A&F Earnings Are Out of Fashion; McDonald’s Biotic Changes; Target-ing Change

Teen-y tiny…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Teen-centric apparel company Abercrombie & Fitch took a fourth quarter beating. One of the (many) reasons seems to be that the fickle adolescent community got tired of advertising the A&F logo on their chests and butts. And like so many other companies, the strong U.S. dollar also seemed to be putting a crimp in the retailer’s numbers, especially considering that a third of the company’s revenue comes from outside the country.  Same store sales also decreased by 10%. Then there’s the part about how teens have been spending less money on clothing than in recent years, yet they are increasingly looking to outfit themselves through the likes of H&M, Forever 21 and Zara. Those chains tend to offer “fast fashion” that kids today totally dig at much better prices. Does that make A&F’s fashions slow? Hmmm. Oddly enough, American Eagle, one of A&F’s competitors actually beat the street with its earnings and even hit a 52-week high. Net sales of Abercrombie & Fitch fell 14% to $1.12 billion with  profits coming in at $44.4 million and 63 cents per share. Analysts expected $1.15 per share on $1.17 billion in revenue.  To add insult to injury, Abercrombie & Fitch is looking to unload its company jet , a relic from the days when big mouth CEO Michael Jeffries ruled the A&F empire.


Image courtesy of  Idea go/FreeDigitalPhotos.net

Image courtesy of Idea go/FreeDigitalPhotos.net

If you’re not into chicken seasoned with antibiotics, then you’re in luck. McDonalds has decided to scrap that special feature from its poultry menu, except it’s going to take approximately two years to fully get there. Steve Easterbrook, who took over as CEO just three days ago, did promise some major changes at the the Golden Arches. The fast-food company has become increasingly concerned over “superbugs” that have caused about 23,000 deaths per year. McDonalds will still allow ionophores in its chicken products. Yum. But don’t sweat it too much. Ionophores are antibiotics meant for our feathered friends – not for humans. Phew. The chicken change will affect the 14,000 eateries in the United States, but don’t expect to see any changes in the 22,000 McDonalds restaurants abroad. At least not yet, anyway. While Chick-fil-A already did away with antibiotics-laced chicken a year ago, the fact that McDonald’s is set to make these changes is rather epic, being the largest fast food chain and all. Once McDonald’s gets its distributors and processors to alter the food (for the better, of course), it will make it substantially easier for smaller chains to follow suit. So, here’s to antibiotic-free chicken! Bon appetit!

About those unemployment benefits….

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Big changes are in store for Target and it’s safe to say some of them won’t be welcomed. The giant retailer, who is in the process of literally closing up shop in Canada, is also in the process of trying to cut $2 billion in costs. Part of that cost-cutting includes job-cutting. Several thousand people will need to polish up their reumes and update their LinkedIn accounts as Target looks to cut most of those positions from its corporate headquarters and some position in India, as well. But Target’s got other big ideas that don’t involve applying for unemployment benefits. It’ll be running a huge Hispanic millennial campaign – apparently the first of its kind – and part of it involves teaming up the CW’s “Jane the Virgin” together with Target’s baby department. Then Target’s also looking to open up 15 more stores, however, eight of them will be CityTarget and TargetExpress stores which – you guessed it – will be taking an urban approach seeing as how they will be geared toward an urban crowd in a presumably urban location.


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

Let’s make a deal…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

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…

Image courtesy of vectorolie/FreeDigitalPhotos.net

Image courtesy of vectorolie/FreeDigitalPhotos.net

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!

Image courtesy of  iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

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.