into accidents which they say can be blamed on GM’s faulty ignition switches. After a two week trial and a single day of deliberations, two Louisiana plaintiffs, who crashed their car back in 2014 during a freak ice storm, will not be awarded any damages despite their automobile’s defect. This win bodes well for GM and it’s a good thing because there are hundreds more waiting in the legal wings.This case is the second in a series of six cases that will be used to test strategies, with each side getting to choose three cases to argue. This case was GM’s selection and the next bellwether case is scheduled for May. GM already paid out a lofty $2 billion to resolve a slew of legal claims against it, in addition to recalling millions of vehicles. That includes a $900 million settlement to Uncle Sam so that the government would graciously agree to drop its criminal probe into GM. Another $575 million was paid out to settle close to 1,400 civil cases. Then GM set up a $95 million victims compensation fund. In the meantime, 15 people were fired over the defect debacle – that would have cost a buck to fix, by the way –   as GM CEO Mary Barra has been on a mission to change the company culture. Good luck with that one.

Deal or no deal…

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Image courtesy of digitalart/FreeDigitalPhotos.net

You might not be so familiar with a Taiwanese company called Foxconn but it’s more than likely you’re using its product. That is, if you happen to use a very popular mobile device known as an iPhone. Turns out Foxconn assembles those nifty little phones. But that’s not news. What is news is that the company is set to snap up Japanese company, Sharps Electronics for $3.5 billon. And if you can believe it, some analysts think it’s a bad move. And that’s even after Foxconn knocked a couple of billion off of their initial offer when it was discovered that Sharp has literally billions of dollars worth of problems. But, oh well. In any case, if and when the deal goes through, it will be the biggest acquisition by a foreign company in Japan. But that’s beside the point. Foxconn is unofficially hoping that this acquisition, however fiscally risky it may be, will help give it an edge, albeit a slight one, for its production contracts with Apple, especially considering that Apple uses Sharp screens. Foxconn is well aware that Apple has been giving out production contracts to other companies too, and competition like that can’t be all that good for Foxconn. Hence, besides assembling the phone, Foxconn would also own the company that supplies the screens and well, wouldn’t that put Foxconn in a nice, cozy, almost secure spot with Apple.

Make lemonade yoga pants!

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Image courtesy of Suat Eman/FreeDigitalPhotos.net

Lululemon doesn’t seem to be bothered by increased competition from Nike and Under Armour, as evidenced by its fourth quarter earnings which were nothing short of…zen. And by zen, I mean that the athleisure company beat the Street’s predictions. The athletic apparel company enjoyed a nice little holiday shopping season with increased sales that gave it a profit of $117.4 million with 85 cents added per share. Analysts predicted the company would pick up just 80 cents per share. Maybe those analysts need to pick up some new Lululemon yoga pants, no? Revenue kicked up to $704.3 million, up from last year’s $602.5 million, and again, analysts only expected $692.6 million this quarter. Last year the company only earned $111 million and 78 cents per share. Lululemon is expecting to whip out a fourth quarter that is sure to please investors by picking up earnings between $483 million to $488 million and adding 28 cents to 30 cents a share. However, the perennial buzzkiller we call Wall Street would rather see Lululemon rake in $486.1 million adding 37 cents per share. In what might seem like an awfully bold statement, the yoga apparel company plans on doubling its earnings by 2020. In the meantime, it expects its full fiscal 2016 year to gain between $2.05 and $2.15 a share and that’s nothing to sneeze at. Except that Wall Street is hoping for earnings that will look more like $2.16 per share. Lululemon is pulling out all the stops to improve its margins and part of that means switching over to ocean freight as opposed to air freight. Apparently, air freight is a gigantic margin-money eater. Who knew.

