Rate Hike? What Rate Hike?; Chipotle’s Rocky Road to Recovery; McCormick’s Spicy Good Earnings

Easy does it?

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Well, if you’re looking for the Fed to raise rates, don’t hold your breath. Despite the fact that the Fed’s next meeting is planned for April 26th and 27th, experts think a move like that probably wont happen before July. It was initially believed that there would be four rate hikes over the course of the year, after the Fed raised the rates for the first time in nine years back in December. But now it looks like there will be just two.  Federal Reserve Chair Janet Yellen is still promising a gradual pace of rate increases, but even she admits that the economic climate just isn’t quite impressing these days. The Central Bank is paying very close attention to all the annoying economic issues going on in the world, like the global economic slump, the very very low oil prices and a relatively volatile stock market. Of course, it wouldn’t be right not to mention China’s own economic downturn.  Plus the Fed’s not too stoked about the rate of inflation, which has been holding steady at about 1% when its target is closer to a 2% rate. Add to that weak consumer spending and you’ve got a Fed that’s not looking to stir any fiscal trouble. Hence, the Fed has assured the country that it plans to “proceed cautiously” in its rate hike plans, which is awfully considerate, according to some people, anyway.

Burned burrito…

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Free burritos or not, Chiptole’s road to fiscal recovery is looking very far off.  Wedbush Securities analyst Nick Setyan came out with a new report that says he doesn’t expect the fast food chain to recover before 2018 – calling it “the best case-scenario” – and even lowered Chipotle’s price target from $450 – $400. Ouch. Before the food safety crisis, each Chipotle restaurant was pulling down $2.5 million in sales on average. But that’s not expected to happen again for quite some time, especially given the fact that Chipotle’s operating costs are only going to get higher and higher because of its more comprehensive and stringent food safety measures. And even though the company sent out coupons for nine million free burritos, with another 21 million free burrito vouchers en route, Chipotle will still eat a $62 million tab for that, as a burrito typically costs $7.10. But hey, whatever it takes to try and erase the ugliness of E. Coli and norovirus outbreaks, right? Even with all those vouchers being sent out, the company only expects that a quarter of them will actually get redeemed. Naturally, news of the report sent shares south when the stock is already down 37% since August. Shares of Chipotle closed today at 460.10.

Spice spice baby…

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Of all the companies to report earnings lately, this one’s pretty…spicy. Yes. I had to go there. McCormick & Co. just released its first quarter results and considering that the company’s products aren’t items typically used in bulk, the $13 billion company pulled in some very impressive figures. In the process, McCormick & Co. even managed to raise its 2016 outlook, and unlike other major food producers that have been struggling to keep up with a health/organic revolution,  McCormick hasn’t faced quite the same challenges. In fact, its stock is up around 28% in the last twelve months with a little help from some recent acquisitions. The spice-maker was expecting to earn between $3.65 to $3.72 per share. But now it’s looking like it’ll pick up between $3.68 and $3.75 per share for the year. Incidentally, despite China’s economic downturn, the country still managed to give McCormick some boffo growth. Perhaps there’s a correlation between economic stress and and a desire for spicy food? Hmm. Will have to explore that one…In any case, McCormick picked up a profit of $93.4 million on $1.03 billion in revenue and adding 73 cents per share. Analysts only expected 69 cents on $1.03 billion in revenue while the year before the company took in a profit of $70.5 million on $1.01 billion in revenue with 55 cents added per share. And if that’s not enough, McCormick also scored a new 52 week high today of 99.90.

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Google Exec’s Royal Pay Day; Why Chipotle Wouldn’t Serve Lunch Today; Yelping Early on Earnings

Does that include the corporate jet?

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Sundar Pichai may not just yet be a household name – something that strikes me as totally weird – but remember that name. He is, after all, one of the highest paid CEO’s of a publicly traded company, and he just scored a record $199 million Google (GOOG) stock award  – the highest ever…for a Google exec. This not-so-minor tidbit was revealed following a February 3 regulatory filing where Pichai disclosed that he received…wait for it…a whopping 273,328 class C shares of Google. Google, by the way, closed today at 682.74. You do the math. Those shares are set to vest quarterly – as long as Pichai manages to last at Google through 2019. And why wouldn’t he. With his last stock award worth about $250 million, Pichai’s Google stake stands at a staggering $650 million. Although, to be fair, tech stocks did take a hit today, with shares of Google parent company Alphabet falling – if only just by 2%. But I suspect Pichai will still come out on top. So perhaps you might want to check Google’s job board. Diane Greene, who heads Google’s cloud business, snagged $42.8 million, while Google CFO Ruth Porat will be taking home $38.3 million in equity.

