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| Here’s your daily business briefing. - 🎯 Target stock soars despite sales dip
- 🚗 Deep Dive: Americans crave drive-thru solitude
- 📬 USPS posts $6.5B loss
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Shriram
p/Shriram | |
| 1 | | Target surpassed Wall Street expectations in its fiscal Q3 earnings and revenue, reporting earnings per share of $2.10, exceeding the expected $1.48. However, total revenue fell to $25.4B from $26.52B in the year-ago period, and comparable sales declined for the second consecutive quarter, dropping nearly 5% YoY. More: - Target's Chief Financial Officer, Michael Fiddelke, emphasized the company's focus on restoring traffic and sales to positive territory.
- Following the news, premarket trading saw a more than 10% increase in the company's shares.
- Due to a decrease in discretionary spending on online purchases, digital sales fell by 6%.
- Target's improved inventory control and cost containment contributed to a 36% increase in net income to $971M during the third quarter.
- With adjusted profits per share ranging from $1.90 to $2.60, the company anticipates a mid-single-digit fall in comparable sales for the Christmas quarter.
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What the numbers say: According to a September study by Revenue Management Solutions, two-thirds of all fast-food purchases are now made through drive-throughs. Drive-through traffic rose by 30% from 2019 to 2022, as reported by foodservice research firm Technomic, while the first half of 2023 witnessed a 47% decline in dining inside fast-food restaurants compared to the same period in 2019. Relevance: The $113B fast-food industry is evolving with changes like redesigned spaces, smaller dining rooms (Popeyes), potential eliminations (Taco Bell), and significant drive-through expansions (Chick-fil-A in Atlanta). Companies are also customizing mobile menus and experimenting with multilingual AI order-taking. More data: McDonald's highlighted a significant digital shift, with 40% of sales coming from digital orders in the drive-through. This drive-through transformation, marked by shorter wait times, improved food quality, and rising prices, extends beyond traditional fast food, as fast-casual chains like Shake Shack and Sweetgreen also embrace this tech-driven trend. | | | |
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| 3 | | The U.S. Postal Service posted a fiscal year-end net loss of $6.5B, as first-class mail volume dropped by 6.1% to the lowest since 1968 at 46 million pieces. Despite a 0.4% decline in revenue to $78.2B, stamp price increases contributed to a $515M revenue boost, while the net loss includes $2.6B in unexpected inflation costs, sparking discontent among postal officials. More: - Initiated in 2021, the Postal Service's 10-year restructuring plan sought to remove $160B in expected losses by 2031, with a 2024 breakeven date.
- Postmaster General Louis DeJoy declared that the USPS will not break even in 2024 despite lower costs and higher package receipts.
- The amount of first-class mail sent has decreased by 53% since 2006, while income has increased by $515M due to increasing stamp costs.
- USPS announced a 2.6% increase in employee benefits and pay costs to $52.8B, with goals to reduce transportation expenses by $1B the following year.
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| 4 | | YouTube will introduce a policy update mandating disclosures on videos featuring realistic AI-generated or synthetic content to avoid viewer confusion with the increasing use of advanced AI tools. Creators must add labels when uploading content that includes convincingly manipulated or synthetic elements, especially for sensitive topics like elections, conflicts, public health crises, or involving public officials. More: - Early in the upcoming year, the disclosure labels will start appearing in video description panels and, more prominently, in the video player for some sensitive content.
- Creators who repeatedly violate the disclosure rules risk sanctions, such as having their video removed or being suspended from YouTube's Partner Program.
- YouTube addresses concerns about non-consensual content by introducing a feature that allows users to request the removal of AI-generated or altered content that imitates an identifiable human.
- YouTube partners that are music partners may also ask for the removal of AI-generated music that sounds like certain artists.
Zoom Out: - TikTok introduced a new label for AI-generated content, requiring users to disclose when AI is used to create or edit content depicting realistic scenes.
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| A message from our sponsor, StartEngine. |  | | Raise up to $5M or $75M on Your OWN Terms Since 2015, StartEngine has helped founders to raise over 1,000 rounds of capital all on terms they set.1 The results? We’re glad you asked… - 1.8 million – The collective size of the StartEngine community…that’s a lot of eyes for your business2
- $24 million – How much one of our top founders raised in a single offering3
- $75 million – At StartEngine, we practice what we preach and we’ve raised over $75M of our own capital to date4
- $750 MILLION – That’s how much our community has collectively raised for founders to date
Ready to take your business to the next level? Apply to Raise 1. Includes funding rounds via Reg. CF and Reg. A+ combined through StartEngine’s funding portal and broker-dealer, StartEngine Capital, LLC and StartEngine Primary, LLC respectively, as well as StartEngine’s own raises.
2. Count determined as number of unique email addresses in StartEngine’s database as of 10-6-2023.
3. This is for informational purposes only and does not constitute investment advice or a recommendation to invest. StartEngine does not endorse, promote, or provide any investment advice on this product or any other investment opportunities. Furthermore, this example does not represent a guarantee of future performance or success.
4. Includes funds raised over multiple offerings and at different terms. | |
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| 6 | | Electric vehicle startup Fisker posted a Q3 net loss of $91M, or $0.27 per share, surpassing the anticipated loss of $0.19 per share. The company's reported revenue for the quarter was $71.8M, falling short of Wall Street's expectation of $109M. More: - Following the report, the company's stock dropped by over 18%, ending the day at $3.34 per share.
- In Q3, the business shipped about 1,100 Ocean electric SUVs, less than Wall Street had anticipated.
- During the third quarter, Fisker and its production partner Magna International manufactured 4,725 Ocean SUVs.
- Of the units manufactured, 1,097 were delivered to customers in Q3, with deliveries further accelerating post-quarter end, including over 1,200 Ocean SUVs delivered in October and "hundreds" more in transit.
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| 7 | | Quick Hits: *This is a sponsored listing. | | | |
Term of the Day Customer relationship management: Customer relationship management (CRM) is a strategy for managing a company's interactions with its customers or potential customers. Question of the Week What perks would convince you to return to the office? Join the conversation |
| Upcoming Events | | NOV
25 | | AI in Financial Services with Saroop Bharwani | | | | | | | NOV
25 | | The Future of Fractional Work with David Berkowitz | | | | | | * This is a sponsored event | | | |
 | 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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