Unfit IPO Debut for Planet Fitness; Lost That Lovin’ Feeling…For Shamu?; If it Looks Like an Engineer, and Quacks Like an Engineer…

Fit to be fried…

Image courtesy of marcolm/FreeDigitalPhotos.net

Image courtesy of marcolm/FreeDigitalPhotos.net

Planet Fitness made its New York Stock Exchange debut but it looked more like Planet Fizzle as the stock, which tried to open at the high end of its range, stumbled on its very first day of trading. The company, notable for its $10 gym membership fees, offered 13.5 million shares and managed to raise $216 million despite its less than impressive open. The company, however, tried to give a good showing on Wall Street today, cleverly handing out all sorts of yummy, unhealthy goodies while engaging the crowds with games like musical hand chairs. That was not a typo. Laugh all you want, but Planet Fitness has over 7 million members, 1 million of whom joined within the last twelve months. Its membership is up over 24% from last year. There are very few companies who pulled that off recently. By the way, the company has 33 straight quarters of growth under its svelte fiscal belt, and saw $280 million in revenue. Add that to its 976 stores in 47 states, Puerto Rico and Canada. and that 9% hit the stock took today doesn’t seem so bad after all.

Was it something I said…

Image courtesy of Liz Noffsinger/FreeDigitalPhotos.net

Image courtesy of Liz Noffsinger/FreeDigitalPhotos.net

Things just keep getting fiscally uglier for Shamu and all his water-loving pals as Seaworld Entertainment cranks out yet another soggy quarter. Despite big promotions and a whale of a marketing campaign, attendance at the marine theme parks continued their downward slide. Brass at the company admitted they are continuing to deal with “brand challenges” which is basically code for the negative publicity the company suffered as a result of the very unflattering 2013 documentary “Blackfish.” And just how bad is attendance? Under 6.5 million people stopped by to hang out with the sea creatures, which was a 2% drop from the same time last year. Revenue, which was $391.6 million, is also down 3% from a year ago. But it’s the 85% plunge in profit, down to $5.8 million, that’s really got me questioning if people just don’t dig acrobatic dolphins and comedic sea lions.

If looks could kill…stereotypes…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

So what exactly does an engineer look like? Just ask 22 year old Isis Wenger. She’s got big plans to show the world on a billboard in San Francisco after some very rapid, enthusiastic crowd-funding. It all started when some people naively felt Wenger didn’t look like a “traditional” engineer. She then started the buzz-worthy hashtag #ILookLikeAnEngineer only to discover that there was a whole universe of engineers who also…look like engineers. 75,000 tweets later, including one from engineer and GM CEO, Mary Barra, not to mention a slew of other high-ranking female engineers from some of the world’s top companies, Wenger, together with engineer Michelle Glauser, started an Indiegogo campaign to put up a billboard in San Francisco featuring the diverse engineering community and its stereotypical misconceptions. Hoping to raise $3,500, they instead raised over $7,800…in less than 24 hours.

GM Gets Buffet-ed, Great Earnings Are Beautiful and Missed Earnings = Score for Killer Whales

Warren Buffet auto know…

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

There’s no denying GM had nothing short of a disastrous year. Not quite as disastrous as it was for the victims of their faulty ignition switches, of course. But as far as Wall Street was concerned their earnings were a fiscal nightmare (and deservedly so for not being on its safety “A” game). But despite GM’s lousy earnings and even lousier – make that non-existent profits – Warren Buffet’s Berkshire Hathaway (BRKA) holding company picked up 3 million shares of the embattled auto maker, according to an SEC regulatory filing. Laugh all you want but they don’t call him the Oracle of Omaha for nothing. The stock is at what you would call a “discount” and Warren Buffet loves himself a good discount. The man knows a thing or two about investing, seeing as how his company’s stock just hit  $200,00 a share. He also happens to think GM CEO Mary Barra is friggin’ awesome. Just don’t expect a quick turn-around as Mr. Buffet is known for holding onto stocks for the long-term. And in this case, that term might just be longer than usual.

Make-up retail wake-up….

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Image courtesy of keakguru/FreeDigitalPhotos.net

Apparently the quest for beauty is well…priceless. Estée Lauder Companies Inc. released really good and very attractive earnings, especially considering lots of other retailers posted less than glamorous earnings and the US Department of Commerce reported that July retail sales were virtually flat, effectively spooking plenty on Wall Street. Estée Lauder Companies Inc. also owns MAC, Clinique and La Mer (famous as much for the cost of its products as it is for the products themselves). The $28 billion make-up company pulled in $2.73 billion in revenues. Wall Street clearly underestimated the love for make-up and had pegged estimates at $2.66 billion. As for net income – it more than doubled coming up to $257.7 million. The company’s guidance also expects some nice growth hopefully adding a little height to a very unsightly, flattened retail graph.