Muy bien…

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You, like so very many others, probably didn’t get your Chipotle lunch fix today. And that’s not a bad thing. Stores were closed for the better part of the day as approximately 50,000 Chipotle employees gathered in 400 locations, ranging from movie theaters to conference centers, to discuss the Denver-based company’s food safety problems that have been plaguing sales at its 1,971 eateries. Chipotle CEO Monty Moran’s big plan for today’s gathering was to go over new procedures for food safety. That was probably a really great idea since an E. coli outbreak in October and a norovirus in December caused the company to temporarily shutter 43 locations, not to mention incur some brutal fiscal declines.To be fair, Chipotle’s 30% sales decrease are nothing compared to what happened to all those people who got sick. The fact that a Federal Grand jury issued a subpoena for a criminal investigation only adds insult to fiscal injury. But at least the CDC said that the outbreaks seem to be over. I’ll believe it when I hear that CDC employees themselves start ordering Chipotle’s legendary burritos. But if you don’t need those kind of assurances and are ready to chow down on a late lunch/early dinner of soft flour tacos, then bon appetite! Chipotle re-opened at 3:00 pm today.

Early reviews are in…

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Yelp’s earnings were released today –  a bit too early, mind you –  and brought with it the news that Yelp CFO Rob Krolik, who joined the company in 2011, will be stepping down. He will either stay on board until the company can find a suitable replacement or until December 15. Whichever comes first. Weird, I know. In any case, Yelp posted revenues of $153.7 million, handily beating estimates of $152.3 million, and also gained 11 cent per share even though analysts expected the company to report a loss of 3 cents per share. Shares of the company, incidentally, were down in the afternoon. Go figure. If you have yet to post an opinion/review to Yelp, rest assured that there were still 95 million other people who did it for you, letting you know the all the good, bad and ugly about our country’s countless dining establish, both fine and otherwise. Yelp’s been on a fierce mission to battle the competition out there by diversifying its restaurant bookings, offering event management and even doing payments. That’s in a addition to the company’s plans for expansion beyond the U.S. And Yelp has no time to waste as shares of its stock have been going down since March of 2014, when the company hits its high of $97.25.

 

 

Comcast: Streaming Video is so Last Year; Holy-Moly Guacamole, Chipotle is Losing Dinero; The Ultimate Biz Perks List

Who-lu?

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If online streaming video services are phasing out cable, you’d never know it judging by Comcast’s latest earnings. The company actually picked up 89,000 new subscribers – more than any other quarter in the last eight years. It was a particularly remarkable feat considering that last year at this time, the largest U.S. cable operator in the country only gained 6,000 subscribers. This means that for the year, Comcast only lost 36,000 subscribers. And yeah, that’s really good news. It’s really good because in 2014 Comcast lost over 194,000 subscribers. Time Warner Cable also announced it had picked up new subscribers. But Comcast did so well that it decided to raise it’s dividend by 10% to $1.10 – which was awfully generous of them. The nation’s leading high-speed internet operator managed to give a decent beating to analysts expectations earning $19.25 billion in revenue- an 8.5% increase over last year – instead of the projected $18.76 billion.  Comcast’s profits were up 5.2%, coming in at $2 billion, and adding 81 cents per share – just a teeny tiny penny below predictions. Oh well, maybe next time. Knowing that it’s future is/was on the line, Comcast has been trying to stay relevant in an age where streaming online video is all the rage. The company has been whipping out its fiscal A-game, offering better customer service, set-top box enhancements and smaller, more enticing bundles for current and prospective subscribers. Apparently it’s working.

The plot thickens…

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Just when you thought it was safe to go back in the fiscal Chipotle waters, along comes a subpoena, courtesy of a federal criminal probe stemming from a noro-virus outbreak in sunny California. Chipotle now needs to cough up documents going all the way back to January of 2013 and that’s not all. While Chipotle thought the worst was behind it, following the incredibly brutal E.Coli outbreak in some of its restaurants, the company announced that this year will be muy mal for investors. With huge marketing efforts in the wings, along with Herculean efforts to become the gold standard in food safety, Chipotle should be able to stay afloat. But it wont be pretty. The company’s fourth quarter earnings were pretty dismal with sales down more than a third and a whopping $10 billion shaved off its market cap. Apple and Alphabet  it is not. And with any bad news on Wall Street, particularly where there’s a subpoena involved, shares tumbled almost 3% and closed at 461.92.

