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…

Image courtesy of winnond/FreeDigitalPhotos.net

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…

Image courtesy of jscreationzs/FreeDigitalPhotos.net

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.

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McDonald’s Turnaround Plan Needs Salt; Warren Buffet Likes His Sugar; Chevy Volt Wants to Electrify

Would you like to supersize that?

Image courtesy of pakorn/FreeDigitalPhotos.net

Image courtesy of pakorn/FreeDigitalPhotos.net

McDonald’s CEO Steve Easterbrook finally revealed to all who were maybe mildly interested about his big plan is to steer McDonald’s back towards fiscal awesomeness, all in the course of a 23 minute video. The world’s biggest burger chain wants to re-franchise 3,500 of its stores. Because franchising offers “stable and predictable cash flow” from collecting fees, it will supposedly save the company about $300 million a year.  And who doesn’t like saving $300 million. Then, Easterbrook wants to make the company’s corporate structure and bureaucracy less “cumbersome” by dividing the company up into four neat little parts. Well, maybe not little. But certainly neater.  The first part is all about U.S. stores. International markets like, Australia and the U.K make up part number two. The third part is labeled high growth markets  – think China and Russia. Then, all those other countries in the world make up the fourth group.  Of course, no master revival plan would be complete without incorporating a customer-focused approach and the ever-menacing prospect of…accountability. But hey whatever works. And something needs to after the company posted a 2.3% drop in sales and revenue that was way too short of its target. Despite detailing this new plan Mc Donald’s couldn’t get Wall Street excited enough to send shares up, even a little.

Enjoy a Coke with Warren Buffet…

Image courtesy of tiverylucky/FreeDigitalPhotos.net

Image courtesy of tiverylucky/FreeDigitalPhotos.net

In case you couldn’t make it to the the Berkshire Hathaway shareholders meeting this weekend, also known as Woodstock for Capitalists, here are but a few of the pearls from that auspicious event. Wells Fargo, Coke, IBM and AmEx rock, at least according to the Oracle of Omaha. Mr. Buffet clearly knows a thing or two of what he speaks since his company has a market value of a staggering $350 billion. When he discussed Coca Cola and the $16 billion stake his company owns in it, the debate about the adverse health effects of sugar didn’t seem to concern him. He feels that people enjoy Coke and thus, it apparently makes them happy. Unlike Whole Foods, which he said, “I don’t see smiles on the faces of people at Whole Foods.” No doubt Whole Foods was not happy about that comment. He was also asked about his involvement with 3G Capital with whom he is now buying Kraft Foods. People have taken issue with 3G over its practice of buying companies and then laying off many of its employees. Mr. Buffet, however, said, “I don’t know of any company that has a policy that says we’re going to have a lot more people than they need.”  How charming. As for naming a successor, well, he didn’t.

Low-voltage…

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Even though gas prices are pretty low, making gas-guzzling SUV’s that much more appealing, that’s not stopping car companies, like GM, from parading out its latest eco-friendly models. The 2016 Chevy Volt model is making its debut and what is supposed to be so electrifying about it is that it’ll be around $1,500 less than the 2015 model. It’ll also get 30% more mileage from a single charge than the 2015 model. It’s a bit redesigned and there’s even a $7,500 federal income tax credit. But to be fair, it’s not a fully electric vehicle because if you find yourself coasting along  the highway – or any road, for that matter – and the battery juice runs out, the Volt becomes just another regular gas guzzler.  If that doesn’t bother you – and why should it – then consider that Chevy is offering 0% financing for 72 months for qualified buyers. Unqualified buyers should take the bus. California’s even offering a $1,500 rebate which pretty much means that GM doesn’t think there’s going to be a waiting list for this particular automobile. Because let’s face it, a Tesla it’s not.