A whale of tale…

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Image courtesy of bandrat/FreeDigitalsPhotos.net

Nothing like some bad earnings to get killer whales some new and much bigger digs. Following its really bad earnings the other day, with shares of SeaWorld falling 35%, the amusement park company is pledging $10 million for killer whale research and ocean health. Its CEO is also hoping that doubling the size of its Orca tanks will attract more people to its park and boost revenue. SeaWorld attributed some of its losses to the unflattering film “Blackfish” which SeaWorld called a “propaganda film. Two California lawmakers are hoping get a ban on killer whale performances. Of course PETA entered the fray telling whoever that a “bigger prison is still a prison.”

GoPro Makes a Gnarly Debut, IKEA Makes a Gnarly Wage Hike and GM Might Have a Not So Gnarly Recall

Would you like some meatballs with that…

Image courtesy of fotographic1980/FreeDigitalPhotos.net

Image courtesy of fotographic1980/FreeDigitalPhotos.net

In case you didn’t know, IKEA is a really industrious company and not just because you furnished your entire first apartment with it without ravaging your bank account. Today the Swedish company announced that it is raising its minimum wage by 17% from $9.17 to 10.76. “It’s driven from our vision of wanting to create a better everyday life for our co-worker.” Well amen to that, IKEA President Rob Olson! But the company also think it’s going to help keep turnover to a minimum and recruit more employees. IKEA is going by the MIT wage calculator that takes into account all sorts of factors and how much it would cost to afford life’s basic necessities. Gosh darn those smarties who did the math! The Gap and Old Navy also have plans to raise their minimum wage as well. The federal minimum wage is $7.25. However, the perennial buzz killers argue that raising the minimum wage is bad because it could lead to lay-offs and a decrease in hiring (cue the chirping crickets).

Wall Street is like totally stoked…

Image courtesy of M - Pics/FreeDigitalPhotos.net

Image courtesy of M – Pics/FreeDigitalPhotos.net

GoPro made its extreme Wall Street Debut today and it was not a disappointing ride. Founded in 2002 by Nicholas Woodman, the company pulled in close to a $1 billion in 2013. GoPro is all about documenting life’s awesome adventures with a special camera that would shame the one on your phone. No really, it would. Would you actually whip out your iPhone mid-skydive or mid-surfing? Didn’t think so. The camera and all its gnarly accessories make for some fun digital media, of which GoPro, naturally makes it easy to use on a variety of platforms. Valued at close to $3 billion, the company began its day at $24 a share but rose quickly to $30 a share making for a totally rad Wall Street ride.

Oops! It happened again…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

It would almost seem weird to go a week and not hear about another GM recall. Okay so this next one didn’t happen yet. But it’s coming because of a potential defect with airbags on Chevy Cruzes- a major problem and not just because it’s GM’s number two selling vehicle right after the Chevy Silverado.  So far, 120,000 of them have been sold this year. The defect, incidentally is not entirely the fault of GM who uses airbag supplier Takata – a supplier used by several car companies, in fact. Meanwhile, over at the Today Show, Matt Lauer has been taking heat over some questions he posed to GM CEO Mary Barra. He asked her if she got the position because she is a woman and that GM needed to present a softer image considering all its problems in the past year. Then Matt not-so-politely asked if she could even handle the job with all its challenges as well as being a super awesome mom with all the demands of that role. Would he have dared asked such questions to male CEO’s, many wonder? Back over at GM, Barra said the there would be no more firings over the recalls. Isn’t that a relief? Or isn’t it? Hmmm.

 

GM Gets Whipped By Congress Yet Again, Washington Redskins Lose to US and Instagram’s Bigger Picture and

How would you like your GM grilled today?

Image courtesy of winnond/FreeDigitalPhotos.net

Image courtesy of winnond/FreeDigitalPhotos.net

GM CEO Mary Barra visited Washington today for her second congressional grilling. Even after GM conducted its own internal investigation dubbed “The Valukas Report,” Congress still isn’t buying what it’s selling  – and recalling. Congress is still perplexed as to how GM took so very long – 11 years – to act on safety issues that claimed at least thirteen deaths. And while GM paid the maximum $35 million fine and set up a victims compensation fund, Congress was still left wondering how its possible that only fifteen people were fired over this debacle. Barra tried assured the government that forty new people were hired as safety inspectors. But then the CEO was forced to admit those “new hires” were promoted from within. In separate GM drama, the auto maker was served with a $10 billion lawsuit. “Victims” of this lawsuit are upset that the ignition switch recall affected the resale value of their cars and trucks.