Very perk-y…

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Glassdoor has served up yet another list to remind you just how badly you need to find a new place to work. This time, the company is ranking other companies according to how friggin’ awesome their employee perks are. For instance, does your current place of employment offer you “Yay Days”? Didn’t think so. But, if you score a position at REI, you get two of ’em – that’s two paid days off to spend on an outdoor activity. Does your boss currently give you $500 to use towards travel? Didn’t think so again. In which case, you ought to check Airbnb’s job board because that company gives you that much money towards travel every quarter so long as that cash is used on Airbnb accommodations (otherwise, no dice).  Burton, purveyor of fine snowboards and accompanying gear, gives its employees season passes to the local slopes. Then there’s software provider Epic Systems that generously gives its employees a four-week paid sabbatical every five years. If you want to feel even worse about where you work, visit Glassdoor for the rest of the list top ranking companies and the amazing perks they offer.

 

 

Where Have All the PC’s Gone?; Chipotle Ready for Big Return; Lego’s New Policy is Awesome

Click away…

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PC’s did not have a very merry Christmas. Or fiscal quarter for that matter. In fact, this marks the fifth consecutive quarter of disappointing PC sales. For the fourth quarter, those sales tanked by a very un-jolly 8.3%. We’re talking Lenovo, HP and Dell. But it was Acer that did the absolute worst with a 15% decline for all of 2015. Shipments of PC’s, for the first time since 2008, fell under 300 million to a very disappointing 276.2 million, more than a 10% decline since 2014. There’s just too much competition from tablet and smartphones that consumers don’t feel the need the rush to upgrade their machines. However, analysts seem to think that sales will pick up later in the year as Windows 10 gets commercialized. The one bright spot, according to the International Data Corporation, were “detachable” PC’s that seem to be all the rage right now. That segment of the industry posted some impressive growth. But then it gets weird. You see Apple, seen as a premium brand in the United States and Europe, actually saw growth – 3% for the quarter and 6% for the year – selling 20.7 million machines. It’s weird, if only because Lenovo, HP and Dell still sold more computers separately than Apple did. So it’s all a matter of perspective, I suppose.

All wrapped up?

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All is not lost for Chipotle after analysts decided that the chain has the potential to get its mojo back. Apparently, none of those analysts suffered from any food-borne illnesses from eating at Chipotle. That may or may not have had to do with why shares of the company rose the most today in more than 5 months. In fact, despite the fact that Chipotle is still slightly reeling from its relatively recent food safety crisis, the chain has plans to open up more than a couple of hundred new restaurants in the coming year. Execs say that the company is implementing new food safety protocols and believe it will make Chipotle an industry leader when it comes to food safety. Go Chipotle! The restaurant chain took a heady 15% sales hit in the fourth quarter following a multi-state E.Coli outbreak at several of its locations. As a result, the company expects to see negative sales posted until at least 2017.  However, shares today went up as high as $432.30 Bear in mind that the company experienced a major 40% slump from the high it hit back in August to the tune of $757. 77 and lost about $10 billion of its market value. There are currently several lawsuits against the chain over its past food-safety practices. But hey, good news: Chipotle execs say that the CDC is just about done with its own investigation into the food chain. Yay. Just don’t confuse that with the separate federal investigation of Chipotle following a norovirus outbreak in California.

Everything is awesome…

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Chinese artist Ai Weiwei will now get to play with all the Lego his political artwork requires. The fuss all started when Weiwei requested a large bulk order for some artwork. It was intended for an exhibition in Australia featuring 20 portraits of pro-freedom figures – to be done in Lego. But Lego wouldn’t allow him to order the amount of bricks needed for the “art” because, at the time, Lego’s policy stipulated that it did not endorse the use of its plastic bricks for projects that carry a “political agenda.” Never mind that my own father is convinced that The Lego Movie had a major political agenda subtly woven into the script. But we’ll leave it at that. In any case, when Ai Weiwei aired his grievance with the toymaker, supporters in several countries began sending in their own Lego stockpiles to the artist. Weiwei ended up using plastic bricks from a Chinese company that were similar to Legos and considerably cheaper too. Lego decided to change its policy and will officially forego asking details about such projects. However, artists must clearly display that Lego does not support or endorse the theme, message  or politics of the Lego artwork in question. Voila!