Under Armour’s Underwhelming Earnings; Trump Tackles Big Pharma Prices; No Easy Riding for Harley These Days

Chink in the armor…


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Under Armour released its quarterly earnings and they were pretty disappointing. Besides the company’s poor performance, it also bummed out Wall Street with a dimmer outlook. Growth for the company had regularly surpassed a 20% rate. But alas, that rate has come to a screeching halt and Under Armor warned us that a more modest growth rate of maybe 12%, with revenues of $5.4 billion, should be expected for 2017. Analysts had been holding their collective breath for a $6.8 billion revenue figure. Oh well. Maybe in 2018. Shares of the athletic apparel company had already taken a 39% beating in the last year. But after unveiling its latest figures, they dropped even more.  CEO Kevin Plank blamed the ever growing nuisance – for him, anyway – of competition. He also admitted that maybe the company should have focused on offering more high-fashion apparel – which seems to be all the rage at the moment – instead of relying on its basics which didn’t perform as hoped. Plank also blamed the slew of retail bankruptcies of brick-and-mortar stores that carried Under Armour merchandise. Unlike Nike and Adidas, who have a lot of their own stores, Under Armour does not and the inability to get merchandise onto shelves definitely took a nasty bite out of the company’s earnings, especially since 85% of Under Armour’s revenue comes from North America. So those closures really hurt. Last but not least, major promotions that took place too early in the holiday season put a crimp in Under Armour’s numbers as well. Profit dipped to $105 million, adding 23 cents per share, when last year it pulled down almost $106 million taking in 25 cents per share. Revenue may have been up 12% to $1.31 billion, but estimates were pegged for $1.41 billion. By the way, in case you weren’t aware, Plank was among the group of business leaders who met with Trump earlier in the month and pledged to bring more jobs to the U.S.

Pill-tastic news…


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Trump held a special meeting today in the Oval Office with eight lucky guests hailing from the big pharmaceutical companies and pharmaceutical industry lobbying firms.  Among the eight attendees were representatives from Johnson & Johnson, Merck & Co. and Eli Lilly & Co, which happens to be based out of Vice President Mike Pence’s home state of Indiana.  Trump urged them to move manufacturing stateside and promised to ease regulations for them if they do. Just like with the auto industry, Trump wants to redo trade policies for this industry as well so that foreign countries pony up their fair share of drugs manufactured in the U.S. In true Trump fashion, the President remarked how foreign countries are “freeloading” on the U.S. because they put price limits on what their citizens can be charged for drugs. He also wants to streamline the approval process, boost production and get prices drastically lowered on drugs.  Shares of most of the companies represented at the meeting rallied today. In the meantime, we’re still waiting on Trump’s announcement for his FDA pick. But he promises that it’s someone “fantastic.” Of course it is.

Fast lane to nowhere…


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If you’ve ever thought about purchasing a Harley-Davidson motorcycle, but haven’t quite got around to buying one, now might just be the time. A surplus of 2016 models has got the iconic bike maker placing big discounts on its inventory, hoping to sell them off in order to bring in the new and improved 2017 models. Profit for Harley-Davidson came in at $47.2 million, which was actually 12% higher than last year’s $42.2 million. Too bad it all goes down from there. Sales in the U.S. were down almost 4%, but at least the rest of the world helped offset a bigger loss with a 2.3% increase in international sales. As for 2017, the company is expecting things will stay the same, as in flat. In fact, the company plans on shipping about 20% less than bikes than last year. The motorcycle industry, as a whole, has been experiencing a decline since May. Part of that has to with the fact that Harley’s dedicated fans are getting older and younger riders aren’t cropping up to fill that void. Hence, Harley-Davidson has a plan intended to draw in more potential bikers, or as Harley-Davidson CEO Matt Levatich calls it, “building riders.” With this initiative, he hopes he can attract a new, and highly diverse generation of Hog enthusiasts.

Airbnb Books It For Cuba; Headed Out of Indiana; Walmart’s Beef With Discrimination Bill


Image courtesy of  taesmileland/FreeDigitalPhotos.net

Image courtesy of taesmileland/FreeDigitalPhotos.net

With the normalizing of relations between the United States and Cuba, you can be sure that businesses are on the hunt for the countless opportunities that can be found on the island nation. Netflix made its Cuban debut a few months back, along with a handful of other companies. Now its Airbnb’s turn. The online rental website for wallet-conscious travelers saw a 70% spike in searches for rentals on the island nation following President Obama’s announcement about the easing of restrictions there. The way Airbnb sees it, “We are actually plugging into an existing culture of micro-enterprise in Cuba. The hosts in Cuba have been doing for decades what we just started doing seven years ago.” So far the website has over a thousand rental listings. But the rentals can only be used by U.S travelers and travelers must have one of the required licenses to even travel there. Many feel that Cuba could become one of Latin America’s biggest markets, but some are skeptical that Airbnb is going to be able to take much advantage of that. With 15% of Airbnb’s fee being split between the renter and the owner, it seems likely that Cubans would rather forego Airbnb’s services and keep that extra cash for themselves. Then there’s the issues about the lack and slowness of internet access which just might impede some travel opportunities, not to mention profits, that are found online.