Don’t say my name…

Image courtesy of vectorolie/FreeDigitalPhotos.net

Image courtesy of vectorolie/FreeDigitalPhotos.net

The Redskins didn’t score today and the season didn’t even start. In a 2-1 vote in the US Patent Office, it was decided that the the Washington Redskons had no right to trademark their name. They can still keep the name, which some experts say is offensive and disparaging to Native Americans. Native Americans, however, seem to be split on that issue. The team intends to appeal the ruling. In the meantime, this ruling poses some unfortunate fiscal consequences – namely that third parties can use the name and logo to make money without paying a cent to the team. However, some experts argue that won’t be that big of a problem. Certainly the Redskins must feel otherwise.

Smile and say profit…

Image courtesy of tungphoto/FreeDigitalPhotos.net

Image courtesy of tungphoto/FreeDigitalPhotos.net

Looks like Instagram isn’t just for furthering Justin Bieber’s career. Small businesses are increasingly relying on the social media app to help them grow their business, without even resorting to the ludicrous antics favored by ego-maniacal celebrities and reality stars. Followed by 200 million users worldwide, Instagram helps companies of all sizes by driving sales and picking up customers and clients. The app also helps foster brand development. Now who doesn’t love all that? Businesses have even been paying people to post pics of themselves with the companies’ products on their Instagram accounts. It’s free advertising for small businesses and Kim Kardashian! Just don’t follow Kanye West’s example and take four days to edit a picture. There’s nothing Insta about that.

Another Typical Day At GM? JPM Not Welcome To Miami and Building Good Sentiment

What’s old is new again…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

On Wednesday, GM CEO Mary Barra heads to Washington DC to face yet another congressional grilling  – this time over how her company plans to fix the lax corporate culture that led to faulty ignition switches, 54 crashes and thirteen deaths. She’ll also be grilled on how GM plans to the compensate the victims of its lax corporate culture that fostered “negligence.” GM is in the midst of fixing its faulty ignition switches in 2.6 million vehicles. However, it’s only gotten around to about 7% of them, which amounts to about 177,000 cars, since the recall was announced four months ago. But the auto maker better step on it since 3.2 million more recalls were just announced on vehicles from 2000-2014. GM hopes, as we all do, that all the vehicles will be fixed by October.

Miami heat on JPM…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Miami is not shining bright on JP Morgan Chase these days. The city, yes the entire city, is suing the bank for discriminatory lending. Miami is one of the country’s leaders in “zombie” properties and foreclosures. It blames the mega bank for much of this claiming the bank issued loans that made it harder for minorities to pay them back which ultimately led to tens of thousands of foreclosures in the region. Miami alleges JPM violated the federal Fair Housing Act and wants all sorts of legal damages awarded to it for things like reduced property taxes and municipal services because of foreclosures. Providence, Rhode Island and Los Angeles have also filed lawsuits against banks for similar reasons. Bank of America has been sued for “red-lining” no-loan zones even when minorities qualified for better loans. Of course, a JPM spokesperson called the claims “baseless.”

Not the best of sentiments…

Image courtesy of Supertrooper/FreeDigitalPhotos.net

Image courtesy of Supertrooper/FreeDigitalPhotos.net

Homebuilders are feeling a little bit more confident as far as the new house market is concerned. According to the National Association of Home Builders/Wells Fargo sentiment index, that sentiment rose to 49. Which is almost good news. When that sentiment is above 50, then we can all breathe a collective sigh of relief. But there hasn’t been any relief sighing since before January. Yes, winter was bit of a culprit there. But that number, even if it is a bit shy of where we’d like it to be, still shows that the home-buying matket is on its way to stabilizing, albeit slower than we’d like. New home sales are still at half the rate of what they should be in an otherwise healthy market that is currently down 4% from what it was a year earlier.