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| Hello Insiders!! Today's Business newsletter covers: - 🌿 Tilray diversifies; revenue jumps
- 🔍 Deep Dive: Companies' pandemic gains uncertain
- 🚗 GM sales jump despite UAW strike
If you enjoy reading this newsletter, please share it with your friends and colleagues. Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Cannabis company Tilray Brands reported Q1 net revenue of $177M, a 15% YoY increase, while its cannabis division saw net revenue of $70M, representing a 20% YoY growth. The company also reduced its net loss to $55.9M for the quarter, compared to $65.8M in the previous year, as it diversified its portfolio beyond cannabis, particularly in the U.S. craft beer industry. More: - The business boosted its cannabis sales in Canada by 16.5% and increased its market share to 13.4%.
- CEO Irwin Simon emphasized that recent beverage industry mergers and acquisitions will spur growth and broaden the company's influence beyond recreational cannabis, particularly in areas where marijuana use is still prohibited.
- After it purchased eight beer brands from Anheuser-Busch InBev, Tilray rose to the fifth-largest participant in the U.S. craft beer industry.
- From $21M in the same quarter last year, Tilray's beverage alcohol revenue increased 17% to $24M in the first quarter.
- To further expand its presence in the beverage sector, the business also purchased Molson Coors Canada's 100% stake in cannabis-infused beverage producer Truss Beverage.
Q: What potential benefits and challenges might Tilray face as it expands into the beverage sector through acquisitions? Join the conversation here. |     | |
| 2 | | What the numbers say: James Knightley, chief international economist at financial services provider ING, notes that spending on nondurable goods like food, beverages, clothing, footwear, and gasoline has returned mainly to pre-COVID-19 levels, while spending on durable goods such as vehicles, jewelry, furniture, and household equipment remains higher than before the pandemic. Relevance: Retail giants such as Costco, Home Depot, and Best Buy are closely watching as consumers reduce spending on large discretionary items, and analysts are looking to the holiday season for insights into future shopping trends. The shift toward more typical spending patterns observed during the pandemic may result in increased promotional efforts by retailers. More data: Consumer spending on goods surged during the pandemic due to restrictions on experiences like dining out, but now, decreasing savings, restricted credit access, and rising essentials costs are affecting spending power. Tapestry, owner of brands like Coach and Kate Spade, saw a shift in customer preferences during the pandemic, favoring more casual options. Home coffee consumption remains strong despite a return to coffee chains, accounting for over 70% of all coffee consumed. | | | |
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| 3 | | General Motors (GM) reported a remarkable 21.4% uptick in third-quarter U.S. new vehicle sales, surpassing industry forecasts, which had anticipated a 15% to 16% industry-wide increase for the same period. All of GM's brand sales demonstrated year-on-year growth, while Stellantis was an exception, recording a 1.3% decrease in sales, which may not necessarily be linked to the UAW strikes. More: - The United Auto Workers' (UAW) ongoing strike against Detroit-based automakers, which includes GM, had little to no direct impact on GM's third-quarter sales.
- However, GM and other businesses will see problems with supply chains and sales if the UAW strike widens or continues.
- Only 17% of UAW members with expired contracts with GM, Ford, and Stellantis are now participating in the work stoppages.
- With around 1.97 million automobiles sold in the U.S., GM's sales increased by more than 19% in the fourth quarter.
- Additionally, GM observed a 28% rise in electric vehicle sales in the second quarter.
Zoom Out: - Sales growth was also experienced by several automakers in the third quarter, including Toyota (+12.2%), Hyundai (+9%), Kia (+14%), Mazda (+22%), and Honda (+53%).
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| 4 | | Popeyes has climbed to the second position among U.S. chicken chains, overtaking KFC, while Chick-fil-A continues to lead with a significantly expanded market share. According to Barclays, Chick-fil-A's market share increased to 45.5% over the past year, KFC's share declined to 11.3%, and Popeyes' share was reduced to 11.9%. More: - Popeyes' chicken sandwich success propelled it ahead of KFC, leading to increased popularity and menu expansion alongside rapid restaurant openings.
- The success of Chick-fil-A is linked to things like first-rate customer service, a limited menu, and effective drive-thru lanes.
- It took KFC over a year to respond to Popeyes' chicken sandwich threat, putting it behind home market rivals.
- Popeyes views its success as a triumph and plans to grow into the most well-liked and frequented chicken brand in the U.S.
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| 6 | | Clorox, a cleaning giant, was hit by a cyberattack in August, severely disrupting its operations and leading to an anticipated sales drop of 23% to 28% for the quarter ending on Sept. 30, causing an expected loss instead of the initially projected profit of nearly $150M. The attack also forced Clorox to take systems offline, causing product shortages and processing delays. More: - Following the incident, Clorox had to process orders manually but is now switching back to automated order processing to refill shops.
- The company expects the attack's effects to continue but wane during the second quarter of the fiscal year, which started on Oct. 1.
- This circumstance demonstrates Clorox as one of the pioneering examples of abiding by new Securities and Exchange Commission regulations on reporting severe cyberattacks.
- Compared to prior guidance that indicated mid-single-digit percentage growth, Clorox's quarterly organic sales are likely to decline by 21% to 26%. The company anticipates a loss per share of $0.35 to $0.75, while analysts had predicted a profit of $1.18 per share.
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- Superdry has entered into a partnership with India's Reliance conglomerate, selling its South Asian intellectual property, including brand assets in India, Sri Lanka, and Bangladesh.
- Spirit AeroSystems announced the departure of Chief Executive Tom Gentile, who also resigned from the board, with board member Patrick Shanahan stepping in as interim CEO.
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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