It’s only getting worse…

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Image courtesy of stockimages/FreeDigitalPhotos.net

Salesforce.com CEO Marc Benioff is socking it to Indiana and its very unpopular decision to sign the Religious Freedom Restoration Act. The San Francisco-based global cloud computing company is offering relocation packages to employees who don’t feel comfortable in the Hoosier state as a result of the new law. Several employees have already taken advantage of the relocation offer. “One thing that you’re seeing is that there is a third [political] party emerging in this country, which is the party of CEOs.” In fact, more than 39 CEO’s signed a joint statement protesting the law and while Indiana Gov. Mike Pence said there would be “fixes” put into place that would offer protections for certain sexual orientation and gender identities, many remain unconvinced, and the economy in Indiana could suffer mightily. While Benioff wouldn’t mind totally ditching Indiana, he still has about 2,000 employees which makes that endeavor a little improbable. But he still has plans to significantly scale back operations there. “We want to invest in states where there is equality.” So basically, you can cross Indiana off the list.

Speaking of which…

Image courtesy of iosphere./FreeDigitalPhotos.net

Image courtesy of iosphere./FreeDigitalPhotos.net

Walmart has done something nobody expected it to do. Not a company known to embrace social issues, it helped shoot down a bill that was similar to the Religious Freedom Restoration Act passed in Indiana. Even though the retailer has been known to support many conservative causes, both fiscally and otherwise, this time it took to social media to protest this particular bill. Walmart CEO Doug McMillon wrote: “Every day, in our stores, we see firsthand the benefits diversity and inclusion have on our associates, customers and communities we serve.” To be fair, it would have been sheer fiscal stupidity not to protest the bill. It made perfect business sense. McMillon further added that the bill “…threatens to undermine the spirit of inclusion present through the state of Arkansas and does not reflect the values we proudly uphold.” He then went on to ask Arkansas Gov. Asa Hutchinson to veto the bill and wouldn’t ya’ know it? When the mighty Walmart talks, the Arkansas governor listens. Gov. Hutchinson amended the law.

Will Anyone Care if Indiana’s Economy Tanks?; It’s Go Time for GoDaddy; New Craft Beer Gets Crowned

The consequences of actions…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Indiana’s economy just might tank but…oh well. Ever since its Governor Mike Pence signed the Religious Freedom Restoration Act six days ago, basically giving businesses a “license to discriminate” against gays, lesbians etc…corporate CEO’s, businesses, politicians and celebrities have gotten involved, mostly to voice their anger and disgust with the action. Nine CEO’s wrote an open letter to Gov. Pence over their objections to the bill. Apple CEO Tim Cook called it a “very dangerous … wave of legislation.” Indiana literally ticked off Apple. Is there any state that would want to be on Apple’s bad side? Seriously. Angie’s list had plans for a $40 million expansion in Indianapolis. That’s on hold over this bill, as well. The NCAA is majorly “concerned” and analyzing the situation carefully, wondering what to do ahead of next week’s Final Four. Several mayors have already banned city-funded travel to Indiana and 49 governors nixed unnecessary travel to the state. Hashtag #BoycottIndiana has been making the rounds getting upwards of 200,000 hits. Seeing as how the backlash has only gotten precipitously worse, Gov. Pence said he wants a clarification and a fix. Just so we’re clear, that doesn’t mean he wants to get rid of the bill. Perhaps once the state’s economy is in the toilet, he might reconsider.

Who’s your GoDaddy?

Image courtesy of mistermong/FreeDigitalPhotos.net

Image courtesy of mistermong/FreeDigitalPhotos.net

It’s time to welcome GoDaddy to the ranks of the New York Stock Exchange. The web-hosting, domain name registration company just came out with its IPO this morning to a much larger than expected debut. Under the ticker symbol “GDDY,” GoDaddy offered up 23 million shares at $20 a pop. But then, lo and behold, it opened over 30% higher at $26.15 per share. Not bad for a company that’s not profitable. Yes, I did just write that. GoDaddy took a net loss of $143.4 million in 2014 and also has about $1.5 million in debt. To be fair, however, the company’s revenue went up 23% to $1.39 billion. This is not the first time the eighteen year old company attempted an IPO. Back in 2006, Go Daddy was all set to make its big Wall Street debut, only to then decide otherwise, saying the market was in a bad place. However, there are those who think there were internal factors and management shake-ups that affected GoDaddy’s decision to go public. If you’re wondering who the next pretty face will be to grace the company’s campaigns, don’t bother. After stints with race car driver Danica Patrick and Israeli supermodel Bar Refaeli, the company is looking to revamp its image.


Image courtesy of Photo by Danilo Rizzuti/FreeDigitalPhotos.net

Image courtesy of Photo by Danilo Rizzuti/FreeDigitalPhotos.net

Samuel Adams is out. Yuengling is in. The Brewers Association has crowned Pottsville, Pennsylvania’s Yuengling as this year’s number one craft beer, taking out the Boston Beer Co. who makes Samuel Adams. So how did America’s oldest brewery finally manage to nab top honors? Actually it had nothing to do with anything the beer companies did or didn’t do. Rather, the Brewers Association slightly altered the criteria for what can be considered a legit craft beer. It gets technical so I’ll leave the complicated stuff to a beer-savvy blogger. What I can tell you is that Yuengling was considered a non-traditional beer, because corn is one of the ingredients used to brew the beer, and therefore not eligible for the beer crown all these years. As for overall U.S. brewers, Anheuser-Busch, Miller-Coors and Pabst took the top spots. Yuengling and Boston Beer Co. rounded out the fourth and fifth place spots. Unlike regular beers, craft beers sales are up and have a 19% hold on the beer market. In 2014, $19.6 billion worth of craft beer was sold, up 14% from 2013.